Environmental Engineering Reference
In-Depth Information
Dollar Costs of Utilizing Geothermal Energy
Geothermal heat pump technology is widely available commercially today, with some producers
claiming savings of 30 to 70 percent over conventional heating options, and 20 to 50 percent
over other cooling systems (ClimateMaster 2011; Excel Energy Solutions 2011; Smithfield
Construction 2011). This technology is competitive with other conventional heating and cooling
systems for residential, commercial and industrial buildings. Geothermal heating and cooling
systems are much more efficient than competing fuel technologies when all losses in the fuel
cycle, including waste heat at power plants during generation of electricity, are accounted for.
High-efficiency geothermal heat pump systems are on average 48 percent more efficient than
the best gas furnaces and more than 75 percent more efficient than oil furnaces. The best geo-
thermal heat pump systems even outperform the best gas technology, natural gas heat pumps,
by an average of 36 percent in the heating mode and 43 percent in the cooling mode (L'Ecuyer,
Zoi, and Hoffman 1993).
In regions with temperature extremes, such as the northern United States in winter and the
southern United States in summer, geothermal heat pumps are the most energy-efficient and
environmentally clean heating and cooling system available. Far more efficient than electric
heating and cooling, these systems can move as much as three to five times the energy they use.
The U.S. Department of Energy found that geothermal heat pumps can save a typical home hun-
dreds of dollars in energy costs each year, with the system typically paying for itself in eight to
twelve years. Tax credits and other incentives can reduce the payback period to five years or less
(Hughes 2008).
In 2008 more than 600,000 ground-source heat pumps supplied climate control in U.S. homes
and other buildings, with new installations occurring at a rate of about 60,000 per year. While
this is significant, it is still only a small fraction of the U.S. heating and cooling market. Several
barriers to greater penetration into the market remain. Despite their long-term savings, geothermal
heat pumps have higher up-front costs than conventional alternatives. Installing them in existing
homes and businesses can be difficult because it involves digging up areas around a building's
structure. Finally, many heating and cooling installers are not familiar with the technology (Hughes
2008).
Geothermal heat pumps are highly reliable, require little maintenance, and are built to last for
decades. They add considerably to the value of homes. Many financial institutions also now allow
home buyers to qualify for larger mortgages if they purchase a house that utilizes a geothermal
heat pump system (GeoExchange 2011). Recent policy developments offer strong incentives
for homeowners to install these systems. The Emergency Economic Stabilization Act of 2008
included an eight-year extension (through 2016) of the 30 percent investment tax credit, with no
upper limit, to all home installations of EnergyStar certified geothermal heat pumps (UCS 2009).
Under the American Recovery and Reinvestment Act of 2009, $400 million of new funding
was allocated to DOE's Geothermal Technologies Program. Of this, $90 million is expected to
go toward up to ten demonstration projects to prove the feasibility of EGS technology. Another
$50 million will fund up to twenty demonstration projects for other new technologies, including
coproduction with oil and gas and low-temperature geothermal. The remaining funds will go
toward improving exploration technologies, expanding deployment of geothermal heat pumps,
and other uses. These investments will very likely produce great net benefits for consumers in
the future (Jennejohn 2009, 19).
Electrical generation from geothermal power plants is one of the few renewable energy tech-
nologies that—like fossil fuels—can supply continuous baseload electrical power twenty-four
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