U.S. President Barack Obama this year set a goal of using clean energy to generate 80 percent of the country's electricity by 2035.
"By investing in geothermal technologies, we are also investing in our nation's energy future and creating opportunities for energy innovation in the United States," said Energy Secretary Steven Chu.
"The United States remains a global leader in geothermal energy development, and we can leverage our experience to develop more energy here at home while increasing our competitiveness in the global clean energy economy."
The U.S. Geological Survey estimates that geothermal resources could add 30 gigawatts of renewable energy to the national energy supply.
The funding targets exploration technologies that could locate geothermal energy resources.
"By targeting funding to research and develop these innovative technologies, the department aims to reduce the upfront cost of geothermal energy systems, expand their use, and enable the United States to tap the huge potential of this renewable energy resource," the energy department said.