One of the biggest costs to home ownership is the energy cost associated with owning a home. It’s not written anywhere in the mortgage agreements, and generally, the sellers will probably low ball you if you ask for an estimate. According to the Department of Energy, the biggest draw on your home energy use comes from heating your home – Almost 45% of the overall cost!
When thinking of ways to reduce the overall cost of home energy consumption, it makes the most sense to tackle the heating and cooling costs. It makes up the biggest chunk of the pie, and there are great options available for reducing it. From insulating your home, replacing windows, even completely upgrading your heating system to something more efficient, the options are endless….
Including A Free Option
Heating may take up about 45% of your utility bill, but luckily, there is more than enough heat to supply your home, sitting right beneath your feet. Even better, there is a way to extract that heat from the warm earth and use it to heat your home. The heat found in the earth beneath your home is completely free, completely reliable, it will never run out and it takes no harmful natural gas or oil to extract it. The heat is there, you just need a system to pump it out.
Geothermal heat pumps are one of the most efficient ways to heat and cool your home. This is because a heat pump, unlike other heating systems, doesn’t create any heat. It simply moves heat from the ground, into your home, using a refrigeration circuit and a collector system buried in the ground. When comparing geothermal heat to typical electric baseboards, they are 70% more efficient. Where an electric baseboard uses one watt of electricity to produce one watt of energy, a geothermal heat pump uses one watt of energy to move three watts of heat from the ground into your home. Imagine cutting your heating bill down by 70%!
Now, heat pumps don’t come without their initial cost. A collector system must be put into the ground to absorb the heat. There are several configurations of collector system available depending on what type of soil, landscape, and equipment is available in the local area. The collector system costs money, how much depends on many factors.
In Canada, the average for the entire, complete system is between $24,464 and $31,544 for a 2000 square foot house. While this may seem like a big initial investment, the cost is easily paid back by the 70% energy bill savings. There are also government grants that can be accessed to reduce the financial burden. A typical heat pump will last 30 years, and the collector system will last 50 years, so once the cost of the installation is recouped, you can look forward to many years of low cost heating and cooling.
Facts and Myths About Geothermal Heat Pumps
The geothermal heat pump market is rather small, and as such it has had it’s fair share of ups and downs when it comes to the progression of the technology. The is a lot of misinformation out there about the abilities of geothermal heat pumps, so let’s clear a few of those up:
Myth: Geothermal heat pumps cost upwards of $50,000 to install in a typical home.
Fact: While the cost for geothermal system vary from home to home, $50,000 for a typical home is outrageous. Talk to multiple reputable installers and get competitive quotes – installations should not be that expensive.
Myth: Geothermal heat pumps only work in rural areas where there is lots of land to put the collector system.
Fact: Much of Toronto’s downtown core is heated and cooled with geothermal. Due to advances in the technology of angled drilling, geothermal collector systems can be installed vertically in a very small land mass. Because the collector system has an expected lifespan of fifty years, they’re often installed under driveways, parking lots, or the buildings themselves.
Myth: Geothermal heat pumps don’t work. They degrade over time and they don’t save you that much money.
Fact: When geothermal heat pumps aren’t installed correctly, they don’t work correctly, causing higher than expected energy bills and poor performance. Always make sure to work with an experienced installer.
Myth: Geothermal heat pumps won’t work for my house/office/commercial building/school.
Fact: There are a few rare expections where geothermal isn’t economically or physically feasible. However due to the evolution of the technology over the past few decades, geothermal is being successfully and profitably employed in all of the above situations. Geothermal heat pumps are suitable for residential, commercial, retrofits, new builds, radiant in floor heat and forced air systems.
The fact of the matter is, geothermal heat pumps are a great way to save money on heating bills. They’re good for the environment because they make use of a naturally occurring heat source, and they help us reduce our dependency on fossil fuels. What’s not to like?
What sort of heating system is in your home?
Guest Post Author Bio: Jordann is a part time runner, yogi, local foodie and personal finance aficionado, and a full time marketing professional living and working in Atlantic Canada. She writes about her life at her blog, My Alternate Life.
I am not certain what a heat pump like this would cost in the States. My wife and I had some issues with our AC this summer and I think a new one is not that far off in the future. I do know we have considered a heat pump, just not certain the costs we should expect in one.
The costs should be about in line with what was mentioned in the article, or slightly above. By getting quotes from multiple, reputable installers you’ll be able to get a better idea of the costs in your specific area. If you’re thinking about upgrading your system anyway, I’d encourage you to at least price out geothermal as an option, you never know – it could make complete financial sense!
Just a regular old heat system is what we have. I have the house insulated extra in a few places, but even so, we do pay for heating. My wife and I have talked about geothermal heating before, but even at $25K we just can’t afford that right now. It’s definitely on our minds though because it sounds just awesome!
There’s also a 30% federal grant available in the US towards the cost of the system. That makes it a bit more financially feasible!
I’m very lucky that I live in a temperate climate. Our heating bills are very reasonable in the winter, and our A/C bills are reasonable in the summer. I like the idea of geothermal heating/cooling, but it wouldn’t make sense for us right now.
Geothermal heating and cooling gives the highest efficiencies in areas with high heating and cooling loads, if you live in a temperate climate, I’d encourage you to check out air source heat pumps when it comes time to replace your HVAC system. They’re cheaper and work just as well as a geothermal unit in temperate climates.
We live in a condo (high rise) so a geothermal system doesn’t work for us. I would consider it if we move into a house.
There are lots of condos that are being retrofitted or built using geothermal heat, so maybe it’ll be something you encounter in the future!
Interesting – honestly never thought much about this option before. I’d settle for a naturally heated spring out back of my house.. 🙂
I’m glad I’ve brought this new option to your attention!
If I had a house, I would try to figure out how to tap into the universe for electricy. OMGosh, the bills are horrible and I feel so dependent to the plug in! 😉
We had a bid for a solar system, and it was too expensive for where we are financially right now. I don’t know anyone who installs geothermal in our area, but sounds like it is worth looking into. Propane is fine when it’s cheap, but it continues to rise. Someday, we probably will have to do something different.
A lot of people in my area are marrying solar with geothermal. Since geothermal cuts down your electricity requirement, fewer solar panels are needed. By putting them together, many houses can go completely off the grid or become net zero homes. I’d love to do that someday, if I ever have the money.
I’ve never heard of a geothermal heat pump but then again I live in socal so I never use a heater haha. I could see how this could pay off pretty quickly though, you just have to look beyond the initial costs and see how much you can save.
Exactly. It is an investment in the future. I think you can even use them cool your house too so if you need A/C you might want to look into it.
My apartment complex is about to switch to geothermal heat. There are about 5500 flats and 20000 persons living in that complex so install costs are going to be huge but hopefully we will start saving on heating soon!
That is awesome. I am a huge supporter of businesses that are converting to green technologies.
Okay, here in the St. Louis, Missouri market, we paid right at 30K for our geothermal heating system. That included both heating and A/C , as well as a new water heater. Anyway, we were eligible for a 30% tax credit, so we were really only a bit over 20 grand out of pocket.
I pay the same all year round on my gas bill. About $30.00 a month. In the worst winter months, prior to geothermal, I would sometimes pay close to $300.00. The summer months, our bill was only reduced by about 25%.
And the fact that it added to the value of our home made it a good buy for us. We had it installed in Dec 2010 and love how much money we save in the winter. Winter used to be depressing, but not that I have an extra 200-250 dollars a month, I LOVE WINTER.
That’s awesome that you’re having such a great experience with your geothermal unit. Nothing beats a positive first hand review!