Day 4 of Geothermal: What Does a Geothermal System Cost?

 The most popular question I am asked in building a green home is “what does it cost?” Everyone makes the immediate assumption that it will always cost more to go green. Our geothermal system has proven this theory wrong.

A geothermal system for the home will cost more upfront than if you bought a separate forced-air gas-fired or oil-fired furnace and central air conditioning system, but not as much as you might think. Out initial outlay is going to NET around $6k more upfront than comparative systems but will cost us less after our tax rebates and the system offers long term savings for us as well.

One of the greatest advantages of our geothermal system is its ability to lower the monthly out-of-pocket expense for the life cycle of our house. The current trend of lowering a home’s operating costs is one that is only going to continue. As the U.S.  looks to build a smart grid over the next ten years and increase our renewable energy supplies, geothermal systems will be a key element in making a home comfortable and efficient.

In our cost analysis we compared three systems covering approximately 4500 sq/ft:

System A:Five-zone hydro air heating (85% efficient) and cooling system (11 EER) using oil boiler and tankless on demand water tanks and dual Environmental Recovery Ventilators (ERVs) COST: $118,750.00

System B:Five zone Viessman hydro air heating (95% efficiency) and cooling system (13 EER) using propane gas boiler and two 85-gallon domestic hot water tanks and dual ERVs COST: $129,200.00 (NOTE: We do not have natural gas in our neighborhood, we had to look at propane, this was an added cost to this system both upfront and in the long run. That said; oil was never an option for us. We did look at radiant heat as well but the cost increase was significant.)

System C:Five zone Geothermal hydro air heating (3.5 COP (this is equivalent to a 99% efficiency rating)) and cooling system (16.9 EER) using ground source heat pump, dual EVRs and a Superheater COST: $135,501.00

If you are looking into this for your home, to get an accurate comparison of the costs, I also suggest you consider the following:

  • Payback, or how long it takes to recover the difference in costs between the two systems using energy savings. Payback for most geothermal heat pump systems runs three to five years. We have no payback time once we get our tax credit.
  • Energy efficiency of the two systems. To get an accurate picture, make sure efficiency claims are substantiated. Your lifestyle and how well your home is insulated affect how economical a system will be. Our geothermal system has a 3.5 COP and 16.9 EER, this is higher than any competitive system on the market, so we are also getting higher efficiency for less money.
  • Total operating savings from heating, cooling and domestic hot water must be combined to get an accurate picture of total energy savings. (See our table.)
  • Energy costs and availability, both present and future. (We didn’t use this for payback because we didn’t need to, but you can safely assume a 4% rise in oil and gas and 2% for electricity.) 
  • Maintenance costs and system reliability. (We have a 2 year parts and labor warranty. And the system maintenance is equivalent to that of any boiler.) 
  • System lifespan – with a 25 year expected lifespan
  • Other uses, in our case we are tapping into the geothermal well to fill our rainwater harvesting tank when it is low. This completely eliminates the need for our irrigation system to use municipal water.

If you look at the three systems outlined in TABLE 1.0 you can see the heating source, the cost per unit for installation. You can also see the listing for the cost of the plumbing system for each since it impacts domestic hot water. TABLE 2.0 then takes what you spend per year on oil or gas and then compares it to the geothermal system for heating, cooling and DHW. The annual cost to run the geothermal system is averaged at nearly $5k per year less than a propane gas system.

geothermal chart in word for blog

As noted, we also have substantial tax rebates. According to the language, the Geothermal System is defined as a system that produces and stores energy to heat buildings, cool buildings or produces hot water. Our system does all of these things so our deductions include 30% federal (which totals all materials, equipment and labor) and 25% state (capped at an assumed max system cost of $7000, so this is a $1750 state rebate), plus our ENERGY STAR rebate on the total cost of our system. This totals $42,900 (approximately) and can be carried to following years on our federal returns if unused.

