Recent Activity About Blog Press Releases Calendar Products Feeds Contact
 

Geothermal Heat Pumps: The Electric Car of the HVAC Industry

By Jordann Kaye
September 14, 2011   |   27 Comments

Do you like this blog post?

Email   Bookmark Bookmark   Print   Share
 

The information and views expressed in this blog post are solely those of the author and not necessarily those of RenewableEnergyWorld.com or the companies that advertise on this Web site and other publications. This blog was posted directly by the author and was not reviewed for accuracy, spelling or grammar.

27 Reader Comments
Comment
1 of 27
September 14, 2011
That is an excellent question? I could not agree more. I just did some research on geothermal heat pump manufacturers like GeoFinity and other companies like TACO (hydronics) and they are all going full force into making geothermal a do-able technology application. I love this application and am grateful that I was introduced to it years ago, kuddos to you and to people like Jay Egg who wrote the greatest book on it, "Geothermal HVAC, Green Heating and Cooling". I am hopeful that the powers that be will not try to crush this technology like they did the EV.
Comment
2 of 27
September 14, 2011
The systems are generally overpriced because there are not enough installers and well drillers, and contractors through ignorance and self interest install systems that are too large. I installed a ground source heat pump (GSHP) 10 years ago. Boreholes for the vertical loop field were $1000 each then; today they are $2500 each in the Minneapolis-St. Paul area. I figure we need 75% to 100% more well drillers to get the price down to about $1500, where it should be. The Canadian Office of Energy Efficiency has a webpage on GSHP's, and recommends sizing them to be 60%-70% of maximum heating load. I think they are correct. When I installed my system, the manufacturer recommended a 5 ton, 54,000 btu/hr system. The general contractor recommended a 4 ton, 45,000 btu/hr system. Now that I have had the system for 10 years and studied it, I could have had the 3 ton, 32,800 btu/hr system. My current system of 45,000 btu/hr gives me about 90 degrees of heating capacity. Only once in 10 years have I needed auxiliary heat (a 17,000 btu/hr electric resistance strip in the duct work). My recommendations for politicians in the norther tier of states are: 1) Get more well-drillers trained and licensed 2) Get more heating contractors trained so there is more competition. 3) Set up a loan program using a PACE mechanism to fund the loop field. Even with more reasonable prices, the loop field is always going to be a major expense, and often the reason a homeowner does not install the system.
Comment
3 of 27
September 15, 2011
A bit more on costs. I talked to a woman recently who installed a 3 ton system for $22,000. The heat pump probably cost her contractor about $5000. The loop field would have cost her about $7500, which is overpriced due to the shortage of installers. That is about $12,500. There is not much more in the line of equipment, maybe another $1000. The contractor would have had to bring in an electrician, but installing a forced air ground source heat pump after you have taken the loop field into account is not much different than installing a forced air furnace. I am not sure what the mark-up should be, but it probably did not take the contractor more than a day, maybe 2 to install the heat pump. That's $8000 for two days work. There needs to be a bit more competition in the field. Great products, and I get all of my electricity from our local "WindSource" program.
Comment
4 of 27
September 15, 2011
A friend runs a small out of the way motel and installed his own geo-heat/cooling system. He did go way beyond the recommended size but he has his own backhoe and access to wholesale materials. The ground temp below 6ft was a constant 52'f, a passive solar collector connected to the piping produced a static 214'f resource during the winter which does average 25'f. Beyond the cost of the heat pump and not considering his own labor the system cost 4000 $+/-. It has remover a $160.00 monthly heat bill during the winter and cut his summer cooling bill for the whole operation by 85%. It is now below $40. Payoff 2 years.
No image available
Comment
5 of 27
Anonymous
September 15, 2011
Puting in geothermal is the same as living in a cave except that its an active system requireing equipment that wares out in 15 to 25 tears. In alot of cases, by just installing a basement will do the same thing except it lasts much longer and is totally passive. Also in "What happenen to the electric car?" I thought that the reason the cars were recalled is because there was no maintanance or parts support system to deal with them. Why else would an auto company stop production if they could have made a ton of money?
Comment
6 of 27
September 15, 2011
Anonymous - I'm not sure your information is the most up to date. For a run down of the pros and cons of geothermal heat pumps including average efficiencies and cost savings, check out this article: http://reut.rs/qu66sB
Comment
7 of 27
September 16, 2011
A company called Water Furnace in Indiana also makes them. :-)
Comment
8 of 27
September 16, 2011
