Geothermal heating and cooling is becoming very popular in new construction as well as retrofitting existing homes. I have yet to find a person who does not like the concept of this type of technology. Although, the ongoing debate is whether or not the payback makes sense. Ive talked to HVAC professionals and builders who are on either side of the argument. Unfortunately, we live in an industry that does not like change. Once we are familiar with a product, we tend to stick with it, without taking the time to think about whether or not there is a better alternative. The bottom line is building or retrofitting a home is expensive and we need to look at each component from all angles.
As mentioned above, builders tend to stick with products they are comfortable with. I can’t blame them. Building a home the right way is a complicated process and its hard to expect the builder to be an expert in every product and procedure. You can however, expect the builder to be utilizing experts in each area of the construction process. When I say experts I don’t just mean the installer. The energy performance of a home is something you will be stuck with on an ongoing basis. You really want to have a 3rd party energy consultant help you navigate the waters of this always evolving industry. A good consultant can help you look at your individual situation and determine a range of options. Here at GreenEdge we consult with many builders at the design phase, so they can give their customers the best options that fit their goals. We also work with homeowners to determine a prioritized list of improvements based on real numbers, not just opinions.
So, who wins the debate on geothermal verses conventional heating and cooling? Well, it all depends on the situation. In most cases a geothermal system will be more expensive to initially install, but the ongoing cost should be lower. This is the common thought process by most people. The reality is that is it not that simple. Here are some real life examples of how we helped some of our customers choose between a conventional HVAC system and geothermal.
Long term house on a farm:
We recently had a client who owns a vineyard. The owners of the vineyard have home, that is 30+ years old, that is in the midst of going through many upgrades. This home is located on the businesses property. It had baseboard electric heat and no AC. As you can imagine the bills were extremely high in the winter. In some months the hit $900+. That is really high! Natural gas was already ran to the home, so they were definitely looking at replacing it with a forced air furnace, but were also considering geothermal. Since the home was built with electric baseboard heat, there was no duct work, so in either situation duct work would need to be added. We brought in two HVAC companies, that could do an install of both technologies. In the end the bid came in very close in price between the two technologies. Of course, the geothermal currently has a 30% rebate from the government, which helped bring the cost closer to the conventional route.
In the end the homeowner decided to go with the geothermal system. Two reasons were the driving force behind the decision. First, duct work had to be added, which increased the cost of both options. Had there been duct work already, it may have been a much tougher decision. Second, the home is located on the property of the family business. This means the home will be in the family for future generations, which means geothermal gives a much better long term payback. We were able to show the client this payback and savings throughout the years of use.
Propane vs natural gas:
We were called out to audit a home of a client who was paying really high utility bills. The home was built only 5 years ago. They were considering adding insulation in the attic, but figured they would get an energy audit prior to spending thousands of dollars. Smart homeowners! That decision will end up saving them thousands of dollars. When we perform an energy audit, we model the entire home into the advanced software program called REMrate. This program allows us to analyze each component of the home from an energy usage standpoint.
This home had a forced air system fueled by propane. Propane in this area is very expensive in comparison to natural gas. Once this was determined we knew right away where their money was going. Regardless of that fact, we performed the entire audit to make sure there weren’t any other areas of concern. In the end the homeowner did not need to add insulation. The problem was the cost of the propane. Unfortunately, running natural gas to the home was nearly impossible given the location and if it was possible would have been extremely expensive. Geothermal was a great option for this situation. Our modeling software gave us an estimate of up to $1800 per year of savings. That is pretty significant! The client planned to be in this home a long time and the payback was worth it.
When we first moved our business to West Michigan, we decided to purchase a rundown duplex in downtown Grand Rapids. We planned on renovating and then selling the property. It had a forced air system that was on its last leg. We also decided to add air conditioning. The duct work was in good shape. In this case we decided to go with a 95% efficient forced air system verses geothermal.
Three factors when into this decision. First, we did not plan on holding the property for a long term investment, which meant we would not be there to see the pay off in the long run on a geothermal system. Second, the lot is very small, which meant that more than likely the system needed vertical wells which cost more than horizontal. Third, we were just swapping out an existing forced air furnace, which made the install very easy. In this case we just couldn’t justify a geothermal system.
These examples show that every situation is different and a lot of questions need to be asked before a decision is made. Whether you go with a conventional system or something like geothermal, thousands of dollars are going to be spent. Make sure you hire a 3rd party energy consultant to help you decide which scenario is the right play. In the end, the cost of the audit will be nothing compared to the savings.
GreenEdge offers consulting services for homeowners and builders. Our HERS Index Rating is a great way to learn about the energy usage of your existing home or the potential energy usage of a home that you are building. Make sure you know what you are getting yourself into.