Is Geothermal Heating and Cooling Worth the Cost? Heat Pumps Explained

Summary

This episode explores geothermal heating and cooling systems as an alternative to traditional energy sources for homes. It explains how geothermal systems, using stable ground temperatures, can significantly reduce energy costs and are environmentally friendly with a long lifespan. Despite high upfront installation costs, the systems offer potential savings and are supported by government incentives. Innovations like dual source heat pumps and smart controls further enhance efficiency and accessibility, making geothermal energy an increasingly attractive option for homeowners.

Takeaways

• 🏠 Heating and cooling systems are crucial for homes and account for 31% of total household electricity use in the US.
• 🌡️ Geothermal heating and cooling systems, also known as Ground Source Heat Pumps (GSHP), leverage the stable ground temperature for efficient heating and cooling.
• 💧 Geothermal systems use fluid-filled tubes to exchange heat with the soil and a heat pump to transfer this heat to the building.
• 🔄 The process of heating and cooling with geothermal systems involves a heat transfer principle, similar to how an ice cube melts in warm water.
• 🌐 Geothermal systems can be categorized into open loop and closed loop systems, with closed loops being more common due to lower maintenance.
• 📏 Vertical and horizontal loops are common types of closed loop systems, chosen based on available space and soil conditions.
• 💰 The upfront cost of geothermal systems is high, ranging from $10,000 to $30,000, but they offer significant long-term savings and lower operating costs.
• 🌍 The global market for geothermal heat pumps is growing, with the residential sector contributing nearly half of the market share.
• ♻️ Geothermal systems are environmentally friendly, have a longer lifespan than conventional systems, and require minimal maintenance.
• 📉 Government incentives and policies, such as tax credits and grants, help reduce the payback period for geothermal system investments.
• 🚀 Innovations like dual source heat pumps and smart controls are improving efficiency, reducing costs, and making geothermal systems more accessible.

Q & A

What are the primary energy sources for heating and cooling systems in the US according to the 2021 Annual Energy Outlook from the EIA?

The primary energy sources for heating and cooling systems in the US are electricity, natural gas, and oil. Space heating represents 15% and space cooling accounts for 16% of total household electricity use in the country.

What is the significance of the Northeast region in terms of oil usage for heating?

In the Northeast region of the US, oil is widely used for heating, with 81% of all heating oil being used in this area.

What is geothermal energy and how is it used for heating and cooling homes?

Geothermal energy is the heat that comes from the Earth's interior. It is used for heating and cooling homes through Ground Source Heat Pumps (GSHP), which take advantage of the ground's stable temperature to provide heating and cooling.

Can you explain the basic working principle of a geothermal heating system?

A geothermal heating system works by using fluid-filled tube loops to exchange heat with the soil and a heat pump that removes the heat from that fluid, concentrates it, and transfers it to the building using duct work. The process is reversed in the summer to cool the house.

What are the different types of geothermal systems mentioned in the script?

The script mentions Open Loop Geothermal Systems, Closed Loop Geothermal Systems (which can be further sub-categorized into vertical loops, horizontal loops, slinky coil loops, and pond loops), and Dual Source Heat Pumps.

What are the advantages of using geothermal heat pumps for heating and cooling?

Geothermal heat pumps offer significant savings for heating and cooling, work well in almost all climates, are environmentally friendly, have a longer lifespan than conventional systems, and require low maintenance.

What is the average installation cost for a geothermal heat pump system?

The upfront installation cost for a geothermal heat pump system ranges from $10,000 to $30,000, depending on the system size and type.

How does the efficiency of geothermal heat pumps compare to traditional HVAC systems?

Geothermal heat pumps are more efficient than traditional HVAC systems, with a coefficient of performance (COP) from three to five, meaning they produce three to five units of heat for every one unit of energy used.

What government incentives are available to reduce the cost of installing geothermal systems?

In the US, the Federal Residential Renewable Energy Tax Credit provides a tax credit of 30% of the total installed cost of an Energy Star rated system. Some states also offer grants for homeowners who install geothermal systems.

How do smart controls contribute to the efficiency and cost-effectiveness of geothermal heat pumps?

Smart controls can support the grid by balancing supply and demand and reduce running costs by allowing homeowners to utilize suppliers' dynamic tariffs or time of use rates, running the heat pumps when electricity prices are lowest.

What is the expected growth rate for the geothermal heat pumps market worldwide according to the market size report mentioned in the script?

The geothermal heat pumps market worldwide is expected to grow at a compound annual growth rate of 7.2% from 2020 to 2027.