This sounds a lot like a promotion for a solar dhw preheater. It pays for itself in 6 years eh? Can we really blame the public for being skeptical and not embracing the technology at industry's word? How difficult could it possibly be to monitor the energy delivery of some typical systems and publish them along with each case's energy costs? Every case will be different. I live in a place where natural gas is 3 times less expensive than electricity. I figure a heat pump might give me a COP of 3 at best. That means to me burning fuel will cost me exactly the same as electricity to run a heat pump and the cost of the heat pump is tenfold. Its a lot like solar thermal. Where I live, solar thermal is an 85 year payback period but the Canadian Solar Energy Association publishes a document called CanSia's Solar Vision 2025 and in that document on page 35 it states that a solar thermal system in Canada will pay for itself in 6 years. It says this is verified by the accounting firm of Ernst and Young. I'm happy to prove to anyone interested that its not even possible for a 32 sq ft solar panel system costing $5000 installed with tank and controls to pay for itself in less than 50 years against natural gas at $10/GJ. This delusional thinking on the part of the industries promoting emerging energy technology is what has stifled the solar movement in Canada and I see no reason to think the forces at play are any different when it comes to geothermal heat pumps. The public is cynical. The public wants real numbers and real numbers are easy to come by if the industry truly wants to move things forward by identifying the viability of technology site by site instead of trying to sell us all on the idea that everyone should have a heat pump or everyone should have a solar hot water heater. I've been in this game 26 years and I've been looking for data to help me know if heat pumps make sense or not and to date I have not been convinced. Published monitoring what we want.
Comment
9 of 27
September 16, 2011
I converted to GSHP six years ago. I figure I start making $ this winter. I'm drawing off an existing water well and dumping to a very large dry well I had excavated. Hot water is cheap in the winter--in at 100 degrees F and boosted to 120 by an electric resistance tank. Some hot water is free in the summer when I'm running the central air--not often here in the Catskill Mtns of NY. Very low maintenance. Other manufacturers are Econar, Florida Heat Pump (owned by Bosch) and Trane. I have a big Econar--sized for heat and an in studio, smaller Trane. We're figuring 5 year pay back in this climate on new construction if you can enlarge the foundation trench and run horizontal closed loops. There's a company now in the market offering a thermal power agreement on large projects only with vertical bores. They will drill and own the bores. The building owner will buy the thermal energy over time on contract. This eliminates a big chunk of the upfront costs. GSHPs came from the drilling industry. The national association -- The International Ground Source Heat Pump Association--IGSHPA--is based in Oklahoma and the national conference is in Oklahoma every other year. Not the biggest media market. The industry is growing 20 to 30 per cent a year, even during the down turn. Not too shabby. There are about 3 million installed world wide. There is a 30% federal tax break for the next few years. Over 160 colleges and Universities have everything from one building to a whole campus. Ball State U in Indiana is doing 4,000 well bores and taking the whole campus from coal to geo.
Comment
10 of 27
September 16, 2011
Ice rinks can do a COP of 7. Take the heat out of the ice and put it in the building. There,s lots of them all over Canada.
Comment
11 of 27
September 17, 2011
Thank you for the web monitored data and the valuable input on the truth, the numbers, the reality. I've spent the last 3 hours studying the data and the links, graphs etc and there is s one little thing missing, an analysis of the data. I believe an ice rink can do a COP of 7. I believe a heat pump can get a great cop when taking heat from a water source like a lake but too many people selling heat pumps think ground source is the best even when there is a running stream nearby that could be tapped into. Nowhere in any of this am I finding the data I need to be able to convince anyone of what makes sense for them. Lots of data with lo9ts of things that don't add up like the Fafco hot water heater which right now is raising water temperature 18 degrees with the solar pump off. On another one there's an ERV with in and out temperatures that appear to mean the unit is creating energy. I'm just saying that we have to do better than just saying its a good investment and it makes sense. Show me some verifiable data like the data we publish for sites like this www.powerstripsolar.com/Control/Kamloops
Comment
12 of 27
September 21, 2011
In 1985 I had a Climate Master GSHP installed for a new house in Maryland. The unit was replaced with a Climate Master SEER 27 system in 2007. The original unit was very reliable, but the new unit had some quality issues (bad thermistor sensors and a leak in the coil, which they replaced at no charge). All in all, I've been very happy with the system and the thousands of dollars it has saved me in energy costs over the years. It has paid for itself many times over and I would do it over with no question.
Comment
13 of 27
September 22, 2011
I have continued to do serious research in the highly efficient HVAC field and still after many years have sticker shock when getting a quote or figuring out how to do most of the work myself on a GSHP or ASHP system. The markup in the HVAC field is criminal, as is the manufacturer's COP claims. They seem to forget to include all the pump and other electrical loads in their calc for COP. In working with a local university I was able to see real world monitoring numbers for GSHP systems. The hot water is not 'free', it makes a noticeable difference in the COP. The average COP for a well commissioned system in our area was 2.0. When compared to air source heat pumps, the GSHP COP could not compete at it's price point. The exception is for areas with 'good soil characteristics' and many very cold months. Otherwise the COP equivalent for ASHP is 2-3 and it is much less costly. BTW, GSHP companies would benefit from showing numbers based on HSPF like the rest of the HVAC industry. The US HVAC industry in general would benefit if they caught up to the Japanese designed Eco-Cute systems with their extremely efficient power electronics, smaller pumps and superior refrigerant.
