Geothermal + Solar = Expensive but Often Worth it

Homeowners who are interested in saving energy usually start with simple measures, such as installing a programmable thermostat, adding insulation to the attic, or sealing air leaks. For those looking to take energy conservation to the next level, many contractors are encouraging the installation of a combination geothermal heat pump and solar energy system.

“Other than the high upfront cost, it’s difficult to find any disadvantages to installing a geothermal/solar system,” said Rob Derksen, co-owner of Michigan Energy Services in Whitmore Lake, Michigan. “Since geothermal systems run on electricity, the solar array offsets the need to draw from grid power. In addition, by installing a solar array, homeowners can essentially pre-purchase their future electrical needs at today’s cost.”

SIZE IT RIGHT

Derksen is a Hydron Module dealer and has been installing geothermal systems since 1994. He’s been involved with about eight to 10 geothermal/solar installations, although he is certain that many more clients have added solar panels after living with their geothermal system for awhile. “Since a combination system is a significant investment, many clients may choose to add the geothermal system first in order to immediately reduce their heating and cooling costs. Once they have a little more history on their actual electrical usage, they may then choose to invest in a solar photovoltaic (PV) system.”

That is actually a smart idea, noted John Love, president of Love’s Heating And Air Inc. in Severn, Maryland. Love, who is a WaterFurnace Intl. Inc. dealer, believes if a customer is not going to install both systems at once, it is preferable to install the geothermal system before the solar PV system. “Too often, people make the mistake of covering their homes with solar panels before they call us. We regularly see homes that have a 10-kW PV system when they need much less energy after we install geothermal. Then they have a ton of excess power they don’t get reimbursed for, which is a waste of money.”

Love started installing geothermal systems about 15 years ago and added solar energy systems seven years ago. “Our main goal is to help people obtain net-zero-energy status. When we install a geothermal system, on average, it saves 50-55 percent of the customer’s energy costs. Then, we size the solar PV system to cover the remaining 50 percent of the utility bill. If we install a 4-ton geothermal system, most people in this area can get by with a 5- to 6-kW PV system and become net-zero.”

Of course, becoming net-zero has a high price tag — sometimes into the high five figures — but, often, these customers are concerned about the environment and just want to be green. “The typical cost of a geothermal/solar system is just under $100,000, and the payback isn’t great in our area,” said Alan Givens, CEO of Parrish Services Inc. in Manassas, Virginia. “Unless you are in a co-op, the utilities here do not buy back the extra power. Any extra power you generate, you are giving to the utility company for free.”

It’s often true that geothermal/solar customers care less about payback and are more interested in being self-sufficient and on the cutting-edge of energy efficiency, said Colin Wunder, president of Howard Heating & Plumbing Inc. in Howard, South Dakota. “But that’s starting to change as more contractors understand the concept and the system design.”

DESIGN CONSIDERATIONS

To that end, a geothermal/solar system starts as all HVAC projects should, with the calculation of the building’s design loss/gain and the selection of the geothermal heat pump to cover those loads, said Wunder. “Then you have to figure out the amount of geo-exchange loops needed as well as the solar fraction availability at the project’s location. Then there are associated considerations, such as fluid coolers or other intermediary heat source/sink elements, and the intermediary, latent-fusion-capable thermal battery.”

Designing a geothermal system is almost always more complicated than designing a traditional air-source system, because there are so many additional factors to think about, said Givens. “You need to consider how to make the connection between the loop and earth; what type of grout or backfill is going to be used; how problems can be isolated decades later, if needed; how the system can be designed to reduce service costs; how to protect the site when drilling for wells, etc.”

Designing the solar PV system is relatively straightforward, said Derksen, because the amount of solar panels needed to produce a specific amount of electricity is easy to calculate. “First, customers need to decide if they want to offset all their electrical usage with solar or only a portion of it; this decision is usually made based on their budget. Second, does the local utility offer a net metering program, and are there any additional benefits or incentives available to customers? And third, how much roof space is available for the solar array, and does the orientation capture the maximum amount of sun appropriate for the application?”

Other issues to consider with a PV installation are making sure the roof and/or panels are not going to be damaged due to wind or ice, that there is proper service access to the panels, and that the system is installed correctly so as not to be an electrical safety hazard, noted Givens. “It is also important to make sure the roof is in good shape, and, if it’s not, it should be replaced before installing the solar panels.”

WHAT THE FUTURE HOLDS

While combination geothermal/solar systems still comprise a small number of installations, there are fears that when the tax credits for geothermal expire at the end of the year, interest will dry up completely. “I think that will all but kill these installations in Virginia and any other state that does not offer incentives,” said Givens. “We will keep offering them, but I expect sales to drop by as much as 90 percent.”

Derksen also expects sales to soften after the tax credits expire, but he does not think that will last for long. “We are seeing a shift in our society, albeit slow, in a turn away from dependency on delivered energy and a desire to harness the energy that is below our feet and above us. Geothermal and solar energy will eventually be adopted into the mainstream of home construction and renovation due to policies that favor the environment and the concern over climate change as well as the cost of fossil fuels. Right now, the cost for fossil fuels is relatively low, but it is only a matter of time until we see these prices rising again.”

Love agrees with that assessment, noting that sales of geothermal/solar systems will probably slow for a little while after the tax credit expires. “People will need to get over the pain of losing the tax credit, but I don’t think it’s going to be much of an issue after six months. With the cost of energy going up, it will make more and more sense to install these systems, especially in new homes.”

Still, given that the solar tax credit was recently extended, Love would like to see the geothermal tax credit extended, as well. “What would really help is if we could get Maryland to treat the installation of the geothermal well field as a tax assessment, and homeowners could pay toward that cost for 20 or 30 years. But, short of that, I would encourage everyone reading this article to contact their congressperson to see if we can get the geothermal tax credit extended. That would help us all out a lot.”

Trenton H. Cotney

Florida Bar Certified Construction Lawyer

Trent Cotney, P.A. 

407 N. Howard Avenue

Suite 100

Tampa, FL 33606

www.trentcotney.com