Why go geothermal? Last year my wife, Cassie, and I were doing a major renovation and add-on to our house, and we had to replace the existing HVAC system anyway. We realized that with the 30% federal tax credit for installing a geothermal system, the cost for geothermal would be the same as for a high-efficiency conventional system. Plus, the long-term savings were obvious.
How much did the system cost? It was $130,000, including $90,000 for the hardware and $40,000 to put in wells. Deduct the 30% tax credit and the net cost was $91,000. The $90,000 hardware price included two water heaters. We also put in three tankless water heaters, each with a tax credit, making our hot-water supply endless and dirt-cheap.
Wow, that's a lot of money. Yes, but our renovated house is large: 9,000 square feet. Our system is more than four times larger than the typical system. Also, we drilled down, doing a "vertical" loop, instead of a more shallow "horizontal" loop, adding $40,000 to the cost. A typical system for an average home is about $20,000 to $35,000 before the tax credit.
How much are you saving? We doubled the size of our house, but our energy bill hasn't changed. We run the system for both heating and cooling. An added benefit is that heat also goes into the water heaters and lowers our water-heating cost.
When do you expect to make back your investment? In about 12 years through energy savings of $600 per month. Typically, these systems pay back in ten to 12 years, our contractor says. And after that, it's like receiving free energy.
Do you see geothermal systems appealing to a mass audience? Good group decisions start with good individual decisions. For us, this was a good decision because we get the financial benefit, we use less energy and we pollute less.
Who should install a geothermal system? It makes sense for new construction and major renovations.
Do you plan on staying in your home for a long time? I'm 39, and my next house will be the nursing home.