Outlines

00:00

🏠 Introduction to Geothermal Heating and Cooling Systems

This paragraph introduces the topic of geothermal heating and cooling systems as an alternative to traditional methods like oil, natural gas, or electricity. It explains the basic principle of geothermal systems, which use the stable ground temperature to provide heating and cooling. The heart of a geothermal heat pump is the heat exchanger, compressor, and control system. The fluid used can be groundwater or a suitable refrigerant. The process involves transferring heat from the ground to the building in winter and reversing the process in summer. The different types of geothermal systems, including open loop, closed loop, vertical loops, horizontal loops, and pond loops, are also described.

05:01

💰 Costs and Benefits of Geothermal Heat Pumps

This paragraph discusses the costs and benefits of installing geothermal heat pumps. The upfront installation cost ranges from $10,000 to $30,000, which is higher than traditional HVAC systems. However, geothermal systems are more efficient, with a COP of 3-5, and can save homeowners $600-$1440 per year in heating and cooling costs. The payback period is typically 8-10 years, but geothermal systems have a longer lifespan of 20+ years for the heat pump and 50+ years for the underground infrastructure. To reduce upfront costs, government incentives like tax credits and grants are available. The Federal Residential Renewable Energy Tax Credit provides a 30% tax credit on the installed cost of an Energy Star rated system. Some states also offer grants for homeowners who install geothermal systems. Overall, geothermal heat pumps offer significant savings, environmental benefits, and low maintenance costs.

10:03

🚀 Innovations and Future of Geothermal Heating and Cooling

This paragraph explores innovations that are improving the efficiency and accessibility of geothermal heating and cooling systems. Dual source heat pumps can heat from both the ground and air, achieving higher efficiency than traditional heat pumps. Smart controls allow homeowners to take advantage of dynamic electricity tariffs and reduce running costs. Heat pumps from companies like Kensa can be integrated with smart controls to align heating schedules with periods of low carbon and low cost electricity. With further advancements and policy incentives, geothermal systems are expected to become a more compelling choice for homeowners in the future.

Keywords

💡Geothermal Heating and Cooling

Geothermal heating and cooling refers to a system that utilizes the stable temperature of the earth to provide heating and cooling for buildings. It's a renewable energy source that can be a sustainable alternative to traditional fossil fuels. In the video, geothermal systems are highlighted as an efficient and environmentally friendly option for homeowners looking to power their homes' temperature regulation systems.

💡Ground Source Heat Pumps (GSHP)

Ground Source Heat Pumps, or GSHP, are a type of geothermal system that uses the ground's stable temperature to provide heating and cooling. They consist of fluid-filled tube loops that exchange heat with the soil and a heat pump that transfers this heat to the building. The script explains that GSHP systems are a key component of geothermal heating and cooling, emphasizing their role in energy efficiency and environmental sustainability.

💡Heat Exchanger

A heat exchanger is a device that transfers heat from one fluid to another without mixing the fluids. In the context of geothermal heat pumps, the heat exchanger plays a crucial role by facilitating the transfer of heat from the ground to the building's heating system. The script describes the heat exchanger as a central component of the geothermal heat pump, highlighting its importance in the overall system.

💡Coefficient of Performance (COP)

The Coefficient of Performance, or COP, is a measure of a heat pump's efficiency, indicating the ratio of heat delivered to the energy consumed. A higher COP means the system is more efficient. The script mentions that geothermal heat pumps can achieve a COP of three to five, making them significantly more efficient than traditional heating and cooling systems.

💡Open Loop Geothermal Systems

Open Loop Geothermal Systems are a type of geothermal system that uses groundwater pumped through an open-ended pipe to exchange heat with the heat pump. The water is then returned to the ground at a different point. The script discusses the advantages and disadvantages of open loop systems, noting that while they have lower upfront costs, they may require more maintenance and have environmental considerations.

💡Closed Loop Geothermal Systems

Closed Loop Geothermal Systems, unlike open loops, do not involve the use of groundwater. Instead, they circulate a refrigerant through a closed loop of pipes buried in the ground. The script explains that closed loop systems are more common due to their lower maintenance requirements and longer lifespan, despite their higher upfront costs.

💡Vertical Loops

Vertical loops are a type of closed loop geothermal system where the heat exchanger loops are installed vertically in the ground. The script describes how these systems require drilling and can be installed in a small area, making them suitable for locations with limited space.

💡Horizontal Loops

Horizontal loops are another configuration of closed loop geothermal systems where the pipes are laid out horizontally in the soil. The script mentions that these systems require more space and are typically used in areas with ample land, such as farms or country houses.

