INVESTING IN GEOTHERMAL MAKES ECONOMIC SENSE

In making the choice between installing a geothermal system or a standard heating and cooling system, if your decision is based on the lowest cash outlay up front, read no further. However, if your choice is to purchase an insurance policy that insulates you from rising fuel costs, you will elect to go geothermal, the added benefit being the elimination of on-site emissions of carbon monoxide, the silent killer, and carbon dioxide (CO2), a major contributing factor to global warming. The key economic distinction between installing a standard system and a geothermal system is this: your geothermal system is an asset that generates a positive cash flow for years to come. In contrast, purchasing a standard system is not unlike purchasing a car — it's a money pit. You buy the system, pay for the fuel to run it no matter what the cost of fuel, pay for maintenance and check-ups and eventually replace the system.

Geothermal heat pumps generate their own primary fuel (stored, compressed and re-distributed solar energy) much greater in value than fossil fuels because the supply is endless. The cost to operate a geothermal system is up to 400% less than its output. For every kilowatt you spend, you will realize between 3-5 kilowatts, which is equal to 300-500% efficiency. You incur no costs for annual inspections to determine if your system is burning correctly or leaking deadly gases. Maintenance is typically limited to changing the air filter.

The geothermal heat pump component of your system is projected to last for 20-30 years, and the geothermal loop field buried in your yard has a projected life span of 200 years. Investing in the loop field might be likened to purchasing your own refinery. Consider this scenario: We recently retrofitted a 6,000 square foot home. The client's annual heating and cooling bill of $3,500.00 was reduced to $760.00, generating positive cash flow of $2,740.00. Investing this savings of $225.00 monthly with a 10% return over a period of 30 years nets you $512,848.00 – money that you otherwise burned up purchasing fossil fuels. If you're questioning whether you can afford a geothermal system, you cannot afford not to.

In the event that you decide to sell your home, you can rest assured that you will more than recoup your investment. The ICF Consulting Group in Fairfax, Virginia conducted a study of market values for energy efficient homes and concluded "home value increases by about $20.00 for every $1.00 reduction in annual utility bills". Given our 6,000 square foot home as an example, it stands to reason that a buyer will be far more attracted to the property with annual heating and cooling bills of $760.00, all other factors being equal. The geothermal heating and cooling system is guarded for the duration of ownership against fossil fuel inflation or supply shortages.

In closing, know this: the people who turn their backs on geothermal as a result of up-front cost fail to understand the economics. If you do your homework, you will understand that you are installing a utility capable of generating energy equal in value to the market value of otherwise purchased fossil fuel.
 

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