For our area...
All Climate Heat Pump (ACHP) - payback=30.8 yrs cost=$14,700
Air Source Heat Pump (ASHP)* - payback=11.4 yrs cost=$4,400
Ground Source Heat Pump (GSHP) - payback=30 yrs cost=$15,000
GSHP with 30% tax credit - payback=21 yrs cost=$10,500
DX Ground Source Heat Pump - payback=28.3 yrs cost=$13,000
Air Source Heat Pump (ASHP) - payback=15.4 yrs cost=$7,350
*self installed
My SDHW system will payback quicker than any of these systems, but I still need one of these systems to lower my total electrical needs before I install PV. Adding insulation close to Passive House standards and a high performance HVAC system will allow me to buy a reasonably sized PV system and become a net exporter of power in the 'cloudy' Pacific NW.
Comment
14 of 27
October 4, 2011
The first thing to realize is that Florida is different than Maine and the methods and costs of installing a geothermal HVAC system is just as different. (Maine has hard rock and Florida has sand for much of the State and Maine is heating dominated and Florida is cooling dominated) The cost of installation is just as variable.
Geothermal HVAC was developed by people in the HVAC industry. The first ones were DX, which were quickly abandoned, due to inherent problems, for water both open loop and closed loop. The International Ground Source Heat Pump Association (IGSHPA) was formed to promote the technology and to do testing and development of ground connection material, methods and equipment. Training and certifying installers and well drillers is a core component of IGSHPA.
The idea that HVAC contractors and well drillers are charging outrageous prices, is not true. In fact most HVAC contractors have a hard time staying afloat and much technical and professional development work in the industry centers on how to become profitable. What I learned a long time ago is I could be one of the low cost installers who figured out shortcuts and other ways to reduce cost, or I could be one of the experts who did best practice. I chose to be an expert who believes in best practice. Without question the lowest cost HVAC contractor practices the opposite of best practice and provides some of the worst performing systems. What someone who wants a geothermal HVAC system should be concerned about is operational efficiency because this is the bigger cost of ownership.
In New York State well drillers are drilling at or below cost because of the poor new construction economy, and the cost per foot has gone down from $20/ft for closed loop to $16/ft. Keep in mind a new drilling rig costs over $250,000,nit burns several gallons of fuel an hour and bits wear out quickly. Resist installing smaller well fields as the operational efficiency is directly affected by size of field.
Comment
15 of 27
October 4, 2011
Funny, in our area the HVAC contractors have fancy buildings, vans, suits, ads on the radio and paper, etc. None of this portrays a 'just getting by' or just staying afloat. I completely agree with best practices and proper commissioning, which is rarely done. You can check the fact that systems are rarely commissioned correctly through reports from our local PUDs, for profit power companies, and our regional power authority. These third parties come out and check for proper commissioning after install so that you can get your excellent rebate for heat pumps and duct sealing. Being one or two degrees of separation from the local HVAC owners, I know for certain the markup and how well they have been and are doing. Good on you if you do not charge exorbitant prices, but that is not the case around here, nor in MA, TX, CA, and OR. How can it cost $3k above all hardware, parts, fluids, etc. for ASHP system? Why can my neighbor put in the $15k GSHP for just under $10k working with a 'low cost installer', and get a positive commissioning report? It is called price gouging. We had this same issue in the PV field years ago with equipment prices and install prices. Now that it is well known what equipment prices are and anyone can by the equipment, we 'suddenly' have decent prices for the hardware side on quotes. But the overhead/labor prices are still gouging everyone. Enter group buying schemes. I hope that corrects this gouging and that those groups start working on the HVAC industry.
Comment
16 of 27
October 5, 2011
First, one should be very careful about charging HVAC contractors with gouging. If a contractor wants to pay living wages, provide health care and 401K contributions, then he has to charge a mark up appropriate to his/her overhead and profit. Research shows that the cost of providing a trained crew of two with a van and tools costs the contractor between $125 and $150 per hour. There should be a fee charged to all customers for warranty service. (Most manufacturers of HVAC equipment only provide parts under warranty and at best provide a small labor allowance that does not cover the cost of the warranty repair) He should also be able to make a profit of 10%. When one adds up all costs to operate. Building contractors I know have found that the cost of materials is about half of the cost to install product (windows for instance.) Do you want your installing contractor around to provide service? Then let him make a profit!