So in looking at what we paid, the initial upfront cost was $6301 higher, but with our tax rebates it is easily the least expensive system. We also save $5985 estimated per year on costs for fuel and to run the system. We will never have a bill for oil or natural gas. We will have a system that does not fry and dry my homes air, it will be comfortable. We have a system that eliminates the need to use municipal water for our landscaping but backs up our rainwater harvesting system. And finally, our family will eliminate 19.6 tons of carbon dioxide from entering the atmosphere annually.

If you are looking to build new or replace a system, geothermal is an excellent option. You can easily add solar thermal and PV to the system as well, all option we are including in our long term path once we put money back in our savings account.

posted by KDL | follow me on Twitter: newscaster

Day 2 of Geothermal: Frequently Asked Questions

Deciding to go with a geothermal system over the gas fired boiler was an education process. I really had to understand how it worked. I struggled at first with the concept of heating a home from a constant lower temperature and cooling a home by removing hot air as opposed to adding cold air. There were so many new terms and lots of new vernacular for me to grasp, so I started a list of FAQs that helped me understand each of the parts of the system. We’ve included our own photo display to accompany this blog so it helps put it into perspective.

This is part of our effort to lower our home’s operating costs over its lifecycle.


Q: What is a geothermal heat pump?5.22.09 HVAC

A: A geothermal or “ground-source” heat pump is an electrically-powered device that uses the natural heat storage ability of the earth and/or the earth’s groundwater to heat and cool your home.


Q: How does it work?

A: Like any type of heat pump, it simply moves heat energy from one place to another. Your refrigerator works using the same principle.  By using refrigeration, the geothermal heat pump removes heat energy stored in the earth and/or the earth’s groundwater and transfers it to the home.


Q: How is heat transferred between the earth and the home?

A: The earth has the ability to absorb and store heat energy. To use that stored energy, heat is extracted from the earth through a liquid medium (in our case, water) and is pumped to the heat pump heat exchanger. There, the heat is used to heat your home. In summer the process is reversed and indoor heat is extracted from your home and transferred to the earth through the liquid.

Q: You mentioned heating and cooling. Does it do both?

A: One of the things that makes a heat pump so versatile is its ability to be a heating and cooling system in one.  You can change from one mode to another with a simple flick of a switch on your indoor thermostat. Plus, a geothermal heat pump can assist in heating hot water year-round.

Q: Do I need separate ground loops for heating and cooling?

A: No. The same loop works for both.  All that happens when changing from heating to cooling, or vice versa, is that the flow of heat is reversed inside the unit.


Q: What types of loops are available?

A: There are two main types: open and closed.  We’re installing a closed loop system

Q: Does the underground pipe system really work?

A: The buried pipe, or “ground loop”, is the biggest technical advancement in heat pump technology to date.  The idea to bury pipe in the ground to gather heat energy began in the 1940s.  But it’s only been in the last twenty-five years that new heat pump designs and improved pipe materials have been combined to make geothermal heat pumps the most efficient heating and cooling systems available.

Q: What is a closed-loop system?

A: The term “closed-loop” is used to describe a geothermal heat pump system that uses a continuous loop of special buried plastic pipe as a heat exchanger. The pipe is connected to the indoor heat pump to form a sealed, underground loop through which water or an anti-freeze solution – depending on where you live – is circulated. Unlike an open-loop system that consumes water from a well, a closed-loop system continuously circulates its heat transferring solution in pressurized pipe.

Q: Where can this loop be located?

A: That depends on land availability and terrain. Closed-loops are trended horizontally in yards adjacent to the home if the yard is large enough. Or, for smaller yards, the loops can be installed vertically using a drill rig, much like a water well installation. We are installing vertically and expect our well to go as far as 800 feet deep to reach water.

Q: How deep and long will my horizontal trenches be?

A: Trenches are normally four to six feet deep [1/2 – 1.8 meters]. One of the advantages of a horizontal loop system is being able to lay the trenches according to the shape of the land.  As a rule of thumb, 125-300 feet of trench are required per ton of heat pump capacity [11-27 meters per kW of capacity].

