Geothermal Energy Home Renovation Considerations

As the project progressed, the homeowners and I decided that it was time to meet with a heating contractor to discuss which heating system would be the best fit for the project. I have always been a fan of reviewing options, so the first heating company representative showed us multiple systems, which included: upgrading the existing propane-fired forced-air furnace with air conditioning, a mini-split system, an open-loop geothermal system and a closed-loop geothermal system.

I have learned throughout the years that there is not a magic one-size-fits-all solution to heating and cooling in a home. My hope here was that geothermal was going to be the best value versus performance for this project. The homeowners had heard that geothermal was the most efficient heating and cooling system available, and we were going to rely on the heating and cooling company to show us the performance data to see if that was correct or not.

The house was built in the early 1990s, and I was impressed with the tightness of the house. The exterior of the house had 1-inch foam sheathing with 2-by-6 walls and fiberglass insulation. The attic insulation was blown-in insulation, which, in my opinion, could use another foot of depth for better performance.

The addition that we built onto the existing house has insulated concrete form (ICF) basement walls with 2-by-6 main floor walls. We would spray foam in the walls and to the bottom of the roof deck. Another thing to note is that we stayed in the house as we were working on it, so I could witness how well the house heats and cools with the current forced-air system.

We met with our heating contractor and were presented with a number of options. It’s hard not to focus on the price tag of each option when looking at a heating and cooling system. There was a range of price from about $14,000 to $36,000, with the highest price tag for a closed-loop geo-thermal system. As a group, we gathered our composure and started to go through each system to see cost versus performance.

We asked specific questions about each system and the heating and cooling contractor did a good job of explaining everything except for why some systems were so expensive. After the meeting, we still were not close to making a decision on a heating and cooling system. We decided to contact another heating and cooling company who had been in the geothermal business since the 1980s. We set up a meeting with this company and they sent their sales manager to meet with us. We were once again very interested in learning all that we could about the cost versus performance of geothermal systems.

Trouble Getting Clear Information on Home Geothermal

My first impression of the sales manager wasn’t that great. I knew about a few “smoking guns” with geothermal systems, especially in the area of this project. I sat back, listened to his sales pitch, and waited to throw my curve ball.

When the moment was right, I asked him a question that derailed him and his sales pitch, “What about iron bacteria in the groundwater shutting down an open-loop geothermal system? His response sunk his ship, “We have installed thousands of open-loop systems and never had one shut down because of iron bacteria.”

“Not one?” I replied with a tiny hint of question in my voice.

“Well,” he said, “I will have to check with the owner to be sure.” Here was a top geothermal company with decades of experience telling us that. The red flags went up and we thanked him for his time and asked him to send us his price — which came back very close to the first company’s, except he’d offered a larger geothermal system in his bid. We wondered why the two different companies had conflicting information about the size of the geothermal unit. One of the responses was, “that is what the computer says that this house needs.” Which size unit was the correct size?

Two companies into this quest and neither of the companies said the same thing about open- and closed-loop geothermal systems. The information was completely different between the two companies, including that one company said that an open-loop system was more efficient than a closed-loop system and visa versa with the other company. We all looked at each other and agreed that we needed to meet with a few more companies to try to find a common thread so that we could understand which heating and cooling system was a best fit for this project.

Over the next week or so, we met with three other heating and cooling companies. To our surprise, each of those companies gave information that contradicted what the other companies said. One company quoted a price in the $50,000 range for a closed-loop geothermal system while the others were in the mid-$30,000 range. All companies mentioned the un-capped 30 percent federal tax credit, which put the net cost of a closed-loop system back into the mid-$20,000 range. Each company’s computers told us a different unit size was appropriate.

Evaluating Electric Heating Assist Systems for Home Geothermal

One of the questions that I asked each contractor had to do with the electric heating assist, which is part of each type of geothermal system. These electric heating elements are what are used for heat when the temperature gets too cold for the geothermal system to operate the way it is intended to work. In a closed-loop system, the electric heating assist system starts operating when the earth around the buried closed-loop tubing drops to near freezing, which in Michigan, can occur as early as the beginning of January.

In an open-loop geothermal system, air temperature dictates when the electric assist starts heating the house. Some units say that 28 degree Fahrenheit is when the electric heating assist starts operating. Experts would probably add that the heating load is what determines when the electric assist turns on. We have a house that was built a decade ago and that house has an open-loop geothermal System and $680 per month electric bills because the electric assist was the primary heating source when it gets below 28 degrees.

Each of the contractors said that the electric assist will not run that much if the system is sized properly. We were very confused at this point, because each of the five contractors had systems that were sized differently. When I brought this point up to the sales people, they simply said that the computer decides the size of the system. One company told us that the electric assist will only come on once or twice a month. I asked him to write us a guarantee stating that and he back tracked and said that he can only go by what his computer says and that he couldn’t guarantee that.

We had our favorites with regards to who presented us with the information. It was a great experience seeing how salespeople approached this topic. Geothermal is such a hot button for homeowners that these sales people basically just need to sell themselves and show numbers to support their claims to get the sale. But selecting a heating and cooling system based on how much someone likes their salesperson is a recipe for unhappiness.

Comparing Cost of Home Geothermal to Other Options

I will present you with some of the figures that we were given. One of the figures that stuck in our minds was the difference in operating costs per year between the geothermal closed-loop system and a high-efficiency, propane-fired forced-air furnace with a heat pump, which ran for $800, or $66.66 per month. There is about a $20,000 difference in price depending on options, and I did not figure in the tax credit into this equation.

What I recognized immediately was that the closed-loop system was not extremely more efficient as it was presented to us. Technically speaking, the geothermal would be less to operate than the forced-air with the payback on the geothermal being about 20 years — about how long one of the salespeople said that the geothermal unit would last before needing to buy another unit.

As a sustainable builder for many years, I have fostered open-mindedness to anything as long as the science and my experience supports a technology. I will be honest and say that I went into these meetings with the heating contractors with an open mind and a blank piece of paper for note taking. I was giving them the opportunity to change my mind and I did get my hopes up a few times as I heard the information being presented with such confidence. Confidence coming through in a sales pitch is a double-edged sword in my experience, and in this instance, it created many red flags.

Which System Did We Choose?

You may be wondering how this turned out. Well, after all of the meetings and reviewing of information, we decided to go with the first contractor. We decided that installing new, high-efficiency, propane-fired forced-air furnace with a heat pump (acting as air conditioner during the warm months and heating during the cold months) and using the existing ductwork as much as possible was the best fit for this project.

Four of the five geothermal contractors told us that they would have to remove the existing ductwork and install new ductwork. We also added extra zones to the heating and cooling system along with upgraded air filtering and purification components. The difference in price between the systems, versus a closed-loop geothermal system, was about $16,000. As a team, we decided that a portion of the $16,000 difference would be applied towards a solar hot water system and solar panels to produce and store electricity.

Photos by Adam D. Bearup

Adam D. Bearup is a designer, green builder and farmer, who learned about biodynamic and regenerative farming for a project he built in Northern Michigan, The Earth Shelter Project Michigan. Adam has degrees in marketing and management and a Masters of Science in Green Building. 

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