Is Geothermal a Viable Option for Anybody?

I often hear from people that geothermal heating and cooling is not a practical choice for many people. Reasons cited are cost of installation and the misunderstanding that a large rural lot is required.

Geothermal Explained: 

Geothermal is a combination of two words. Geo means ‘of the earth’ and thermal is to ‘heat’. The earth is a giant insulator. The ground temperature as little as five feet down remains almost constant all year round.

The heat store under the ground can be transferred to a building through a series of pipes called loops. The underground or underwater loops remove the heat from the ground and pump it into the building.

For cooling, the system is reversed. Heat is extracted from the building and pumped back to the earth.

Is Geothermal Difficult to Install? 

The short answer is no. Depending on the space available, the installation of geothermal loops can be done in several different ways.

A vertical loop requires a deeper excavation than a horizontal loop, but it does not require a large rural lot. Loops can also run into a nearby pond or lake. Toronto has 130 buildings that draw their cooling energy from Lake Ontario.

Vertical installations are completed with powerful machines that drill down into the earth to find the warm spot, usually100 – 200 feet down. Horizontal loops require excavation of long trenches.

Horizontal Geothermal Installation

Horizontal Geothermal Installation

What about the Cost?

On average, a geothermal system will cost 2 to 2.5 times the cost of an equivalent quality conventional heating and cooling system.

The geothermal system handles both heating and cooling. The system can also provide a good part of your hot water needs.

Homeowners that are building new or renovating will typically see 12 – 21% ROI (Return on Investment) on the premium paid for the geothermal system. The payback for a geothermal system can be as little as 3.5 years.

It’s not just for new construction. Older homes are not as well insulated and are not sealed off like a new home. A geothermal system can cut utility bills by up to 70%.

Fluctuating Energy Costs

The costs of oil, hydro, propane and natural gas have fluctuated in recent years. We all know about oil and hydro prices. Propane has recently become very expensive and low natural gas prices will not last forever.

Geothermal costs have remained stable since 2006 and are lower than $875 annually for most homes.

Geothermal delivers more bang for your buck. You get more heat per kilowatt of electricity used to run a geothermal system than any other fuel. You also produce additional energy, which can be used to heat hot water or warm swimming pools.

Home Resale Value 

Assume you have two homes that are equal, except for their utility system. One house with a traditional gas furnace and hot water tank will have a resale value of $300,000 in the current market. The one with geothermal should be worth 18 % more, with a resale value of $350,000.

The reason for the significant difference in value is twofold. First, geothermal systems are more energy-efficient. Second, replacement value is a factor with geothermal systems. They typically outlast conventional heating systems. The ground loop, which is a large part of the system’s cost, never needs to be replaced.

What is the Track Record for Geothermal? 

Geothermal was first used to heat Canadian homes in the 1940’s. Since then, there have been many improvements in technology. Geothermal is now widely used in both businesses and homes. A number of well-known buildings such as Rideau Hall in Ottawa, the Pan-Am Aquatic structure in Toronto and The Forks Market in Winnipeg use geothermal. Even Buckingham Palace has a geothermal heating system.

Geothermal is a proven, reliable and green solution to your home comfort needs. For more information on geothermal heating and cooling, please visit our geothermal section of the website.