An Unsung Hero: The Underutilized Approach to Heating and Cooling Your Home

by Michael Nguyen
Geothermal Heat Pumps

Not as widely recognized in the U.S. is an innovative means to heat and cool residences.

“During summer, we enjoy the liberty to set any temperature we want,” often ranging between 69 to 70 F, remarked Joe Maioli from Ontario, New York. In 2021, he and his spouse installed a ground source heat pump, often termed as geothermal heat pump.

In contrast to the more common air-source heat pumps that resemble box fans and extract energy from the surrounding air to heat or cool the indoor environment, geothermal heat pumps leverage the stable underground temperatures.

Efforts are intensifying to promote ground-source heat pumps due to their impressive energy efficiency. “On average, ground-source heat pumps utilize 30 percent less electricity compared to air-source counterparts throughout the heating season,” Michael Waite, a senior manager at the American Council for an Energy-Efficient Economy, highlighted.

“Air conditioning for a month amounts to around $10 in electricity bills, making it the most cost-effective method,” Maioli expressed. Their highest heating bill during peak winter reached about $70.

Installing ground-source systems requires deep drilling in your yard to place a loop of flexible pipes several hundred feet underground. This loop circulates water, which exploits the stable 55 F underground temperature.

On the inside, usually in the basement, a unit contains refrigerant — a fluid that readily absorbs significant heat. The loop water discards heat into the ground during summers and extracts it from the earth in winters, effectively transferring it indoors.

Tim Litton, Director of Marketing Communications at WaterFurnace, a geothermal manufacturer in Fort Wayne, Indiana, optimistically shared, “We’re strongly aligned with a growing megatrend.”

In comparison to air-source heat pumps, which can frost over in winter and require indoor heat to defrost, geothermal systems do not suffer from exposure to dirt, animals, and debris. However, installation might be tricky in tightly packed residential areas.

Presently, the demand for geothermal technology is booming, primarily due to a growing interest in reducing carbon emissions, according to Mark Schultz, president of Earth River Geothermal in Maryland. “The majority of our potential clients already have electric vehicles and solar panels installed,” Schultz noted.

Litton sees diverse buyers across the political spectrum for their product in the Midwest. “It’s quite heartening in these divisive times to have a subject of agreement,” he stated.

The upfront costs for ground-source systems are higher than traditional ones. However, with a 30% tax credit under last year’s Inflation Reduction Act, a customer buying a $30,000 system would pay just $21,000. Unused credits can be carried over to subsequent years, and there is no cap on the credit amount.

Several states provide additional credits, with South Carolina residents eligible for another 25% discount, reducing the initial cost by 55%. Some utility companies also offer incentives.

The most significant savings are seen by residents in regions with extreme seasonal temperature fluctuations. However, initial investment remains a challenge for many potential buyers.

After comparing the costs with a natural gas system, Long Island resident Corey Roberts installed a geothermal system by Dandelion Energy last July. The savings from tax credits and rebates balanced out the initially daunting $63,500 cost, making it only slightly more expensive than the $27,000 natural gas option.

Roberts’ new system has sparked curiosity among friends and neighbors. “People often ask us how it operates and we liken it to magic,” he said.

Founded in 2017, Dandelion Energy operates in New York, Connecticut, and Massachusetts and aims to provide a cost-effective solution to home temperature control without exacerbating climate change.

The company is currently exploring a partnership with Lennar Corp, one of the largest home builders in the country. It believes that new homes will be built with geothermal instead of natural gas in the future.

Despite their potential, residential geothermal heat pumps currently make up just 1% of the U.S. heating and cooling market. However, they’re 20% of the European market, owing to longer-standing high fossil fuel prices and greater incentives.

The challenges facing geothermal include not just costs and yard disruption but also permitting delays, primarily due to unfamiliarity with the technology. As Litton points out, another hurdle is invisibility, as these systems are entirely underground.

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Frequently Asked Questions (FAQs) about Geothermal Heat Pumps

How do geothermal heat pumps work for home heating and cooling?

Geothermal heat pumps, or ground-source heat pumps, use the relatively stable temperature of the earth below ground as a heat source in winter and a heat sink in summer. Contractors install a loop of flexible piping deep in the yard. The loop circulates water, which either absorbs or discards heat into the ground depending on the season. Inside the house, a unit contains a refrigerant that absorbs or releases a lot of heat, thereby heating or cooling the house with impressive efficiency.

What are the benefits of geothermal heat pumps?

Geothermal heat pumps are highly energy-efficient, using on average 30% less electricity than air-source heat pumps. This translates to significant cost savings over time. Furthermore, they’re environmentally friendly as they reduce reliance on fossil fuels for heating and cooling.

What are the challenges and drawbacks of installing a geothermal heat pump?

The upfront costs of installing a geothermal heat pump are higher than traditional systems, although this can be offset by tax credits and other incentives. The installation process can also be disruptive, requiring drilling in your yard. Additionally, permitting delays can occur as some jurisdictions are not familiar with geothermal technology.

Are there any financial incentives for installing a geothermal heat pump?

Yes, the Inflation Reduction Act offers a 30% tax credit on the cost of installing a geothermal heat pump. If a homeowner cannot take full advantage of the credit in one year, it can be carried over to the next year. In addition, some states and utilities offer additional credits and incentives.

Are geothermal heat pumps popular outside the U.S.?

Yes, they are more popular in Europe where they make up 20% of the heating and cooling market, due to longer-standing high fossil fuel prices and more incentives.

More about Geothermal Heat Pumps

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Melinda P July 14, 2023 - 6:39 am

Good to see more ppl going green! We need more innovations like this. The planet cant wait…

Paul N July 14, 2023 - 11:27 am

geothermal is definitely the future. We need to get off fossil fuels, they’re ruining the environment. Kudos to all the companies pushing this tech!

Gary H July 14, 2023 - 1:53 pm

I’m curious, how long does it actually take to recover the installation cost? Would be nice if there was a specific example.

Sarah B July 14, 2023 - 5:29 pm

Interesting article, but the installation process seems a bit too disruptive for my liking… And the initial cost is way too high. But maybe with those tax credits, it might be feasible.

Rachel L July 14, 2023 - 9:21 pm

Why aren’t we using more of these!?! Seems like a no-brainer, especially if it helps fight climate change.

Jeff M July 14, 2023 - 10:24 pm

Wow, didnt know that geothermal pumps could save so much energy! Might be worth looking into for my next home upgrade!

Tony G July 15, 2023 - 5:04 am

i have a friend who has one of these geothermal pumps. Swears by it. Says its the best investment he’s made for his house.


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