The guy who did the work for your neighbor likely has reduced his overhead by having no employees, office and perhaps no insurance. How many days has he spent in training? I devote several days a year to training so that I can stay current with new products, best practice and such.

When I get a call for an estimate I ask if they are getting three estimates, when they say yes (they have always said yes) I tell them "Good,I am the most expensive." They will either hang up or ask how I can say that. I tell the ones who stay on the line that best practice costs money, and then get into the details. I cannot survive by being the low cost, fly-by-night contractor.
Comment
17 of 27
October 5, 2011
Mad Max, I am not say (and never did) they can not make a profit - get real dude. Stop your flames, I am not attacking you, I am being careful by showing real numbers, giving real examples. I agree that 'standard' building contractors do use that formula - I see it all the time. Using your numbers, that overhead/profit should be $2k for $4k worth of ASHP hardware - were is the other other $1k going? To excessive mark-up - and that example was the low bid price.

The GSHP installer example I gave was from a man with a couple of decades in the business, he has a nice truck and all the equipment (remember I did mention that commissioning was perfect on that system? thus his skill set is good). Never seen his office and did not ask about his benefits, but being in business that long has to say something. Through discussions, I could tell his belief system was living below his means, as that matches my lifestyle and my neighbors. Maybe other contractors are not living below their means and thus they mark-up too much. It is a problem in our society. I also understand that most 'premium' installers assume everyone else is 'fly-by-night'. It's like Apple claiming they have a better computer, when they 'borrowed' their OS from BSD - a free OS. Then they re-badged the box and call it a premium computer. A pretty face and some pretty quotes do not make a premium product/service.
Comment
18 of 27
October 22, 2011
Geothermal is GREAT!! Just be warned. Not all geothermal manufacturers are the same. Some are great, some are ok, and others are just down right garbage.

For example, my ClimateMaster Transquility 27 system is less that four years old. But in those four years, I have had 2 separate electrical components fail (one literally burned up), 2 separate leaks to the sealed freon system, and a mechanical valve failure. Think these are covered under warranty, think again. I have over 20+ separate days off from work and over $1,000 in non-covered repair expenses. I would not recommend ClimateMasters to my enemies.

31 October 2011

Happy to report that communication lines between the manufacturer, distributor, installer and myself have opened up. The manufacturer agreed to fully cover the costs of the most recent repair needed or provide a new replacement unit. This was impressive. ClimateMaster agreed to the repair or replacement unit within 5 days after being provided the history on the system. Thank you ClimateMaster.