💡Pond Loops

Pond loops are a type of closed loop geothermal system where the heat exchanger loops are submerged in a body of water. The script notes that these systems do not require drilling or digging, potentially reducing installation costs, but they depend on the water body being deep enough to avoid surface temperature fluctuations.

💡Dual Source Heat Pumps

Dual Source Heat Pumps are an innovation that combines both ground source and air source heat pump technologies. The script explains that these systems can switch between the two sources to achieve higher efficiency, making them suitable for areas with extreme temperatures where a single source heat pump might not be effective.

💡Smart Controls

Smart Controls are systems that can optimize the operation of geothermal heat pumps based on factors such as electricity prices and carbon emissions. The script discusses how smart controls can help reduce running costs by aligning heating schedules with periods of low cost and low carbon electricity, contributing to the overall efficiency and cost-effectiveness of geothermal systems.

Highlights

Geothermal heating and cooling systems are an alternative to traditional oil, natural gas, or electricity powered systems.

Geothermal systems have been in use since the 1940s, initially for water heating and evolving to include electricity generation and heating and cooling.

Ground Source Heat Pumps (GSHP) leverage the stable ground temperature for heating and cooling purposes.

Geothermal systems consist of fluid-filled tube loops and a heat pump that transfers heat to the building.

The heat pump's core components are a heat exchanger, compressor, and control system.

Geothermal systems can use various fluids, including groundwater or a mix with antifreeze.

Heat always flows from a higher temperature to a lower one, which is key to the operation of geothermal heat pumps.

In winter, geothermal systems absorb heat from the ground and transfer it into the house.

In summer, the process is reversed to cool the house by transferring heat from the house to the ground.

Geothermal systems are categorized into Open Loop and Closed Loop systems based on how they handle the fluid.

Open Loop systems use groundwater and require careful maintenance to prevent damage to the system.

Closed Loop systems are more common and can be further divided into types based on the orientation of the heat exchanger loops.

Vertical loops require drilling into the ground, while horizontal loops need a large area for installation.

Geothermal heat pumps are sized in tons, with each ton corresponding to 12,000 BTUs.

Geothermal systems offer significant savings, environmental benefits, and require low maintenance.

The worldwide market for geothermal heat pumps is growing, with residential use accounting for nearly half of the market.

High upfront installation costs are a significant barrier to the adoption of geothermal systems.

Government incentives and policies can help reduce the payback period and upfront costs of geothermal systems.

Dual source heat pumps and smart controls are innovations that improve efficiency and reduce costs of geothermal systems.

Geothermal heat pumps are expected to become a more compelling choice for homeowners with further advancements and incentives.

Transcripts

- This episode is brought to you by Brilliant.

Click the link in the description below.

When building a house, homeowners have several ways

to power their heating and cooling systems

like oil, natural gas or electricity,

but there's another option that's right below our feet.

You can install geothermal heating and cooling at your home,

but is it worth the cost and how does it hold up?

I'm Matt Ferrell.

Welcome to Undecided.

(upbeat music)

Heating and cooling systems are an essential part

of our homes, but it comes at a cost.

According to the 2021 Annual Energy Outlook from the EIA,

space heating represents 15% of total household electricity

here in the US,

while space cooling accounts for 16% so together,

they share about 31% of the total electricity use

in the country.

But that's going to vary based on the region.

Along with electricity,

the main heating fuels are natural gas and oil.

Now, while oil usage is low across the US,

it's still sadly, widely used here in the Northeast,

where I live.

And we're talking about 81% of all heating oil is used

in this region.

But thankfully, one alternative that's slowly getting steam

is using geothermal energy directly from the ground

to heat and cool your home.

If you're interested in how geothermal energy is used

to produce electricity, I have a video on that topic too.

Geothermal systems have been in place since the 1940s,

initially providing water heating.

But with the technology's evolution,

these systems have been used for different purposes,

such as electricity generation and heating

and cooling systems, also known as Ground Source Heat Pumps,

or GSHP, which take advantage

of the ground's stable temperature

to provide heating and cooling.

Basically a geothermal heating system is made up

of fluid-filled tube loops to exchange heat with the soil

and a heat pump that removes the heat from that fluid,

concentrates it, and then transfers it

to the building using duct work.

That part looks pretty familiar

to any other forced air heating system

that you've probably seen.

The heart of a geothermal heat pump is made up

of a heat exchanger, a compressor, and a control system

that regulates the process.

The fluid that's used can range from groundwater

to a water mixed with antifreeze

or another suitable refrigerant that circulates

throughout the ground loops.