Q: How many pipes are in a trench?

A: Anywhere from 1 to 6 pipes pre trench may be used, depending upon the optimal design for the yard. More pipe per trench shortens the total amount of trench required.

Q: What if I don’t have enough room for a horizontal loop?

A: Closed loop systems can also be vertical. Holes are bored to about 150 – 300 feet per ton of heat pump capacity [13 – 27 meters per kW of capacity]. U-shaped loops of pipe are inserted in the holes. The holes are then back-filled with a sealing solution (grouting material).

Q: How long will the loop pipe last?

A: Closed-loop systems should only be installed using the appropriate high-density polyethylene pipe.  Properly installed these pipes will last over 50 years. They are inert to chemicals normally found in soil and have good heat conducting properties. PVC pipe should not be used under any circumstances.

Q: How are the buried pipe sections of the loop joined?

A: The only acceptable method to connect pipe sections is by thermal fusion. Pipe connections are heated and fused together to form a joint stronger than the original pipe. Mechanical joining of underground pipe for an earth loop is never an accepted practice. The use of barbed fittings, clamps and glued joints is certain to result in loop failure due to leaks.

Q: Will an earth loop affect my lawn or landscape?

A: No. Research has proven that loops have no adverse effect on grass, trees or shrubs. Most horizontal loop installations use trenches about 3 feet [1 meter] or less wide. This, of course, will leave temporary bare areas that can be restored with grass seed or sod. Vertical loops require little space and result in minimal lawn damage.

Q: Can I reclaim heat from my septic system disposal field?

A: No. Depending upon your geographic location, an earth loop will reach temperatures below freezing during extreme conditions and may freeze your septic system. Such usage is banned in many areas.

Q: Can I use water from my geothermal well for other applications?

A: It depends. You cannot in most states, including RI, use the same well for heating and for your drinking supply. You can however, divert water externally to fill a rainwater harvesting tank, as we are doing in our home. When the float in our tank gets too low, it will call to the well for a refill. This will allow us to use only our well water and our rainwater supply for irrigation, not municipal water will be used at all.

Q: If the loop falls below freezing, will it hurt my system?

A: No. The antifreeze solution used in loops that operate at low temperatures will keep it from freezing down to about 15F [-9C] fluid temperature. In the U.S. and Canada, three types of antifreeze solution are acceptable: propylene glycol, methyl alcohol, and ethyl alcohol. Some states/provinces may require one type over another.

Q: I have a pond near my home. Can I put a loop in it?

A: Yes, if it’s deep enough and large enough. A minimum of 8 – 10 feet [2.5 0 3 meters] in depth at its lowest level during the year is needed for a pond to be considered. In pond loops, polyethylene pipe must be used. Generally, a minimum of ½ acre [0.2 hectare] pond is required to provide adequate surface area for heat transfer.

Q: Can a geothermal heat pump also heat water for my home?5.22.09 Water Source Heat Pump

A: Yes. Using what’s called a Hot Water Generator (HWG), some types of geothermal heat pumps can save you up to 50% on your water heating bill by pre-heating tank water. We installed the Geothermal Superheater for a mere $400.

Q: Is a geothermal heat pump difficult to install?

A: Most units are easy to install, especially when they are replacing another forced-air system. They can be installed in areas unsuitable for fossil fuel furnaces because there is no combustion, thus, no need to vent exhaust gases.

Q: Do I need to increase the size of my electric service?

A: Geothermal heat pumps don’t use large amounts of resistance heat, so your existing service may be adequate. Generally, a 200-amp service will have enough capacity, and smaller amp services may be large enough in some cases. Your electric utility or contractor can determine your service needs.

Q: How efficient is a geothermal heat pump?

