Geothermal Heating Guide: Costs and Benefits

What Is a Geothermal Heat Pump?

A geothermal heat pump, also known as a ground-source heat pump, offers a clean, reliable, and super-efficient supply of heat and air conditioning. Geothermal heat pumps take the naturally occurring, constant temperature of the earth to heat and cool your home. Although slightly varying depending on latitude, the temperature just below the earth's surface remains between 45-75 °F. The relative heat and cooling from the earth can naturally bring the air inside your home to your desired home temperature, which is usually between 68-72 degrees. In the winter, when the ground temperature is warmer than the outside air temperature, the heat pump will move heat from the ground into your home to help you reach that desired temperature. In the summer, when the ground temperature is cooler than the outside air, you can transfer the heat inside your home into the ground, which will act as a "heat sink."

How Does Geothermal Work?

Geothermal systems require drilling or digging holes to install pipes either vertically or horizontally in the ground. Thus, it is necessary to have enough access to space and proper geology (i.e., deep soil vs. bedrock). Ponds can offer solutions to access areas and suitable geology issues. However, they require a significant body of water and may require environmental permits. A heat pump moves water or some other fluid—often a mix of water and glycol—through the underground pipes where it is naturally warmed or cooled. The liquid is the vehicle that absorbs heat either inside your home or underground and transfers it accordingly. In heating your home with warm air, the fluid transfers its retained heat to your home's existing air handling, distribution, and ventilation system. If your home is heated with radiant heat using water running through pipes, it's a direct transfer.

How Deep Do Geothermal Pipes Need to Be?

The temperature beneath the earth´s surface remains constant year-round. Once you get beneath the frost line, if your region has one, the temperature of the earth remains a constant 50 to 60 degrees Fahrenheit depending on where you are. That means that when it´s 100 degrees outside, the temperature is a comfortable 60 degrees only 3 to 4 feet underneath your feet. Similarly, when it´s 0 degrees outside in the middle of winter, comfortably warm 55-degree air is circulating underneath your home.

Is Geothermal a Sustainable Heating Source?

Geothermal heat pumps are considered an exceptionally efficient heating and cooling system for your home. While geothermal heating and cooling systems do need a pump that will move the water through the underground pipes and into your home (like a traditional boiler system), the pump system only use one unit of electricity for every five units of heating or cooling moved from the earth into your home. If you want your system to become completely sustainable, you can look into purchasing a solar-powered pump.

If your electricity is fueled by an energy company using gas or coal, there may still be a carbon impact with its use. Geothermal heat pumps offer 45 percent greater efficiency, however, and electricity is becoming cleaner with renewable energy technologies. So, your carbon footprint from geothermal heat pumps will be significantly lower than with other standard systems.

Does Geothermal Increase the Value of a Home?

A geothermal heating system is likely to increase the value of your home. When passing on geothermal heat pump savings to a new home buyer, they are likely to be more willing to pay a higher upfront cost.

Does Geothermal Produce Electricity?

A common misconception related to geothermal heating and cooling systems is that they are confused with geothermal energy. Geothermal energy plants utilize the hot air from magma, lava, and other volcanic-like forces to produce electricity. In contrast, geothermal heating and cooling units don't produce energy but rather heat and cool your home with the earth's constant underground temperature.

How are Geothermal Pipes Buried?

Depending on your soil type, polyethylene plastic pipes can be buried either vertically or horizontally at a minimum depth of 4 to 6 feet. Another option is to bury pipes in a pond system where the water insulates the coiled pipes. Thus, you can theoretically combine your geothermal heating and cooling system with a landscaping pond that adds beauty to your property.

What Is the Lifespan of Geothermal?

A geothermal heat pump has a lifespan of 20-25 years and 25-50 years for the underground infrastructure. You can also expect minimum maintenance costs.

How Much Does a Geothermal Cost?

Geothermal heat pumps typically have an upfront cost of between $20,000-$80,000 installed. This price includes all the new equipment, professional excavation, and installation of the system. The broad price range incorporates: 

• Variance in excavation costs (hence the importance of surveying your surrounding geology)
• Your home's square footage requiring a system sizable enough to heat the space adequately.
• The type of system installed (horizontal installation is usually less expensive)

How Much Can You Save With Geothermal?

ENERGY STAR certified geothermal heat pumps are 45 percent more efficient at heating and cooling your home than standard systems. Meaning, your utility bill that accounts for heating and cooling your home will be reduced by 45 percent with an ENERGY STAR certified geothermal heat pump.

Heating and cooling usually account for the highest proportion of energy use in your home, so this is the area greatest impacted by energy savings. The U.S. Energy Information Association (EIA) last reported that, on average, 51 percent of a household's energy consumption is for heating and cooling. A 45 percent reduction from greater efficiencies, applied to that 51 percent of your utility bill, will effectively reduce your total utility bill by 28 percent.

In real savings, if your utility bills are $5,000 per year, they will go down to about $3,600, saving about $1,400 per year.

What's The Payback Period of Geothermal?

For a geothermal heat pump with a raw upfront cost of $20,000, a 30% tax credit would bring the initial cost to $14,000. With energy savings of $1,400 a year, the system will pay for itself in 10 years.

The payback is all relative to your home's size, the type of system installed, the kind of system replaced, and your consumption and cost of electricity of fuel. The typical payback is usually around 8-10 years since most of these factors are corresponding. For instance, the bigger your home, the more energy consumption used for heating and cooling, and the larger the system required.