What to Consider Review of Geothermal HVAC Pros and Cons

Geothermal Heating and Cooling – How it Works

Geothermal heating and cooling uses the relatively constant temperature of the earth below the ground to heat and cool. Geothermal systems use 40% to 70% less energy than conventional systems. While conventional furnaces and boilers burn a fuel to generate heat (traditional HVAC systems), geothermal heat pumps (GHP) very efficiently use electricity to transfer heat from the earth into buildings; your home or a commercial building. In fact, the most efficient fuel-burning heater can reach efficiencies around 95%. That sounds great but consider a geothermal heat pump that transfers up to 4 units of heat for every unit of electricity needed to power the system. What this means in comparison is geothermal energy results in over 400% efficiency.

A geothermal heat pump transfers heat stored in the earth (soil, surface water or ground water) into a building during the winter, and transfers it out of the building and back into the ground during the summer. In other words, the ground acts as a heat source in winter and a heat sink in summer. The technology is used for space heating, cooling, and hot water.

PROS of Geothermal

The US Environmental Protection Agency considers geothermal the cleanest and most energy efficient heating and cooling (HVAC) system for any home.

Geothermal heat pumps cost significantly less to operate than traditional HVAC systems; you benefit from lower monthly utility bills. And, geothermal systems have fewer moving parts which tends to lower maintenance costs compared to traditional HVAC systems. In addition, GHPs equipped with a device called a “desuperheater” can heat the water in your home. During the summer heat that is taken from the house is used to heat the household water (hot water supply). In the winter, water heating costs are reduced by about half.

Tax credits are available to home owners that install geothermal systems (until 2016 currently). And, tax credits are dollar for dollar reductions in the amount you owe in taxes – every dollar credited is one dollar less you pay in taxes. Tax credits are far better than tax deductions which only reduce your taxable income. The IRS energy tax credit program is called the“Credit for Residential Energy Efficient Property” and the purpose of the program is to encourage people to build green.

Geothermal Tax Credit Summary:

  • 30% of cost with no upper limit for ENERGY STAR qualified geothermal heat pumps
  • Expires: December 31, 2016
  • Details: Existing homes and new construction qualifies. Both principal residences and second homes qualify. However, rental properties DO NOT qualify for geothermal tax credits.
  • More information on Energy Star and Geothermal Tax Credits
  • Some restrictions may apply and it is recommended that you consult your accountant and/or the specific IRS code for all of the details.

NOTE: All geothermal heat pump components certified by the manufacturer in the “Manufacturer Certification Statement” will be covered by the 30% tax credit according to the IRS (see IRS code for details), as well as the installation costs associated with these components. There may be some add-on components that will not be covered such as an emergency back up system and the ducts. According to certain IRS guidance, these components are not directly related to the efficiency of the covered geothermal heat pump property.

IRS Guidance: Notice 2009-41 Section 3. (1)(e) Qualified geothermal heat pump property expenditures are expenditures for equipment which uses the ground or ground water as a thermal energy source to heat the dwelling unit or as a thermal energy sink to cool the dwelling unit, meets the requirements of the Energy Star program which are in effect at the time that the expenditure for such equipment is actually made (even if under § 25D(e)(8) the expenditure is deemed made at a later time for purposes of determining the taxable year for which a taxpayer may claim the credit), and is installed on or in connection with a qualifying dwelling unit. (SOURCE: Energy Star: What parts of a geothermal heat pump are covered by the tax credit?)

CONS and Disadvantages of Geothermal Systems

The initial capital cost for geothermal systems is higher, often 2x or more higher. The upfront cost is the main disadvantage and it might take anywhere from 2 to 10 years to recover your initial investment through reduced utility expenses. Another possible disadvantage might be the availability of a qualified and experienced contractor in your area. It is typically easy to obtain references for contractors that are experienced with the installation of traditional HVAC systems but you might find it more difficult to obtain references for geothermal contractors.

