Geothermal Situation

A residential geothermal heat pump system is cheaper than I thought.

Oh don't get me wrong, it's still something like 20 grand or so at it's most expensive, from what limited research I'm been able to do, and nobody wants to just tell you a price because it is a case by case thing depending on your home size, location, if you've got the tax liability to claim the superawesome tax credits, etc, and nobody wants to get into trouble by giving misleading information.  I don't want to either, so I'll just tell you I've seen some systems priced at 20 grand but who knows what it would really cost you.

What I should say, I suppose, is that a geothermal heat pump system is comparably cheaper than I thought, because brand new conventional heat pump or furnace systems costs a lot more to install than I thought.  Up to the ten grand and even beyond for larger homes.   The DOE quotes something like a three thousand dollar difference, I suspect it is more like five or ten thousand dollars more expensive than whatever baseline you would otherwise be getting. The thing about geothermal is that is offers considerably operating cost savings over the entire lifetime of the system.

All heat pumps take heat out of the environment around them and put that heat in your house via The Refrigeration Cycle. (It's not magic, it's physics!)  On a cold winter day the temperature underground is still a pretty warm, eh, 50ish, so your heat pump works much less hard if it can take heat from there, rather than from the 30 degree air.  What's worse, when it gets much colder than that outside your heat pump can't grab enough heat to make your house warm, at which point your heating system starts working exactly the same way your electric stove-top does.  If you think taking heat from one place and putting it another is a cool bit of magic, wait till you have to start making it.  If you've ever lived in a house where a manageable electric bill inexplicably tripled during the coldest months, this is partially the reason.   With geothermal, your need to use this extremely inefficient backup method goes way down.*

Back to the money:  it is even quite possible, when building a new home and deciding between a geothermal or regular heat pump, to pay the extra for geothermal, add that extra to the mortgage you're gonna have to take out for the house anyway and thus adding a certain amount extra in payment each year, but realize energy cost savings that exceed the increase in mortgage payments.   So say adding geothermal amounts to $300 more on your mortgage per year, but your energy cost savings from having a geothermal pump are $417 per year.   Earlier today I just ran those numbers for a 1600 square foot house in Cleveland, and in oh-so-specific case you are netting $117 per year, even though you are paying more for the cost of the system in mortgage interest.   Additional things that make this better are the federal tax credit worth a whopping 30 percent of the total geothermal system price, and the fact that geothermal heat pumps and wells last longer than a conventional system.

Of course this is extremely a case-by-case analysis.  Of course that sort of financial benefit doesn't exist for existing homeowners or buyers of a non-custom built home.

But the possibility exists, and some long-term thinking person, somewhere, is benefiting from it.

*My understanding is that this limitation on heat pumps means they aren't used all that widely up north, at least not on old buildings.   Ground temperatures get colder the further north you go, too, but this is less pronounced than air temperature differences.