The Hidden Genius of Geothermal HVAC Systems

For more than 60 years, geothermal HVAC systems have been used in the U.S. and around the world. They work with nature, not against it. They can heat and cool a home or commercial building without burning any fuel or emitting greenhouse gases.

Consider that sustainable home building accounted for 20 percent of all new homes in the U.S. last year and the Wall Street Journal reported that sustainable housing will grow from $36 billion a year to as much as $114 billion a year in 2016, approaching 35 percent of the entire housing market. This is not a new technology; it is not a science experiment, and certainly not rocket science. In fact, in many European countries, geothermal heating and cooling is the standard. In Sweden and Switzerland more than 75 percent of new homes have geothermal. The U.S. Department of Energy and the U.S. Environmental Protection Agency have acknowledged that geothermal HVAC systems are the most energy efficient, environmentally clean, and cost-effective space conditioning systems available.

Geothermal Heat Pump Systems

Geothermal heating and cooling is often referred to as Geoexchange, Geothermal, or Ground Source Heating and Cooling. They all mean the exactly same thing, so don’t get confused by these names being interchanged.  Also, this is a good place to mention that we are not talking about geothermal power involving utility-scale power plants generating electricity using heat drawn from the core of the earth. We are talking about using the crust of the earth, 12 to 400 feet below, to heat and cool a home or building.

The two main parts of a geothermal system: heat pump and ground loop

Winter Operation

The underground pipes, called a ground loop, circulate water which absorbs the heat from the earth and returns it to the indoor heat pump. The heat pump extracts the heat from the liquid then distributes it throughout the home as warm air. With the heat removed, the water is re-circulated to collect more heat from the ground. In this case, the loop water is warmer when it comes into the home than when it goes back into the earth since the heat is being removed.

Summer Operation

The indoor heat pump takes the hot air from your home and removes the heat. This leaves behind cool air to be distributed through vents as air-conditioning. The removed heat from the air is re-injected into the earth through the ground loop. In this case, the water is warmer leaving the home than when it returns since heat is rejected into it.

Case Study:  West Construction and the Lafayette Place Lofts

The Lafayette Place Lofts, originally a Sears store in downtown Pontiac, Mich., was converted into 46 lofts and two commercial spaces comprising a total of 80,000/sf by West Construction Services in 2012.

“Lafayette Place Lofts is designed with a holistic approach encompassing the eco-friendly and Energy Star ideals. Enhancements have been incorporated into the LEED design criteria to provide a building that will be a long-term benefit to the community, residents, and the environment. The geothermal HVAC system was engineered by Strategic Energy Solutions of Berkley, Mich., and installed by West Construction Services, of Pontiac. The geothermal HVAC provides a one hundred percent sustainable solution that makes economic sense,” said Brent Westberg, developer of the project.

Brent Westberg

A summary of features in the project’s sustainability plan include:

  • HVAC and electrical systems designed to the most efficient standards possible
  • On-site geothermal utility and photovoltaic cell panels
  • Strong effort to come as close to NetZero as possible   
  • Use of recycled and / or sustainable building materials
  • LEED Platinum design
  • Geothermal heating and cooling

Additionally, Westberg said that the development will attract users who complement the green, low-waste lifestyle.

“This project is targeted towards an audience, many of whom, consider themselves urban pioneers, and have an array of personal interests bonded together with a single idea of living healthy and green,” he said. “Not only does the energy-efficient design help create a green space, but attracts health-minded tenants and members of the community.”

Sizing a Geothermal Heat Pump

Geothermal heat pumps vary in size depending on the size (SF to heat and cool) of the home or commercial building. There are a number of factors that determine how big of a pump is needed. Since sizing a geothermal heat pump is an intricate process, homeowners need to contact a qualified geothermal heat pump contractor or engineer. They will start with an energy audit or analysis of the heating and cooling demand of the building. From there they will be able to calculate the right size system. The size of the system will dictate the size of the loop field.  It is very important to contact an experienced geothermal professional before choosing a heat pump size because there can be problems with undersized and over-sized systems. An experienced contractor will know how to design the system accurately which ensures a long lifespan and low operating costs.