The installation of the equipment in the ground requires heavy equipment (backhoe for horizontal loops or drilling equipment for well installation). In most cases, there is a cost associated with landscaping. For example, horizontal loops require up to 250-300 feet of trench per ton; a 3,000 sq. ft. home might require a 4-5 ton geothermal heat pump. The loop and trench design is highly dependent on your situation; the size of your yard, accessibility, etc. You may incur the expense of removing a fence or other landscaping. Also, the yard will almost always require landscaping after digging the trenches and/or installing vertical wells. Heavy equipment does tear up a yard.

Most GHP require the system to be “running” to produce hot water. However, newer systems are being designed that will produce hot water without the main system running. Read about ClimateMaster’s “Q-Mode” and the Trilogy 40 (see below) – a new development in technology that allows hot water to be produced without the system running. Also, WaterFurnace’s 7 Series (41 EER) run very efficiently with variable speed compressors. Little energy is used while running the system in a powered-down state that allows for hot water production (not as much of an issue with the latest and greatest GHP systems introduced this year, 2012).


Evaluating Geothermal Heat Pumps

Ground source heat pumps are rated in terms of Coefficient of Performance (COP) for the winter. The higher the COP, the higher the efficiency. Where gas furnaces have COP values in the 0.78 to 0.94 range, ground source heat pumps have COP values in the 3.0 to 5.0 range.

When comparing geothermal heat pumps, first determine the EER; the EER is the ratio of effective cooling (heat removed) to the energy used at maximal load. EER is the standard measure of cooling effectiveness for geothermal heat pumps. One way to compare both the COP and EER is to review the list of Energy Star qualified GHPs. Until recently (July 2012), the highest EER rating currently available was 30; note that many Energy Star qualified heat pumps have EERs as low as 17.

ClimateMaster facilities operate in Oklahoma City, Oklahoma; the GHP units are manufactured in the United States. They offer a complete line of geothremal heating and cooling systems. For example, the TRANQUILITY 30 DIGITAL series units are two stage with a variable speed fan and a variable speed loop circulation pump for added energy savings. They also feature advanced “iGate” controls, a stainless steel drain pan, and coated air coils for durability. The THW series water to water units are higher temperature units for hydronic systems and provide higher water temperatures for improved heating. The TMW models are for normal temperatures. All of the units are backed by a warranty. (visit the products page at climatemaster.com for more info)

ClimateMaster recently announced that their new Trilogy 40 geothermal heat pump (GHP) had been certified by the Air Conditioning, Heating, and Refrigeration Institute (AHRI) to exceed 40 EER under ground loop conditions.Therefore, this makes the Trilogy 40 significantly more efficient for cooling; it is now one of the most efficient commercially available GHP. Also, note that 40 EER is more than twice as efficient as some Energy Star qualified GHPs. The following is from the ClimateMaster website:

The Energy Department’s Oak Ridge National Laboratory has partnered with ClimateMaster — a leading manufacturer of geothermal and water-source heat pumps — to develop an appliance that could provide space conditioning and all domestic hot water needs while consuming at least 50% less energy than conventional minimum efficiency equipment.

The partnership between the Department and ClimateMaster began in 2008 in an effort to develop a more efficient ground-source integrated heat pump. Based on field tests and analysis, the new Trilogy 40 Q-Mode™ could save about 60% of annual energy use and cost for space conditioning and water heating in residential applications compared to new minimum efficiency conventional systems. Also, it’s about 30% more efficient than any other available ground-source heat pump [Editor’s note: The statement that it is “30% more efficient that any other availabe” was true when the statement was published. However, Waterfurance recently released the “Series 7” GHPs (41 EER) which are significantly more efficient than their Series 5.

ClimateMaster Press Release: Oklahoma City, OK March 19, 2012 – ClimateMaster announced an efficiency breakthrough with introduction of the Trilogy™ 40 series, the first geothermal heat pumps ever certified by the Air Conditioning, Heating, and Refrigeration Institute (AHRI) to exceed 40 EER at ground-loop (GLHP) conditions.

The revolutionary new Trilogy™ 40 utilizes variable speed technology to provide an extremely wide range of heating and cooling capacities, with the ability to perfectly match loads to as low as 30% of maximum. In addition, patent-pending Q-Mode™ technology produces year-round domestic hot water on demand, even when space conditioning is not required.