But to understand that heating and cooling process,

it's important to know that heat always flows

from a higher temperature, fluid, or body

to a lower temperature one.

For example, when you put an ice cube into a glass of water,

it melts, right?

That's because the water has a higher temperature

and more heat than the ice cube,

so the heat is transferring into the cube,

which causes the ice to heat up and melt.

So taking that back to the heat pump, during the winter,

the temperature underground is higher than the surface air.

The cool liquid traveling from the house

down inside the loops, absorbs heat from underground,

bringing it back up into the house.

And the heat pump compresses the liquid,

increasing the liquids temperature, which warms the air

and the warmed air is circulated around the house

and exchange with the cooler air.

The cooled liquid from this process is pumped back

into the ground to continue the cycle,

forming a closed loop.

In the summertime, this process is reversed.

The lower temperature refrigerant absorbs heat

from the house, which now has a higher temperature

than the underground, so it's the exact same principle.

The heated liquid transfers heat from the house

into the ground and returns back up

into the house cooled off.

Now geothermal systems can be split up

into several subcategories, the simplest of which are

Open Loop Geothermal Systems.

They use an open-ended pipe to pump up groundwater,

which is much closer in temperature

to the surrounding ground.

The water passes through heat exchanges

within the heat pump, and then back into the ground,

but this time at a distance from the intake point.

This type of system takes a lot of care because you have

to make sure that the intake water doesn't damage

or clog up the pump or heat exchanger.

On top of that, in some locations,

there are environmental regulations that require

that the output water has to be treated

before it's being discharged back into the ground.

Sediment and contaminants from the groundwater can clog

up and wear down the system, which doesn't happen

in a closed loop systems since the refrigerant flows

through the loop without actual contact with groundwater.

All of this makes these systems more expensive to maintain,

have a shorter life span, but they do have a lower,

up-front cost, and excellent efficiency.

Closed loop systems, on the other hand,

are the most common type of geothermal systems

for heating and cooling.

And while not always as efficient as open loop systems,

they make up for some of the downsides.

They can be sub-categorized into four types according

to the orientation of the heat exchanger loops

in the ground.

In vertical loops, as the name implies,

they're vertically oriented, and they require several holes

to be drilled straight into the ground.

The number of holes, their depth, the spacing between them,

and the volume of fluid that's in the tubes depends

on the soil, temperature variations,

and the house's heating and cooling needs.

A great advantage of vertical systems is they

can be installed within a very small area.

Horizontal loops, just as the name implies here too,

are composed of pipes that are placed horizontally

in the soil.

With the tubing being buried about one

to three meters underground,

but the length can be up to 120 meters.

They take up a lot of room.

If the loops are installed too shallow,

they can run too cool in winter months.

Horizontal loop systems are usually installed

in locations with larger amounts of ground available

for digging, such as farms, country houses.

Like I said, you need a lot of space.

There also slinky coil loops, but not that kind of slinky.

These are very similar to the horizontal arrangements,

but they coil the tubing to overlap itself to save space.

So these loops provide the same distance of piping

with less area, however, these systems require more coiling

per kilowatt of capacity.

And finally Pond loops which are submerged systems

that are installed in bodies of water near the house.

These systems don't require drilling or digging,

which can reduce costs,

but the water needs to be deep enough

so that the loops aren't subjected to surface temperatures.

Geothermal heat pumps are sized in tons, one ton corresponds

to 12,000 BTUs and a heat pump with 3.5 kilowatts of power.

On average, you need 16 to 23 BTU's per square foot

per hour as a standard rule of thumb for heat loss.

So in a new American house, which as of 2020,

averages about 2300 square feet,

it require about 36,000 BTUs per hour,

which brings us to a three ton heat pump

at around 11 kilowatts.

Geothermal systems have some advantages

that have raised interest for homeowners around the world.

These systems can provide significant savings

for heating and cooling.

They can work well in almost all climates.

They're environmentally friendly,

last longer than conventional heating and cooling systems,

sometimes dramatically longer,

and require low maintenance.

According to one market sized report,

the geothermal heat pumps market worldwide

was valued at $9.5 billion and is expected

to grow at a compound annual growth rate of 7.2%

from 2020 to 2027.

The residential sector has been a big booster of that

and has accounted for 49.7%

of the geothermal heat pump market in 2019,

with horizontal loop systems being the most common.

But like all technology,

geothermal heat pumps have some drawbacks and challenges

that need to be overcome in order to make these heating

and cooling systems more commonplace.