What Goes into Pricing a Geothermal System?

When a homeowner is thinking about installing a geothermal system, the initial cost is certainly one of the factors that plays a role in the decision-making process. Although geothermal heating and cooling will save money in the overall cost of ownership, it is typically more expensive to install than conventional electric or gas fired systems. There may be special financing (such as PACE) to keep this on an even field. The indoor equipment isn’t much more expensive; its the underground portion known as the loop-field which adds to the upfront cost. Consumers should first become acquainted with the geothermal installation process to understand how the cost is derived.

Example of the typical apartment size geothermal heat exchanger that fits
into the utility closet that would otherwise contain gas or electric HVAC

The short answer to how cost is calculated is:  Indoor Portion + Underground Loop Field = Total System Cost. The inside portion is composed of the price of the geothermal heat pump, its installation, and possible duct work modification. This is done by an HVAC contractor properly trained in geothermal. The Underground Loop Field involves drilling (or sometimes excavating) and materials. This is usually done by a well driller. The loop field is approximately 50 percent of the total cost, although many factors affect this estimate.

For any given situation, the following variables are considered:

Size of the Home or Building

The first factor that we’ll take a look at is the size of the home or other building for which a homeowner would like to install geothermal. Look at it like this — a 2000 sq. ft. home isn’t going to require the same amount of heating and cooling as a 6000 sq. ft. church. The larger the area covered, the more heating and cooling it is going to demand. That said, a major variable of pricing is the insulation factor, which has a direct effect on how much heating and cooling is needed. Is the home well-insulated home or is it a cardboard box?

Size of the Heat Pump

Based on the size of the home, insulation, and climate, the amount of heating and cooling needed is calculated, which in turn enables a contractor to calculate the size of the heat pump for the job. Needless to say, a larger heat pump is going to be a little pricier than one that’s smaller in comparison.

Size of the Loop Field

Next, the size of the loop field that’s to be installed in the ground comes into play. The size of the system (3-ton, 4-ton, etc.) along with the climate in which the home is located will dictate the amount of pipe that needs to be inserted into the earth. A loop field contractor will usually charge a price per foot; therefore, the larger the system, the more pipe that needs to go into the ground, the more expensive the loop field becomes. The loop field cost can vary by region because of the availability of contractors, the ground conditions, and also the price of fuel.

Usability of Current Ductwork

In most cases, ductwork shouldn’t be too large of a factor, as most existing ductwork requires little to no adjustment to be suitable for geothermal heating and cooling. That said, if the home doesn’t have existing ductwork, then the homeowner will have the full expense of installing it. However, it’s important to consider that this is a cost for which the homeowner is going to be responsible for regardless of what type of heating and cooling is installed. Ductwork is simply a necessity of almost all HVAC systems — not an exclusive monetary addition to the geothermal system pricing.

Ceiling-mounted heat exchanger that fits on to conventional ventilation system

These are some of the main factors as far as the cost of geothermal heating and cooling system goes. There are more minute components of pricing, of course, but these four (and all that they encompass) are the most important for consumers to grasp. Bottom line: size of home, climate, and labor dictate total system price.

All Geothermal Is Not Created Equal

A quality contractor, with the right training and experience, is the key to a happy geothermal system customer. For this reason, it’s important to never choose a contractor based solely on price. An inexperienced contractor can undersize a system, producing a lower quote. However, the system will not produce the desired efficiencies.

So How Much Will It Cost?

Hopefully by now it is clear that that the final cost is situation-dependent. To get an actual quote on a project, homeowners must start by contacting a geothermal specialist.

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Douglas Elbinger is Energy Systems Analyst at Newman Consulting Group, LLC. He focuses his efforts in finance for the solar energy and energy conservation spaces. He is a co-founder of, a cloud based solar design service that is one of the Quicken Loans family of companies and a partner in Newman Consulting Group.

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