The Trilogy 40 Q-Mode series is the outcome of a five year collaboration between ClimateMaster and Oak Ridge National Laboratory (ORNL), which was sponsored by the U.S. Department of Energy (DOE) Building Technologies Program. Based on field tests and analysis by ORNL, the Trilogy 40 Q-Mode can save 55–65% of annual energy use and cost for space conditioning and water heating in residential applications versus new minimum efficiency (SEER 13) conventional systems and 30–35% versus current state-of-the-art two-stage geothermal heat pumps. (Read the full press release from ClimateMaster here)

WaterFurance offers a wide variety of geothermal units using the latest technologies. They are backed by one of the best standard warranties in the industry according to a few website geothermal forums. (visit the product page at www.waterfurnace.com for more info)

The WaterFurnace 7 Series is a new level of innovation and performance with all new advanced controls mated with variable speed compressor technology. Featuring the highest efficiencies (Over 40 EER and 5.3 COP ISO/AHRI 13256-1 GLHP) available in AHRI, the 7 Series is available in 3 variable speed capacity sizes (3 to 5 ton) with Danfoss Variable Speed Compressors.

Company Description: WaterFurnace Renewable Energy, Inc. specializes in the design, manufacture and distribution of geothermal and water-source systems. It’s the United States subsidiary companies are WaterFurnace International, Inc. (WaterFurnace) and LoopMaster International, Inc. (LoopMaster). In December 2010, it incorporated two Australian subsidiaries: WaterFurnace International Asia Pacific Pty. Ltd. (WaterFurnace Asia Pacific) and Hyper WFI Pty. Ltd. (Hyper WFI). WaterFurnace designs, manufactures and distributes geothermal water source heating and cooling systems for residential, commercial and institutional buildings. LoopMaster installs geothermal loops for residential applications, does commercial conductivity testing and provides design and installation assistance. Hyper WFI designs, develops and builds devices that limit the inrush current, which electric motors draw upon start up. On January 21, 2011, the Company acquired inventory and fixed assets from Binary Engineering Pty. Ltd. (SOURCE: WaterFurance)

Additional Resources

ENERGY STAR Guide to Energy Efficient Cooling and Heating (PDF)

Dept. of Energy Report – Assessment of Hybrid Geothermal Heat Pump Systems

Forbes article: Geothermal Heat Pumps: Waterfurnace verses ClimateMaster

Forbes article: Geothermal Heat Pumps: The Next Generation

Energy Star: COP and EER table for review – List of Energy Star Qualified GHPs

RECOMMENDED READING: The Elephant in the Room, HVAC for High Performance Homes, 2009 RESNET Conference, David Butler – Optimal Building Systems

In new homes, poor HVAC design and installation practice accounts for more energy waste than any other single factor. Unfortunately, when it comes to HVAC, it’s easier to sell high efficiency boxes than high efficiency systems, a distinction invariably lost in a competitive marketplace. As a result, HVAC remains the weakest link in most high performance homes.

As homes have become more efficient, oversized HVAC equipment has emerged as one of the more serious problems in building science. Although there’s general awareness of this issue among industry practitioners, few understand the full extent of the problem or its consequences.

There are numerous reasons why oversizing is a bad idea:

  • Oversized equipment costs more and requires larger electrical circuits
  • Oversized compressors have a shorter life expectancy
  • Excess capacity compromises comfort (larger temperature swings)
  • Excess cooling capacity compromises moisture removal, a big deal in humid areas
  • Larger compressors and blowers produce more noise
  • Excess capacity compromises indoor air quality (less run time = less filtration)
  • Excess cooling capacity increases the potential for structural damage from moisture
  • Oversized equipment is less efficient, thus increases operating costs

Said differently, right-sized HVAC systems cost less up front, last longer, provide better comfort, improve moisture removal, run quieter, provide better filtration, and cost less to operate. (SOURCE: Optimal Building Systems)

Geothermal Heat Pumps Definitions

GHPs are also known by a variety of other names: geoexchange heat pumps, groundcoupled heat pumps, earth-coupled heat pumps, ground-source systems, ground-water source heat pumps, well water heat pumps, solar energy heat pumps, and a few other variations. Some names are used to describe more accurately the specific application but most are the result of marketing efforts and the need to associate (or disassociate) the heat pump systems from other systems.

