Why Home Geothermal Systems Might Soon Be More Affordable for U.S. Homeowners

Geothermal heating and cooling systems have been successfully implemented for at least 70 years in the United States, but for many homeowners, they are still a “new” option.  And when an energy efficient technology is new or more expensive, regardless of the benefits, it becomes a novelty of sorts for those with an adventurous spirit and plenty of money, leaving the rest of us paying our higher energy bills. (See related post: “10 Myths About Geothermal Heating and Cooling.”)

The US now has a corp of skilled geo-exchange engineers and tradesmen, thanks in part to the stimulus act of 2009, and homeowners now have more access to information about designing an energy-efficient home. Still, even with an impressive 30 percent tax credit implemented at the federal level, U.S. homeowners need to pay the up-front cost and find a trustworthy contractor to install a geothermal HVAC system.

Meanwhile, our neighbors to the north report that nearly 40 percent of heating systems replaced are going geothermal, according the Canadian GeoExchange Organization; and Canada does not have a national incentive program like we do in the U.S.  Wondering why? Perhaps it could be in part because of services such as GeoTility that take on the burden of installing the underground loop or well system (which can serve an entire neighborhood), charging a one-time connection fee and then a predetermined monthly charge, significantly reducing first costs for both new homebuyers and those choosing to upgrade to geothermal heating and cooling.

Geothermal utility services like GeoTility have had limited availability in the U.S., but are now entering the picture for more of us because of new arrangements such as a recent agreement between Bosch ThermoTechnology and Orca Energy (a sister company to Canada-based GeoTility). In its announcement, Bosch said the agreement  “solves one of the most persistent challenges facing the geothermal industry: how to overcome builder and homeowner resistance to the initial capital cost barrier of installing the ground heat exchanger [or well]. “

Most of us would prefer to pay a monthly fee for an item that could be classified as utility infrastructure, such as the earth-coupled portion of a geothermal heating and cooling system.  (Brian Clark Howard and I allude to this in our guide to geothermal HVAC.) After all, geothermal loops provide very real energy that is fundamentally no different than electricity, except that it is already in the form of BTUs, ready for use by the geothermal heat pump for cooling or heating needs. Most of us have become accustomed to using municipality-supplied city water, sewer, and other utilities. Some of us might say, “Let someone else worry about what’s underground, and I’ll just pay the monthly fee.” (See related quiz: What You Don’t Know About Electricity.)

A first-of-its kind survey, which was conducted last fall by the National Association of Home Builders’ research subsidiary, showed that a majority of people who own certified green homes considered energy efficiency important in their decision-making, and are happy with the home’s energy performance after it is built. Within this group of green homebuyers, tax credits and other financial incentives played a relatively insignificant role in the decision to build a green home; but overwhelmingly, the respondents said they enjoyed lower utility bills, and either didn’t spend more up-front on their home or got benefits that outweighed any additional cost.

For new construction, then, the decision on whether or not to go geothermal may be just that straightforward.  For retrofits, it may take some diligence and creativity, but homeowners who want geothermal will be able to get it.

Tell the geothermal industry what you think. Would you like to see geothermal utility services come to a neighborhood near you?  We’re listening. (See related quiz: What You Don’t Know About Home Heating.)

Jay Egg is a geothermal consultant, writer, and the owner of EggGeothermal. He has co-authored two textbooks on geothermal HVAC systems published by McGraw-Hill Professional. He can be reached at jayegg.geo@gmail.com .