Geothermal energy will save money over time

Posted: 11/8/2007

If you can handle a hefty initial expense in exchange for long-term savings, it might be worth taking a deeper look at geothermal heating and cooling systems, which the Environmental Protection Agency has called one of the "most efficient and comfortable heating and cooling technologies currently available."

Most of us have experienced the underlying concept of geothermal heat simply by stepping into a cave. The earth maintains a year-round temperature of 50 to 70 degrees. A geothermal heating system uses a water/antifreeze solution, circulating through systems of buried polyethylene pipe, to transfer that energy throughout the home.

Most homeowners install vertical closed-loop systems, which reach depths of 150-300 feet. Horizontal systems are less expensive but don't transfer as much heat, says Mike Dempsey, owner of American Heating & Air Conditioning in Cincinnati.

How it works

In the winter, the liquid in the pipes absorbs the heat and carries it to coils in a heat exchanger. The heated air is distributed through the home via traditional ductwork. In the summer, the flow reverses, carrying hot air down and transferring cool air up to a condenser, compressor and evaporator where the air is chilled and dehumidified. Most systems also provide hot water for the home.

This transfer of heat is powered by an electric heat pump and generates four to five kilowatts of heat for every kilowatt of electricity used, according to ClimateMaster, a manufacturer of geothermal units.

A hefty investment

Drilling is the most expensive installation charge, and often the most stressful for homeowners.

"You've just got to accept that it's going to be a mess for a while," says Nancy Craig, who had a geothermal system installed for her Cincinnati home in August.

Both homeowners and installers stress that geothermal is a long-term investment.

"The drawback is that there is a large initial expense, but in my case it was worth it," says James B. Helmer Jr. In January, Helmer and his wife, Deborah, installed 20 vertical loops to support five geothermal systems in their home.

"The main reason you do something like this is, over time, it will pay for itself," Helmer says.

The (eventual) payoff

Geothermal systems start at about $20,000, versus $7,000-$10,000 for a high-efficiency natural-gas furnace and air conditioning system, says Dempsey, who installs both types.

The payback comes monthly. A comparison from ClimateMaster estimates the annual heating cost for a home using a basic geothermal system is $347, compared with $1,768 for a 91 percent-efficient gas furnace.

The EPA estimates it takes three to five years for the average homeowner's monthly savings to make up for the additional cost of a geothermal system. It took Helmer about 10 years to recoup the cost of his previous system, installed in 1995. It was expected to take seven to eight years.

Although there are incentives for geothermal energy, Helmer says the tax savings don't compare with the incentives offered by the federal government when he installed solar panels on a previous home in the late 1970s.

"We'll maybe save $300 in taxes" on this system, Helmer says. "That's not the reason to do it."

A new method in development by the Department of Energy's Building Technologies program could drop the price of geothermal systems by placing the geothermal loops in the home's foundation and eliminating the need for drilling.

"Geothermal is much more affordable if you can incorporate it into new construction rather than retrofitting," says Ed Pollock, residential team leader with the Building Technologies program.

Integrating a geothermal system into the home's construction also allows homeowners to finance it as part of their mortgage, Pollock says.

AP-NY-10-29-07 0938EDT