The high, upfront installation cost

is a major stumbling block,

which ranges from $10,000 to $30,000,

according to EnergySage.

And the larger the system is, the higher the upfront cost.

If you want to get more specific on those prices,

it's hard because it's gonna vary based on where you live

and the type of system you're having installed.

But the ranges in costs for an average open-loop system are

between $9,000 and $15,000 and for closed loop systems,

you'd be looking at between $12,000 and $30,000.

And within closed loop systems,

you have choices between horizontal and vertical loops,

horizontal being between $12,000 and $25,000

and vertical loops being between $15,000 and $30,000.

The low maintenance and lower upfront cost

of a closed loop, horizontal system is why

they're the most common type sold

and these costs are pretty comparable in other areas

of the world from what I've seen.

I found some UK prices that fell pretty much in line

with these.

To put those prices in perspective,

the average installation cost

for a traditional HVAC system here in the US ranges

between $6,800 and $12,000, including the new duct work,

new central air conditioner, and a new gas furnace.

Replacing an HVAC system without new duct work costs

between $4,800 and $9,300 depending on the home size

and equipment used.

Although the upfront cost

of a geothermal system might be higher

than a conventional HVAC system,

ground source heat pumps are much more efficient

than traditional heating and cooling systems.

They can achieve a coefficient of performance or COP

from three to five, which means that for every one unit

of energy that is used by the system to power itself,

it will produce three to five units of heat for the home.

In addition, geothermal heat pumps are certified

by Energy Star at 45% more efficient at heating and cooling

than a traditional system.

In Canada, you might be saving

between $600 and $1,440 per year.

And depending on your current heat source,

here in the US, you can see similar savings.

The typical payback and savings in the system is usually

around eight to 10 years, but keep in mind

that these systems have an average 20 plus year

life expectancy for the heat pump and around 50 years

for the underground infrastructure.

In many case, the closed loop systems can be expected

to last between 50 and a hundred years

with very little maintenance.

To reduce those upfront costs, government policies

and incentives like tax credits and grants have been used

to reduce the payback period.

For example, here in the US,

the Federal Residential Renewable Energy Tax Credit,

which rolls right off the tongue,

provides homeowners a tax credit of 30%

from the total installed cost

of the Energy Star rated system.

So a $20,000 system would cost you $14,000

after the tax credit.

On top of that, some states offer grants for homeowners

who install geothermal systems, like Maryland,

which offers a $3,000 grant,

now you're talking about an $11,000 system.

And the company Dandelion, here in the US,

offers a really simple, upfront process

of getting geothermal installed in your home.

They'll evaluate if your home is a good candidate,

help you take advantage of incentives

and provide a no down payment loan,

so you can start seeing financial savings from day one.

Their service area is really focused

on the Northeast US right now, but will hopefully continue

to expand.

There's a few other innovations that have been helping

to drive efficiency, drive down costs

and make geothermal more accessible,

but before I get to that, I'd like

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So there are a few other innovations that have been helping

to improve efficiency, drive down costs,

and make it more accessible, like dual source heat pumps.

Some areas of the world are too hot or too cold

for a heat pump to regulate a house's temperature.

Dual source heat pumps can heat,

not just from the underground, but also from the air.

They'll switch to whatever source is the most effective

at that moment, achieving a higher efficiency

than a traditional heat pump.

They're about two to 7% more efficient than air source

and about four to 8% more efficient than just ground source.

Smart controls have also been implemented

to offer support for the grid as well

as reduce their running costs.

If properly synchronized, the smart controls of millions

of devices, such as ground source heat pumps

and electric vehicles would allow the grid

to balance supply and demand.

Smart controls also allow homeowners

to utilize suppliers' dynamic tariffs

or time of use rates, simply running

when the electricity prices are the lowest.

Heat pumps from the British company, Kensa for example,

can be integrated with smart controls

to align heating schedules to periods of low carbon

and low cost electricity.

Tariffs, such as Agile Octopus for example,

publish half hourly electricity prices a day ahead,

therefore the smart controls will vary those prices

and synchronize them with the household's usual routine,

providing the homeowner with lower running costs.

Geothermal heat pumps may not be the first pick

for the average homeowner who isn't thinking long-term

for the environmental benefits, but with further refinements

and incentive policies, geothermal systems will continue

to become a more compelling choice for the masses.

What do you think?

Do you want a geothermal system?

I know I do.

Jump in the comments and let me know.

If you like this video, be sure to check out one

of the ones I've linked to right here.

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if you think I've earned it and, as always,

thanks to all of my patrons and to all of you for watching.

I'll see you in the next one.