A: Geothermal heat pumps are 3.5 – 5 times as efficient as the most efficient fossil fuel furnace. Instead of burning a combustible fuel to make heat, they simply move heat that already exists. By doing so, they provide 3.5 – 5 units of energy for every unit used to power the heat-pump system.

Q: What about comfort?

A: In winter, a geothermal heat pump system moves warm air (90 – 105F) throughout your home via a standard duct network. Typically, a very even comfort level is found throughout the home. This is because the warm air is moved in slightly higher volumes and, therefore, saturates the home with warmth more evenly. This even helps out hot or cold spots and eliminates the hot air blasts common with fossil fuel furnaces.

In summer, cool, dehumidified air is dispersed through the same duct network.

Q: Can I get a tax credit for installing this system?

A: It depends on where you live. Some states do have tax credits for installing geothermal systems.  There are federal tax credits for 2009 and 2010.

The Cost of PV…Is there a Payback?

We’ve been exploring our renewable energy options, but in order to determine how much renewable energy we need to make, we’ve been working on how much electricity we are going to consume. Since we selected a geothermal hydro-air heating and cooling system, we’ve eliminated our dependence on fossil fuels like oil and natural gas. But we still need electricity, both to power the ground source heat pump that runs that system and for the rest of the electrical needs in our home.


According to the Energy Information Administration, the average US household consumes 920 kWh (kilowatt hours) of electricity per month. Because we are building an energy smart home, our house is expected to consume less electricity than an average house. Using a figure that has been tossed around to me by numerous sources, our basic design of switching to CFLs, ENERGY STAR rated appliances and spray foam insulation will reduce our electric bill by 30% which provides us an average of 644 kWh per month.


We know our electric bill will be substantially higher than the 644 kWh because our geothermal system runs on a heat pump that draws electricity with an expected annual output of 17000 kWh. This is an added 1416 kWh per month. So we’ve set out to see if there is any value in adding a photovoltaic system to our house.


A 5 kW PV system located in the Northeast will produce approximately 6,200 kilowatts of electricity a year. On average this is about 500 kWh hours a month. To achieve adequate exposure and output, a typical residential PV system usually requires about 100 square feet of clear surface area per kilowatt of PV capacity. So for a 5 kW system, you need 500 square feet of south facing exposure, ideally roof space with no trees interrupting your solar gain. We have 350 square feet a south-east facing roof space on a dormer above our garage and another 300 square feet over our master bedroom.


The PV on the garage roof will produce 4970 kWh per year with 18 modules and the south-facing roof will produce 2588 kWh per year with 9 modules. If we install PV on both roofs we get 27 modules producing 6.2 kW or 7558 kWh annually. 


The industry-average cost per installed kilowatt of an Photovoltaic panel (PV) is about $10,000, but federal and state rebates and tax credits that have been increased in 2009 have cut that expense in about half. There is still a plus and minus to this. With the Energy Economic Stabilization Act of 2008, the Federal Government extended the solar Investment Tax Credit for eight years. They also removed the $2,000 cap on the 30% Tax Credit for PV systems ($2,000 cap still applies to hot water and other thermal systems). This amount will come directly off your tax bill, but because it is a tax credit, we still have to put the money out upfront (now) and wait until 2010 for the tax credit. But the tax credit is substantial and since we usually owe on our taxes we will likely feel the entire amount.


But how long will it take to pay off the cost of the PV system? If we install the full 6.2 kW system we are looking at a cost installed costs of labor and materials of approximately $49,000 (no sales tax which is awesome). After a $2000 RI state tax credit and a federal tax credit of $14,700, we’re looking at an all in cost of $32,300 out-of-pocket.

Take the $32,300 and divide that buy how much electricity we are generating which was estimated at 7558 watts annually multiplied by the cost of electricity in RI (per my Jan 2009 bill that kWh rate is approx $.16 per kWh) for a total of $1209.28 savings annually. My payoff period is 26.7 years. OUCH.