VBTony
Comment
19 of 27
October 22, 2011
VBTony,
ClimateMaster has an OPTIONAL 10 year warranty. Others, such as WaterFurnace have a standard 10 year warranty (that the contractor or owner can get credit for eliminating) As with any product, one should be sure to check what warranty is provided.
Comment
20 of 27
October 22, 2011
Solar Boy,
I do not agree that contractors should live below their means. A contractor should be able to support his family.
When one buys a geothermal system, it is not like buying a car where you get the same exact thing no matter which dealership sell it to you. With a geothermal system the design and installation are key. Using the car example, would you be more interested in price or quality if the dealership put the car together and only the engine came assembled from the manufacturer?
The only good way to lower the cost of geothermal is to lower the buildings load so a smaller system will work.
Comment
21 of 27
October 27, 2011
Mad Max,
you really need to read what people post and I guess understand the English language. I never said people should not support their families. Please quit putting words into my responses or making assumptions. You are getting way off point and no one wants to read it. The numbers tell a point, they are facts. End of story.
Comment
22 of 27
October 27, 2011
Your numbers only tell the story you want, distorted to your point of view and based on your language how can I help but understand it as an attack on my making a profit appropriate to risk just like any other legitimate business in the capitalistic society we live in.

You accuse HVAC contractors, as a group, of being criminal in what they charge and I say you are wrong. You are the one who is attacking an entire industry, and then getting upset when I, a member of that industry with over 35 years of experience call you on it. You say that prices charged by HVAC contractors is gouging and I disagree, pointing out we are trying to make a living in a very competitive field.

You are making rash accusations and condemning an entire industry, calling us criminals and you should stop it now because you are wrong.
Comment
23 of 27
October 28, 2011
Mad Mad Max, I am beginning to understand your chosen name on this forum, you seem to be mad about something. Breathe. Like I've said before, I am not attacking you. I do not have an agenda, nor a story "I want to tell". I was just sharing real world numbers on the subject. Sorry you can not see that. No one wants to read your bickering at me, again please stop. My opinion is not rash and I never called you a criminal. You need to learn not to 'read into' anyone's website comments, statements or e-mails. Especially when that person tells you they are not and never did mean what your imagination contrives. I am not upset, if I was I would not even respond here. Why in the world would I be upset anyway? We are having a somewhat good conversation. It sounds like you are upset though and feeling attacked. Again I am not attacking you, please do not feel that way. We each have opinions and experience and can share that in a positive way and both are good. If you disagree with my numbers, then your action should have been to post your numbers and with your excellent experience, breakdown those numbers and teach us all something about where those numbers are coming from. That is what a forum like this is supposed to be all about. Instead, you are focusing on the negative and getting upset. Please try to stay positive. And lets have real information for people to learn from. I see 'price gouging' going on in many fields including my own multiple fields. It is not a practice of mine. If that is a phrase that you do not like, then lets call it 'massive profits', as in massive oil company profits. We all know that that is not 'price gouging', it is just profit - right! We all can agree, I hope, that those profits are too high. I say they are, maybe you don't. But the readers here want to see my example that they are and your example that they are not and not much more.
Comment
24 of 27
October 28, 2011
I accept your assertion that you were not attacking when you called HVAC contractors criminals in response post #16. You also said that the COP numbers of geothermal equipment were criminal and erroneously stated that they did not include pump or other electrical use in this same post. It should be noted that Resnet changed their position on this to correctly represent the DOE testing protocol, you should as well. All testing is done by third party independent labs to DOE standards.

Your comments in that post were rash and misleading to say the least. It was your condemnation of HVAC contractors and geothermal manufacturers as criminals that got me to post. If I am mad about anything, it is at your indiscriminate bashing and baseless claims of excess profit being made by geothermal contractors.

