The heating and cooling systems on our trusty suburban ranch was more than twenty years old when we decided it was time to replace them with new, high efficiency models. So Mary and I began our due diligence on the subject and started comparing available options. When I first learned about geothermal heating and cooling for residential applications, it was both fascinating and a little intimidating. It seemed like a technology that everyone should be using, but since they weren’t, I was skeptical that it could really be as advantageous as it seemed to be on the surface.
Geothermal systems use a condenser in conjunction with the constant temperature of the earth (rather than the more varied temperature of outdoor air) to provide indoor heating and cooling. Pipes are run vertically or horizontally under ground (or sometimes under water) as the site allows, and liquid is pumped through the pipes and attached to an indoor condenser unit. This means there is no need for a noisy external fan as on traditional air conditioners, and the internal pump is virtually silent. Since the system relies on the earth to keep the liquid at a constant temperature (around 55 degrees Fahrenheit in the mid-western U.S.) it uses very little energy to run the system. In fact, geothermal can be three to four times as efficient as the highest efficiency conventional system. The system even produces excess hot water, which can be stored in a reservoir tank (a “desuperheater”) that reduces the hot water utility expenses as well. Also, geothermal systems use far fewer parts, require less maintenance, and last much longer than a traditional system.
So, what’s the catch? Installation costs. We received three bids, all in the same ballpark price-wise: A 95% efficient gas furnace and a 14 SEER high-efficiency air conditioner installed for around $8000, vs. a Geothermal heating and cooling system for around $18,000 installed. (FYI: Our home is a 2200 sq. ft. ranch, requiring a 3-ton system. Because of the load calculations, confirmed by our home energy audit, we required enough outdoor geothermal pipe for a 4-ton system (600 linear feat) to ensure enough capacity on the most extreme days of the year, which increased installation costs accordingly.) The indoor geothermal equipment was about $1000 more than the cost of a conventional high-efficiency system, but the additional cost of installing the outdoor loops required by geothermal, around $9000 in our case, made it much more expensive than a traditional system.
However, there is currently a Federal tax credit available for a full 30% of the installed cost of a Geothermal system. That is a dollar for dollar reduction in taxes (not merely a deduction), and you can roll the credit forward until 2016, so you can be confident you can make use of the complete credit. In our case that brings the cost down to around $12,000 for Geothermal.
Then we factored in the utility savings. We’re keeping track of those numbers here on Sprawlstainable, but for June 2010 our electric bill is nearly 30% lower than last year. June 2010 was hotter than June 2009 (386 cooling degree days vs. 277 cooling degree days), and we were able to keep the house cooler than last year (77 degrees in 2010 vs. 80 degrees in 2009), so a savings of 30% is even more impressive. Check back in and follow the numbers as the year goes on to see what kind of actual savings we get.
We hope to save up to $1000 a year, which would mean that after four more years we will be down to the cost of a conventional system. After that, the system will continue paying us back, and, considering the longer lifetime of the system, it is possible to save more money than it cost to install the system. As the cost of electricity and natural gas rise in the future, the savings will be more significant.
Of course the decision to go with geothermal felt good, because we knew we were significantly lowering our carbon footprint; making our home more sustainable despite the realities of suburban sprawl. But the bottom line is that eventually the system will save us money. I like to think of it as pre-paying utilities. There is a big up-front cost, but at some point, as long as we stay in the house long enough, the system will have saved more than it cost, and will continue to pay back. It is the kind of decision businesses make every day, focusing on the return on investment over time. And now that the system is up and running and keeping us cooler than our old system at a lower cost, the decision feels like the right one.
If you’re interested, I put together some short videos of the installation of the interior geothermal equipment, which was performed by Hoffmann Brothers of St. Louis. We chose them because of their competitive bid, their excellent references and geothermal certifications, and (significantly) their mechanical engineering expertise. Their crew was here for the better part of four days, and worked quickly and efficiently to get the system up and running.
Residential Geothermal Heating and Cooling System Installation
Geothermal Installation Time-Lapse, Hoffmann Brothers, St. Louis, MO