Don’t give up yet, a 5 kWh PV system will avoid the release of 73 tons of carbon over a 25 year lifetime that would have occurred if I had purchased that power from your utility. I like that.


I think we’re going to settle somewhere in the middle here; we’re looking at a starter PV system with wiring in place for the addition of future panels. We’re planning under the assumption that though we won’t get more sun, technology will evolve and as it does both the costs of hardware will go down and the energy the system can produce will go up.


What I hope is that the utility companies and the government get more aggressive. Homeowners need help on the front end with theses systems. With housing starts and home values down, homeowners don’t have the cash or equity for these systems upfront. Electric costs will continue to rise and we will continue to emit carbon into our air. Every PV system that gets installed now helps us all in the future.


Posted by KDL | follow me on Twitter : newscaster



An Easy Way to Get Renewable Energy in New England

Not everyone has the ability, whether it is due to costs, home ownership, location, etc. to place solar panel or photovoltaic’s on their roofs or build a wind turbine in their yard, but there are options for you to buy clean renewable energy that can set us on a path for a future filled with energy that is affordable and sustainable. In RI, the path to that future is People’s Power & Light, a nonprofit organization that is leveraging consumer power for affordable heating oil and for clean, renewable energy through their New England GreenStart program.

New England GreenStart is based on renewable energy resources located in New England, such as the 660 kilowatt wind turbines at Portsmouth Abbey, Rhode Island and Hull, Massachusetts, along with hundreds of solar panels on rooftops throughout Rhode Island like those on Scituate High School. When your household becomes a customer, your household electricity usage will be matched to local renewable resources including solar, wind, biomass, and small hydroelectric plants from New England. View a map of their sources.

New England GreenStart costs a little more. For 100% of your electricity consumption, it’s 2.4 cents per kilowatt hour, or about 40 cents per day for the average home on top of your electricity you are buying from National Grid. But before you say no way, hear me out. There are two significant benefits here: the money you pay for New England GreenStart energy goes directly to renewable energy development (the path to a better and more affordable energy future) and it is 100% tax-deductible.

If you are interested, you can join here  — we already switched (it took about six minutes to fill out the application (make sure you have your National Grid account number) so the electricity as our LEED-H home project is being built is all based on renewable energy resources. The average home uses about 500 kWh per month so you’re looking at another $12.00 on your bill, if that’s just too much right now, and I do understand, here’s a list People’s Light and Power provides to save energy at home:

  1. Weather-strip a door or window with one continuous strip for best results.
  2. Turn your thermostat down 2 degrees: Most folks are still quite comfortable in a house that’s two degrees cooler.
  3. Use ventilation fans wisely .Bathroom fans can suck a whole houseful of heated air out into the cold in just a few hours. So make sure you turn it off or install a timer so the fan runs only as long as required.
  4. Set your water heater’s thermostat to 120 degrees: It’s safer and more efficient. Hot water for showers uses almost half of your heating budget a year. Reduce the heat and you reduce the cost.
  5. Install a low flow showerhead: A $15 low flow shower head could save as much as $100 of hot water. Not only do you save heating money, you save water.
  6. Replace old light bulbs with CFL Bulbs: Over 25% of your energy costs are consumed by light bulbs. A compact fluorescent light fixture can cut costs by 75% and they last longer. (And if you call National Grid for an energy audit, you will get free CFL’s. Also, ENERGY STAR has rebates for numerous CFLs so check online before you shop.)
  7. Make your next large appliance purchase an ENERGY STAR Appliance: New products are smarter and more efficient, particularly the ones with the ENERGY STAR label. Televisions, washer, dryers, refrigerators all offer energy dividends under the ENERGY STAR program. In 2009, you can get a $500 federal rebate for a new ENERGY STAR appliance so start shopping.
  8. Use the sleep mode on your computer. Using the sleep feature of your computer can make you a smart conserver and power down your monitor every time you are done.
  9. Turn off the light when you aren’t using them and save.

posted by KDL | follow me on Twitter: newscaster