Ԫ Build By Design :: Geothermal - The Economics of It All

The Economics of It All

When you consider investing in any new heating and cooling system, it is wise to consider the cost over the estimated lifetime of the system. Geothermal systems represent a larger initial investment, and so can be a little intimidating to those who are not as committed to saving money or cutting back on greenhouse gases.

However, as you may read elsewhere on this site, geothermal heating and cooling systems are far less expensive to run in three distinct ways:

  • They cost far less to operate for the same (or superior) level of comfort
  • They have fewer moving parts and require less maintenance over time
  • They have a longer useful life. In fact, you may end up purchasing two furnaces and three air conditioners to last as long and do the same job as one direct-exchange geothermal system.

Operating Costs

So exactly how much will a geothermal system save you? Because each installation is unique and different families—even in identical homes—use energy differently, it is impossible to tell you exactly without carefully reviewing your own energy bills and conducting a thorough energy audit of your home.

However, we can help you understand the difference in the cost to deliver energy to your home by comparing the cost of four different systems using a benchmark of 1 million BTUs. (Most homes use between 2 to 8 million BTUs to heat their home and water each month during the winter in California.)

If you haven't read our "What is Geothermal" section what you need to know is that because geothermal moves energy stored in the ground, rather than creating it through combustion, it operates at about 400% efficiency—meaning it delivers about 4 times as much heating or cooling energy as it consumes. This compares to 95% efficiency of the very best conventional furnaces. How does that work out? Take a look at this chart:

What you can see is that geothermal heating and cooling systems cost less than half as much to deliver the same energy to your home as the next cheapest system available, and less than 1/3 as much as propane-fired systems. And note this: as energy prices rise, this difference will only grow.

How much will you save? With an energy audit of your home we can tell you exactly. Until that is done, however, you can assume with confidence that you will save a great deal. Think about your energy bill in the winter, and divide by two...or three. That is your new bill.

Even if you think your existing furnace still has life left in it, it may be so inefficient that upgrading to a new furnace will pay for itself in just a few years. (Many older furnaces operate at 70% efficiency or less due to design, construction quality, and condition.)

Annual Maintenance

At a minimum, conventional systems should be cleaned thoroughly and have their filters changed annually. The burners, thermocouple, regulator, etc. all need to be checked annually and replaced or repaired periodically. In some cases they will perform at less than optimum efficiency; in others they simply stop working.

An average family spends between $150 to $500 annually to service and clean their furnace.

Oh, and then there's the air conditioner. Because air conditioners have to operate in a harsh environment—outdoors in extreme heat—they exhibit wear and tear quickly. Improper maintenance carries an even bigger penalty on A/C units than furnaces—they quickly become VERY inefficient and costly to operate. Pay for service, or pay more for energy.

A geothermal heating and cooling system, by contrast, is first of all only one unit, rather than two. Second, because it only moves energy that you already own (in the ground on your property) rather than using combustion to create it, it is far less stressed than a conventional unit and has less work to do. It also eliminates the burner, and thus eliminates some of the most fragile and highly stressed parts.

On your new geothermal heating and cooling system you'll have to change the filter annually. Other than that, a regular inspection is probably all that is needed. Your savings on maintenance costs alone could easily amount to hundreds of dollars per year.

Life Cycle

Conventional furnaces typically last 10 to 15 years, after which they are so inefficient (if they are working at all) that they really ought to be replaced. Air conditioning units last less than that, typically 10 years or so before they are so worn that replacement makes economic sense.

Geothermal heating and cooling systems, on the other hand, have a lifespan of 30 years or more because:

  1. They have fewer moving parts to wear out
  2. They operate under far less stress than conventional units
  3. Their energy source (the earth) never loses efficiency

You will very likely buy two conventional furnaces for each geothermal installation, and three air conditioning units. (See the story of one of our early installations: 20 years and still running!)

The Bottom Line

In exchange for a larger investment up front, our DX geothermal heating and cooling systems:

  • Will save you money on your heating and cooling bills every month
  • Will save you repair and maintenance costs every year
  • Will be more reliable and less troublesome to keep running
  • Will make the future cost of fossil fuels irrelevant to you since you won't be using any
  • Will enhance the value of your home
  • Will probably be the last heating and cooling system you buy

Your investment can be financed, and often your monthly energy savings pay for the cost of financing.

So yes, if you can afford to pay your energy bill in the future—and we admit that's no certain thing—you can afford a geothermal heating and cooling system. A free, no-obligation energy audit of your home can help us determine exactly how much you will save.

© Build By Design, 2008