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Geothermal Heating No-Brainer Situations

Posted by Taylor Hendricksen on Jan 16, 2012 in Geothermal Costs | 0 comments

Once a person starts looking into the potential applications of geothermal heating it quickly becomes clear that there are widely varying costs associated with geothermal installation. It is the nature of people to try to reduce everything down to averages or rules of thumb but this is not compatible with ground source heat pump systems. The reality is that there are situations where it makes little economic sense to install geothermal heat pump system and other situations where you would be crazy to not install one. Most situations fall somewhere in the middle and require people to look at the life cost of the system before an informed decision can be made.

Lets think about where it would be a “no-brainer” to install a geothermal heat pump system.

First lets think about the type of fuel that the conventional system would be using. Currently propane is considerably more expensive than natural gas and represents the most commonly used fuel used after natural gas for space heating. So if the conventional system would be using propane thats check point #1 on the no brainer check list.

The second most important factor is the type of ground loop that could be used. The least expensive ground loop is an open loop. If enough ground water is available for the project and other variables permit the use of an open loop system then this would pass check point two on the no brainer check list.

The third thing to look at is the estimated total annual energy use of the home or structure. The larger this energy consumption will be the more effective the GSHP will be at providing an economic advantage. This point is not a pass fail thing but a moving point. A large energy demand makes check point three on the no brainer list.

The fourth thing to consider will be the available incentives for installing the GSHP over the conventional source. The current federal personal tax credit is 30% of the system cost. Most states also have incentives available. Consider that a 30% “discount” on the installed cost of an open loop system could feasibly bring it’s cost right in line with a traditional system without the incentives. If this were the case there would be no such thing as system “payback” as the GSHP system would be the same first cost as the conventional system. The energy and cost savings would be realized from day one.

The fifth thing to look at is the electrical utility cost. Many areas have utility providers offer separate lower rates that are charged on the electricity that is used for heating. If this is the case it will make for even more cost effective operation of the GSHP system.

To summarize:

Check points for no-brainer geothermal heat pump situation…

#1: Fuel type of conventional alternative

#2: Earth loop type

#3: Total expected energy loads

#4: Incentives

#5: Electrical utility rates

If the combined relationship of those components results in making the GSPH systems installation the same cost as the conventional alternative or if it would achieve a payback in less than a few years then in my mind it is a no brainer. The home or structure in these situations represents the ideal application of a GSHP in both new construction and retrofit situations. These situations exist all over the place and the reason more of them are not recognized is based on lack of information.