Get all the news you need about Smart Buildings with the Memoori newsletter
Geothermal heating reduces carbon emissions, energy costs, and dependence on fossil fuels, and has become a standard in many parts of the world. The US lags behind, however, with geothermal having to fight for the federal incentive “scraps” that solar and wind power have only recently recovered. New developments and a renewed sense of optimism suggest the US is on the verge of a geothermal renaissance in the coming years.
Geothermal heating systems access heat retained within the Earth since the original formation of the planet, through the process of radioactive decay, as well as from absorbed solar energy. While electricity-generating geothermal power plants need high-temperatures that are only economically feasible to access in areas where volcanic activity occurs near the surface, geothermal heating, in contrast, is available almost everywhere.
Even during cold winters, undisturbed ground below six meters maintains the area’s mean annual air temperature, and that heat may be extracted with a heat pump. During hot summers, the relatively cooler ground temperature during the winter months means that the system can be reversed to provide cooling. In nature, many animals and plants utilize the seasonal temperature balancing effect of the ground, digging and burrowing to create a warmer or cooler environment, giving geothermal an appealing hint of bio-mimicry.
We have been utilizing geothermal heat for millions of years, long before the emergence of homo-sapiens, by bathing in natural geothermally heated hot-springs. The first recorded commercialization of geothermal heat came about during the Roman conquests of what is now England. After seizing ‘Aquae Sulis’ (now known as Bath, Somerset), roman engineers channeled the hot spring water to feed paid public baths and underfloor heating for those who could afford it. This was a precursor to geothermal district heating systems that are now found in more than 70 countries around the world.
“There are some countries, Sweden being one, where [geothermal heating] is mandatory; they’ve completely eliminated oil,” said Kyle Murray, business development director, Bosch Thermotechnology Corp. who is buoyant about the the development of geothermal heating in the US despite a lack of support from the federal government, and in the very promising yet smaller Canadian market.
“In the U.S. and Canada, the market will continue to grow because of interest from homeowners and developers, as well as utilities and states. Even though our [federal] government has decided not to, there are still a number of states committed to hitting climate goals: Vermont, New York, California. All the public utilities are looking at encouraging air-source and water-source heat pumps, because they see the future,” Murray added.
In 2018, stong lobbying efforts got the federal geothermal tax credits reinstated. However, the unreliable, stop-start, nature of the tax credits allowance means the US geothermal industry is years behind what is should be and many blame poor federal strategies. The US government first issued the tax credit for geothermal in 2008, just at the start of a major economic crisis that meant few new properties were being built, severely limiting growth in the geothermal market. Just as the housing market was getting back on its feet, in 2012, the tax credit was removed.
“We were starting to see some light at the end of the tunnel, and then our tax credits go away. It’s going to take the full four years that we have them — ’18, ’19, ’20, ’21 — to get back to where we were in 2016,” said Doug Dougherty, president and CEO of the Geothermal Exchange Organization (GEO), who played a major role in the lobbying efforts. Dougherty is still trying to understand why green and efficient geothermal is having to fight so hard for a fair deal.
“From my perspective as running a national trade association, if competing industries are receiving a tax credit, we should be in the same boat. That was our argument to the Republicans: You pick winners and losers, and you [demonstrate] to homeowners and to Wall Street that the federal government likes wind and solar and nothing else. That’s the wrong optics. You’re never going to win the market with that. Everyone else has tax credits, including the fossil fuel industry, which has billions more than we have. We will fight to have parity with how the tax code is applied,” Dougherty points out in an interview with ArchrNews.
The reinstatement of the tax credits, more than anything, put installer and distributor confidence back into the industry, according to Steve Smith, CEO of Enertech Global LLC. Smith suggests that the awareness of geothermal heat pumps will continue to grow due to the demand for more energy-efficient, green technologies. Despite policy failures, the reinstated tax credit gives the geothermal sector a timely boost, in a decent housing market, so the industry can prove that it can stand on its own feet.
“Now, it’s our time to demonstrate that geothermal heat pumps make sense, even without a tax credit,” Smith said. “Home and building owners recognize there are more benefits to geothermal heat pumps than cost savings, like superior comfort, cleaner air, no outdoor unit, low maintenance, most environmentally friendly, etc. Additionally, from a bigger perspective, there’s a rise in all-geothermal neighborhoods for both residential and commercial, which demonstrates it can be installed at scale and be profitable for developers.”
The initial cost of installing a geothermal system in a single home is prohibitive, so the growth of the geothermal market is highly dependent on large-scale property developers. Only developers can mandate geothermal energy and have the drilling done upfront. Homeowners can then lease access to the loop from the land developer or a utility, creating a steady stream of income for the system operator and reduced costs for the end-user.
In Whisper Valley, Texas, a 7000+ home development created a “Geo-Grid” through a main loop offering connections to each household, thereby providing affordable heating in winter and cooling in the hot Texas summer. “People are reporting utility bills that are sometimes $5 a month, and that’s in Austin, where in the summertime, it’s 100°F,” says Murray of Bosch, who provided equipment for the Whisper Valley project.
Dougherty of GEO believes that the same system may be applicable to much smaller scale projects too. “The large-scale guys have it figured out; now, it’s the trickle-down. We’re trying to convince small subdivision developers to say ‘Hey, we’ve got 30 homes, let’s put a common loop in … tie it in and own the loop.’” he said. “The utilities — the gas and electric — haven’t really gotten behind the model. “They understand they could be providing geothermal, like gas and electricity. Their concern is the validation of the model, because there has not been a lot of work done.”
There are more than 135 million homes in the US alone but geothermal only accounts for 1.7% of the heating and cooling market. Geothermal offers an ideal green and cost-effective solution to heat and cooling, yet is little known to US homeowners. In this age of environmentally responsible efficiency, geothermal should already be a leading form of heating and cooling in modern residential and commercial buildings.
“Demand for geothermal is healthy around the globe, but we certainly have a lot of headroom to grow — especially in North America,” said Tim Litton, director of marketing communications, WaterFurnace Intl. “Energy efficiency isn’t just a fad,” he said. “It’s now part of the fabric of our culture, and younger generations have never known any different.