You ask for numbers. Assume a small 4 person shop, owner, office manager and two technitions. The shop costs $1000 a month to rent, the monthly health insurance cost is $5000 a month with half being paid by the business, the advertising is $1500 a month, utilities are $800 (including gas for the vans), and the lease on the two work vans is $800. This means the shop owner has to clear $6600 a month before paying any employee. If they can do three geothermal jobs a month, this means that the overhead for each job is $2200. Then add in the monthly labor cost for the 4 people, $15,000 including employer FICA taxes and $7,200 in mark up is needed per job before any profit is made. Sure you could leave out the advertising, but then how will the owner sell three jobs a month? You could assume more sales, but that would require an increase in other costs to support the higher sales rate. This is a simple outline and will be different for each small contractor, but he can only pay his bills by charging enough over the cost of goods to meet his monthly nut.

It is this "hidden" expense you seem to be missing when you claim HVAC contractors are criminals.
Comment
25 of 27
October 28, 2011
Mad Max, those are a start for the behind the scenes numbers, but we are talking about job costing. So break one of your jobs down for us. We both agreed that approximate profit/overhead was 2x hardware costs. Lets see a real world quote from your outfit. I used that 2x term you threw out and still the quote was a $1000 higher. That quote is the low end example. The two local 'big boys' in the industry had higher numbers for similar equipment. I am sure their costs for the bigger brand names are higher, but we are talking $2-4k higher. How can those of us not in the industry be assured those numbers are not 'massive profits'? It is very difficult to get hardware costs from the HVAC equipment distributors if you are not an installer. Why is that? What are they hiding? My example numbers show much higher than 2x for profit/overhead? I think until the install side of the PV, SDHW, and the HVAC industry get the pricing closer (and lower) to the 2x number we will not see much uptake by consumers. And that last statement is what this discussion was supposed to be all about. I desperately want to see all those industries get better and get massive public uptake. If we do not discuss how to achieve this and move toward results, we will stay stagnant and wasteful in our energy consumption and production. Mad Max, again please drop the rhetoric part of your discussion. No one wants to read it, you can respond without it. I am not tying to get the last word in on this, or whatever it is that keeps prompting you to beat that off-subject topic so hard. Can we please stay focused on what people want to read? Please breakdown a couple of real quotes you have recently sent out. Maybe even get some from your local competition and share with use how you think they are breaking the profit and overhead down. Thanks.
Comment
26 of 27
October 28, 2011
Steven,
I merely quoted your statements. You are the one who used "criminal" and the other rhetoric. Are you willing to rescind your earlier statement of criminality? If so then we can get real.
Comment
27 of 27
October 28, 2011
For those interested I have the following contractor cost for a 4 ton geothermal heat pump system: Heat pump $6500, flow center (pumps)$750, thermostat $200, back up electric heat $350, electric $800, inside piping and insulation $850 for a total equipment cost of $9450 plus sales tax. This does not include any ductwork, wells or labor. Add in my calculation of $7200 for the labor and overhead portion and you get $16,650 plus sales tax without the wells or ductwork( and profit)

Depending on the location and building efficiency the wells will be at least 800' for NY. At $16/ft (current price in NY for well drilling and pipe with grout) this comes to $12,800 for a total price of $29,450 plus sales tax and ductwork. Ductwork for a new complete installation can run $7-$10K. If we add $8K for the ductwork then the price is $37,450 plus sales tax. If we figure a 10% profit, before taxes, then the total is $41,195 plus sales tax.
Add Your Comment

Registered users, please make sure to Sign-In. We and others want to know your ideas and opinions. If you are not yet Registered -- it's quick and easy. Just click below.
Thanks!

Register Now   Sign-In

Maritime Geothermal

View Maritime Geothermal's Profile
About: Maritime Geothermal Ltd. manufactures the NordicĀ® line of geothermal heat pumps. Maritime Geothermal operates the only CSA- certified performance & safety testi... more »
World's #1 Renewable Energy Network
PennWell
Renewable Energy World Magazine International Renewable Energy World Conference & Expo North America Renewable Energy World Conference & Expo Europe Renewable Energy World Conference & Expo Asia Renewable Energy World Conference & Expo India Renewable Energy World Conference & Expo Africa
RenewableEnergyWorld.com Solar Power Gen Conference & Expo Hydro Review Magazine Hydro Review World Magazine
HydroVision International HydroVision Brazil HydroVision India HydroVision Russia
Twitter Facebook Linked In RSS Feeds e-Newsletters