What is Geothermal Power?

Geothermal power (from the Greek words geo, meaning earth, and therme, meaning heat) is energy generated by heat stored beneath the earth's surface.

Basically, it is a system that uses the earth’s heat to generate electricity to heat and cool your home.

Why Geothermal?

The reasons are clear….

• Clean and environmentally friendly
• Easy on the land
• Inexpensive to run
• Available 24/7, 365 days a year
• Virtually unlimited supply
• Geothermal power is homegrown, reducing our dependence on foreign oil

What are the savings?

Annual heating, cooling and hot water costs and savings estimate for a typical 2500 sq. ft. home in the Minneapolis area with 4 residents:

System Type Heating Cooling Hot Water Annual Cost Geothermal System $1,075 $79 $188 $1,341 Standard Efficiency Air Source Heat Pump $2,508 Estimated annual savings: $1,167*

Based on fuel costs of: $0.08/kwh for Electricity.
* Due to variations in house design, equipment efficiency, fuel costs, and weather,
your actual savings will vary.

What type of system do I use?

There are two basic types of systems:

Horizontal Loop - These loops are common for applications where substantial land is available. Pipes are buried at 5' - 7' depths in trenches ranging from 100' to 300' in length. Typically one pipe or circuit is used for every ton of equipment. Sometimes the circuits are placed side by side, and other times they are spread apart by as much as 10'. The trenches are covered with the soil that was removed during digging, and will settle around the ground loop. These systems are typically a more economical type of ground loop, as the equipment required is common and readily available

Vertical Loop - These loops are common for applications where land is limited. Pipes are buried in drilled holes, with hole depths ranging from 150' to over 400'. Typically one pipe or circuit is used for every ton of equipment. These systems require a minimum of 15' spacing between boreholes, and 20' is recommended. The holes are sometimes filled with a special grout to ensure pollutants do not enter the hole (and water table) and to ensure that there is good contact between the pipe and the earth. These systems are typically more efficient (approx 10%) than horizontal loops due to the more constant temperature of the earth at greater depths.

According to the Energy Information Administration (www.eia.doe.gov), between January 2003 and January 2006, the average price of natural gas rose from a meager $0.83 / Thm to an astounding $1.40 / Thm. Average U.S. Propane prices soared to record highs in 2006 to over $2.60 / gal, and Fuel Oil reached highs of over $2.50 / gal. What does all of this mean? Your heating and water heating bill grew just as quickly as the prices at the pumps, meaning you are paying more and more each month to heat your home. With geothermal technology, we free you from the always fluctuating fuel prices by relying on a more constant source of heat, the earth.

In August of 2005, the President signed an Energy Bill granting homeowners incentives to build green. According to this bill, owners of eligible ground source heat pump systems will receive up to $300 in tax credits for installing a geothermal heat pump. Eligible units must meet the following criteria: 14.1 EER & 3.3 COP for closed loop, 16.2 EER & 3.6 COP for open loop and the system must have a hot water "assist" (Desuperheater or On Demand Technology). Most HydroHeat geothermal heat pumps meet these stringent criteria.

What is the typical payback on a Geothermal heat system?

Although geothermal heat pumps may have a higher cost of installation, payback can be instantaneous when a home equity loan or construction loan is involved. If your existing system needs to be replaced, or if you are building a new home, a geothermal heat pump may offer you instant payback as well.
Below (table 1) is an typical amortization table. It helps calculate the monthly payment you can expect. To borrow $1,000 over 30 years at 5.75% will require approximately a $5.8357 payment per month to the lender. To borrow $8,000 (8 x $1,000) over 30 years at 5.75% will require approximately a $46.70 payment per month to the lender.
For a geothermal heat pump, the savings can exceed the cost of borrowing even when compared to the highest efficiency alternate system. 
See the table below for an example of potential savings:

Table 2. Geothermal Payback w/ Loan High Efficiency Geothermal System Installation Alternate High Efficiency Propane System Installation A Installation Cost: $18,000 $8,000 B Monthly Payment (on equity or construction loan @ $18,000, 30years, 5.75%): - $105.04 per month  - $46.68 per month C Estimated Yearly Cost of Operation: $949.42 per year $2,625.00 per year D Estimated Monthly Cost of Operation (Heating, Water Heating & Cooling): $79.16 per month $218.75 per month E Geothermal Monthly Savings (Heating, Cooling, Water Heating vs. Alternate System): $139.63 per month N/A F Geothermal Income (Savings - loan Payment): $34.59 per month N/A