Our savings with a Geothermal Heat Pump

Two years ago, our A/C and furnace were getting decrepit (15 - 17 years old) and needed to be replaced. Then we had two gas leaks from our furnace, and we had to go without heat for a few days. As we were evaluating our options for replacing the furnace, we found the Geothermal Heat Pump technology.

Geothermal Heat Pumps provide heating, cooling, and free hot water when they are running. The Geo technology uses much less energy overall than other types of HVAC systems, because it transfers the constant temperature from the earth into your house via closed-loop pipes drilled deep into the earth. According to some experts, Geo systems also last longer.

So, mostly due to environmental reasons, we decided to install a Geothermal Heat Pump. We chose a Climate Master unit, which sits in the garage, connected to a blower in our former furnace closet. The pipes had to be installed in our front yard, which was totally devastated from the digging and drilling.

Our installers were supposed to use a Ditch Witch to dig the trench for the connecting pipe, which was only 6 feet down, and connects the well pipes, which are drilled down about 200 feet. Nope! Surprise, a gigantic earthmover showed up to dig the connecting trench. And the driller was quite a sight to see - I wish I had a picture. It looked a lot like an oil rig on our front lawn for a day or two. We were quite the talk of the neighborhood.

Along the way, we had to upgrade our electric system for an additional $1300. Basically they replaced the main panel. Personally I think we got hosed on this one.

Once the pipes were installed in the wells, the installers ran them up the side of our house and into the attic, then finally down to the Climate Master unit in the garage. They also connected the unit to our hot water heater. "Waste" heat, leftover from the HVAC process, produces free hot water.

Geo pipes connecting to Geo unit

How does it work? Well, it keeps the house at 68 degrees F easily during the winter (with a minimum temperature of 0 - 10 degrees outside, but usually more like 30 - 40 degrees). During the summer, it has trouble keeping the house at 78 degrees when outside temperatures run above 100 degrees. The first summer we had a lot of trouble keeping the house cool until we installed some more insulation, and our original installer came in for a check up and discovered - oops - some of the settings were improperly set, which was causing our unit to run inefficiently. So, I'm not sure why it still doesn't keep the house as cool as we'd like during the summer... maybe it's just not sized right.


What did it cost?

• Geothemal unit and installation + backup electric heater - $9500
• Upgrade of electric system - $1300
• Replacement and leveling of lawn that was destroyed - $700
• Tax credit in 2006 - (-$300)


• Total cost: $11,200

According to some estimates, the cost of comparable energy efficient furnace and A/C units would have run about $4 - 5000. Now, keep in mind that many people would not have to incur the costs of the electric upgrade or the landscaping replacement - especially if building a new home. Then again, according to the estimates I got, $9500 was pretty cheap for an installation of a Geo system.


We also invested $250 on an Energy Audit and $565 on cellulose insulation blown into our attic. So our total investment was $11,200 + 250 + 565 - $5000 (for comparable systems) = $7015.


I just ran the analysis today to see whether the investment was worth it. I looked at our natural gas and electric bills from before the switch and compared them to the electric bill after the switch. Here's what I found:

• The Geothermal system saves a good amount of money on heating, at an average of $50 - 60 per month during the heating months. I have to note here that we are also keeping the house at a constant 68 degrees now during the winter (due to our small child and my home office); before we installed the unit we were running our furnace at 64 degrees during the day and 60 at night. So this is not a true apples to apples comparison.


• The Geothermal system seems to cost about the same to run as our old A/C unit did during cooling months.


• On a first year to year comparison, we saved $400 (32%) and 8511 kwh (46%). Note: I had to convert Dekatherms to kWh to make the comparison. For some reason saving 46% of kWh did not translate into 46% of actual dollar savings - I think this is because prices went up between 2005 and 2007.


• The Geo system brought us to a total home energy usage of 9901 kWh, with no therms at all. This reduces our impact to 75% less than the average American's use of 11,000 kWh + 1000 therms = 40,300 kWh converted. Very satisfying!

So what do I think?

• At this rate, it will take us 15 years to make our money back.
• If prices increase rapidly (possible scenario), it will take much less time - maybe 6 to 8 years .
• There are cheaper ways to use less energy, but this way we keep about the same amount of comfort, and I can continue to use my home office, while still reducing our carbon impact (from home energy use) about 46%.
• The Geo system does seem worth it, assuming energy prices continue to rise.
• If you have tight budget constraints, I would recommend spending the money on insulation and weatherizing first, and investigate solar heating as an option.
• Talk to people in your climate to see if it is worth getting a Geothermal Heat Pump system in your weather conditions!!

Update 2009: I believe that the current federal tax credit is much improved over the credit we received when we installed our system - it is now $2000 instead of the measly $300 we got :).