Little known but efficient, another way to heat and cool your home
Summers are famously humid in upstate New York, but life in the Maioli household has become more comfortable since the couple installed a new heating and cooling system – one not yet well known in the US.
“My wife is quite happy because in the summer we can keep it as cold as we want,” says Joe Maioli in Ontario, New York. In 2021, the couple installed a geothermal or ground source heat pump.
The units you see that look like box fans outside homes and businesses are the more common air source heat pumps. They wring energy from the outside air for warmth and absorb excess heat indoors and dissipate it when they cool. Geothermal heat pumps use underground temperatures instead of outside air.
There is now a lot of pressure to get people to consider ground source heat pumps because they use much less electricity than other heating and cooling methods. “Ground-source heat pumps use about 30 percent less electricity on average than air-source heat pumps over the course of the heating season,” said Michael Waite, senior manager in the building program at the American Council for an Energy Efficient Economy.
“Cooling the house for a month might cost $10 in electricity, and this is the most efficient way to do it,” Maioli said. During the coldest month of winter, their highest heating bill was about $70, he said.
To install ground-source systems, contractors bring in heavy equipment and drills to bury a loop of flexible conduit hundreds of feet deep in your yard. Water flowing through the loop takes advantage of the subsurface temperature, a fairly steady 55 F.
Indoors, often in the basement, a unit contains refrigerant – a liquid that can easily absorb a lot of heat. In the summer, the water in the loop dumps heat into the ground. In winter, it extracts heat from the earth with amazing efficiency and moves it indoors.
“We really feel like we’re on the right side of a megatrend,” said Tim Litton, director of marketing communications for WaterFurnace, a geothermal manufacturer in Fort Wayne, Indiana.
With the better-known air source heat pumps, Litton said, outdoor units can freeze in the winter. Then the system has to take heat from inside to thaw them. There is also dirt, animals and debris.
Water furnace systems can be placed in yards as small as 15 feet by 15 feet, he said. But the drilling rigs can’t reach where houses are very close together.
Geothermal is “in high demand right now,” said Mark Schultz, president of Earth River Geothermal in Maryland, and the interest in reducing carbon emissions is a big motivator for customers. “They have electric vehicles in the driveway and solar panels on the roof,” he said of the sites he will be bidding on.
In the Midwest, Litton sees a wide range of buyers. “We pretty much cover the entire political spectrum — whether you’re a progressive environmentalist or a fiscal conservative,” he said. “In these times of division, it’s kind of nice to have something to agree on,” he said.
Soil resource sticker prices are higher than traditional systems. But in a stamp of approval for their efficiency, last year’s Inflation Reduction Act boosts them massively, with a 30% tax cut. So a customer buying a $30,000 system ends up paying $21,000. If someone doesn’t owe enough tax in one year to take advantage of it, they can carry it over to the following year. Nor is there a dollar limit on the credit, unlike air source units, which are capped at $2,000.
Some states offer credits on top of that. In South Carolina, residents get an additional 25% credit, meaning a homeowner there can get a 55% discount off the initial cost. Some utilities also offer incentives. South Carolina customers who own Blue Ridge Electric Co-op as a utility can get up to $1,600 per ton for the system they install. For example, a 5-ton heat pump installed in a 2,000-square-foot home would get $8,000 back from the utility.
People who live in places with cold winters and hot summers benefit the most from the savings. Still, leaders of three companies interviewed cited initial cost as a barrier.
Corey Roberts lives in Long Island, NY, and installed a Dandelion Energy geothermal system last July. He was renovating and needed a new heating and air conditioning. He was also interested in sustainability. He chose Dandelion after comparing costs to a natural gas system.
“I can tell you the house is the coolest it’s ever been and the heating is the most stable we’ve had since we moved here. We are very happy,” said Roberts.
The upfront cost was an eye-watering $63,500, far more than the $27,000 natural gas option. But after the 30% federal tax credit plus a $5,000 tax credit for geothermal plus a rebate from his electric company, it was about $32,000.
“Dandelion was only a $5,000 difference over a conventional system. When you think about how long it takes to recoup the cost of savings, it’s pretty quick,” Roberts said.
The new system has piqued the interest of friends and neighbours.
“We have a lot of people on the street asking us how it works and we say it’s like magic. Water moves around a pipe in the ground and voilà, here we are heating and cooling. It’s great,” he said.
Born out of a Google innovation lab in 2017, Dandelion designs, installs, and maintains its own systems in New York, Connecticut, and Massachusetts. CEO Michael Sachse said the inspiration for the company was finding an affordable way to control the temperature in the home without contributing to climate change.
“There are three main ways individuals can reduce their carbon emissions: change what you drive, how much you fly, and how you heat and cool your home,” Sachse said. “Especially if you’re in a place where the winters are cold, the way you heat your home will have a huge impact.”
Dandelion is currently working on a partnership with Lennar Corp, one of the country’s largest homebuilders, and believes new homes will be built using geothermal energy instead of natural gas in the future. He said Dandelion is currently identifying a community “where we can work on 100 or 200 houses at a time.”
Litton also sees growth for WaterFurnace. Residential geothermal heat pumps currently make up only 1% of the US heating and cooling market. But they are 20% of the European market, due to a long history of higher fossil fuel prices and more incentives.
In addition to cost and yard disruption, there may be delays in permitting, in part because some jurisdictions are not accustomed to geothermal energy.
Another challenge is invisibility.
“You’ve probably driven past several geothermal facilities today and don’t even know it because it’s all underground,” Litton said.
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