U.S. Geothermal Provides Development Update

BOISE, IDAHO--(Marketwire - Aug. 8, 2012) - U.S. Geothermal Inc. (NYSE MKT:HTM)(NYSE Amex:HTM)(TSX:GTH) a leading renewable energy company focused on the development, production and sale of electricity from geothermal energy, provides this update of construction work for the new 22 net megawatt ("MW"), air cooled power plant at Neal Hot Springs, located in Malheur County, Oregon and the newly completed 8.6 net MW, water cooled power plant at San Emidio Unit I located in Washoe County, Nevada.

Construction work at the Neal Hot Springs power project is approximately 93 percent complete and is scheduled to achieve a commercial operation date ("COD") in the fourth quarter of 2012. To address a specific vibration issue in the turbine gearbox, adjustments to the three generating modules of the power plant are occurring based on similar adjustments that are currently taking place at San Emidio Unit I. The adjustments include replacing a pair of high-speed turbine gearbox shaft bearings with larger ones and adding a "swirl break" behind the turbine wheel. The swirl break is designed to disrupt an unwanted pressure wave identified by the turbine manufacturer. At San Emidio the EPC contractor also discovered a problem with the silencer and has developed a replacement unit that will be installed during the current shutdown. The silencer issue will also be evaluated at Neal Hot Springs.

Drilling for the remaining injection capacity at Neal Hot Springs began on June 12 at well NHS-14 which was drilled to a depth of 1,688 feet. The well encountered modest permeability and is being evaluated as to its injection capacity. Drilling then moved to well NHS-4 which successfully intersected major permeability in reservoir formation at a depth at 5,960 feet. Initial flow test results indicate that NHS-4 is a significant injector. One additional injection well, scheduled to begin next week, is expected to complete the drilling program. To date, approximately 85 percent of the required injection capacity has been drilled.

At San Emidio, Unit I achieved COD May 25 and has been earning revenues since then. The current shutdown began July 27 and is expected to be complete mid August. While the shutdown reduces revenues in July and August, the plant operates at high availability when online. Discussions are currently underway with the EPC contractor for a final settlement of the contractual delay issues and the construction loan. A take out lender has provided an attractive term sheet for long term project finance to replace the existing $30 million construction loan. The parties expect to complete the long-term financing in about 90 days.

Daniel Kunz, Chief Executive Officer of U.S. Geothermal Inc., said, "The progress underway is consistent with our plan to finish the ongoing construction and adjustments at San Emidio and Neal Hot Springs this year to provide the company stable revenue and earnings in 2013. Our focused and very experienced development and operations teams at U.S. Geothermal have now constructed and will be operating three geothermal power projects since completing Raft River in 2008."

Please visit our Website at: http://www.usgeothermal.com.

About U.S. Geothermal Inc.:

U.S. Geothermal Inc. is a leading renewable energy development company that is operating geothermal power projects at Raft River, Idaho and San Emidio, Nevada. The Neal Hot Springs project, which is currently under construction, will be the company's third operating power project. The company holds geothermal energy rights to 69,500 acres comprising six advanced stage geothermal development sites. The San Emidio project is currently undergoing certain mechanical adjustments to the new 8.6 net MW binary cycle power plant.

The information provided in this news release may contain forward-looking statements within the definition of the Safe Harbor provisions of the US Private Securities Litigation Reform Act of 1995. These statements are based on U.S. Geothermal Inc.'s current expectations and beliefs and are subject to a number of risks and uncertainties that can cause actual results to differ materially from those described, including but not limited to, the results from the ongoing injection well drilling at Neal Hot Springs and financing at San Emidio and repairs at both projects . Readers are cautioned to review the risk factors identified by the company in its filings with Canadian and US securities agencies. Forward-looking statements are based on management's expectations, beliefs and opinions on the date the statements are made. U.S. Geothermal Inc. assumes no obligation to update forward-looking statements if management's expectations, beliefs, or opinions, or other factors, should change.