Geothermal Heat Pumps – Common Abbreviations

  • cfm = airflow, cubic feet/minute
  • EWT = entering water temperature, Fahrenheit
  • gpm = water flow in gallons/minute
  • WPD = water pressure drop, psi and feet of water
  • EAT = entering air temperature, Fahrenheit (dry bulb/wet bulb)
  • HC = air heating capacity, MBtu/h
  • TC = total cooling capacity, MBtu/h
  • SC = sensible cooling capacity, MBtu/h
  • kW = total power unit input, kilowatts
  • HR = total heat of rejection, MBtu/h
  • HE = total heat of extraction, MBtu/h
  • HWC = hot water generator capacity, MBtu/h
  • EER = Energy Efficient Ratio
  • = Btu output/Watt input
  • COP = Coefficient of Performance
  • = Btu output/Btu input
  • LWT = leaving water temperature, °F
  • LAT = leaving air temperature, °F
  • TH = total heating capacity, MBtu/h
  • LC = latent cooling capacity, MBtu/h
  • S/T = sensible to total cooling ratio

Energy and Environment Links

1 Comment on "What to Consider Review of Geothermal HVAC Pros and Cons"

  1. 2012-10: Update – after looking into several HVAC options, the consensus is to first focus on “tightening” the envelope of your home before considering the HVAC systems. For my wife and I, it comes down to “first things first.” And, first on almost every energy conservation check-list is “air infiltration” and insulation.

    We are currently building an addition to an existing 1930s home. Understanding the energy use in the existing home and the addition we are building (or the home/addition you plan to build) is, IMHO, by far the most important aspect of HVAC considerations that come later. A “tight” home requires less energy to heat and cool, which in turn requires a significantly smaller HVAC system. And, what that means is a much longer “pay back” time for whatever HVAC system you select.

    Paying to “save energy” by investing in better windows, doors, and stopping air infiltration (conditioning your attic and crawl-space, for example), gives you the highest ROI (return on your investment). But, investing in “energy efficiency” leaves you with less money in the overall project budget. So, you need to consider this, is it better to invest in a GHP system or first invest in energy efficiency?

    Cutting a big energy bill in half saves you a lot more money than cutting a relative small energy bill in half (basic math). For example, a poorly insulated home may have a $400/month energy bill on average, cut that in half and it saves you $200/month ($2,400/year). But, a “tight” home of the same size (sq. ft.) may have only have a $150/month energy bill; cutting that in half only saves $75/month ($900/year).

    Over the course of 1-year, the difference is $1,500/year and $15,000 over 10-years. My point here is if you have a well insulated home (SIPs, conditioned attic and crawl-space, great windows and doors, etc.), the initial capital cost of geothermal systems (GHP) requires a lot more time to “pay you back” if your total energy use is low.

    Say you have or plan to build a tight, energy efficient home and your monthly utility bill with a traditional HVAC system is projected to be the $150/month example. The GHP cuts that in half to $75/month. If the GHP system costs you $15,000 more to install than it takes over 10-years to “break-even” (I’m assuming the $15,000 in the bank would be worth more 10-years from now; maybe $20,000).

    What I have concluded after a significant amount of research is this; a home that uses significantly less energy because it was built or remodeled to be very energy efficient may not benefit “financially” all that much from a GHP system due to the initial capital cost involved.

    Unless you have a huge McMansion or you are using the GHP to also heat a pool, etc., may I suggest you run the numbers for your project? And, definitely consider the best solution of all, invest in cutting your total energy use by “tightening” up the home and stopping all possible avenues of air infiltration.

    In short, first take a hard look at the energy efficiency of your home or project before considering any of the possible HVAC systems. There are several new HVAC technologies (mini-splits, high efficiency heat-pumps using air – traditional type systems) that are making GHP a hard sell for energy efficient homes of say 5,000 sq. ft. or less.

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