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We may soon hear a great deal more about geothermal heating and cooling systems than ever before. For the people working in this part of our business, the ups and downs of the last decade can only be described as a roller coaster ride.
Ground-source systems are nearly carbon-free and have a long history of proven performance. In 2013, the U.S. Environmental Protection Agency described ground-source heat pumps as the most energy-efficient, environmentally clean, and cost-effective space-conditioning systems available.
People who have installed them in homes and buildings describe geothermal as the Rolls Royce of conditioning systems, partly because they are costly at the front end and also they are sometimes coupled with radiant delivery, which results in a comfortable, luxurious indoor feeling.
Geothermal is an excellent low-carbon, low-operating-cost solution with an attractive return on investment, but adoption has been difficult because we can’t seem to get past the upfront outlay. Growth has thus been seen as disappointing, even though about 60,000 systems are added in the U.S. annually — a total of more than one million have been installed in the last few decades. Single-home systems can cost tens of thousands of dollars, but the good news is that this may finally be changing.
Sales have surged whenever governments have stepped up and offered strong cash incentives to make it easier to swallow the install cost. Unfortunately, it is difficult to get an incentive budget to go very far when it comes to geothermal.
In addition, being a low-carbon technology, it has been actively discouraged by entrenched interests. Geothermal was eligible for the 30 percent clean energy tax credit, then it wasn’t (industry outcry) and now it is again. Political football.
But the world is changing. Public opinion polls by Yale University indicate that Americans of all political stripes are more concerned about climate breakdown than ever before. Geothermal was reinstated in federal clean energy tax credits in early 2018.
Cities are Phasing Out Fossil Fuels
Also, cities and states are moving aggressively, setting ambitious targets, especially in the areas of clean building systems and power generation. And more than ever the talk is being followed by concrete legislated action in the form of codes, regulations and standards. The most progressive jurisdictions are planning to eliminate almost all fossil-fuel use within a few decades.
In North America, the most proactive cities include Austin, Texas; Boston; Boulder, Colo.; Chicago; Houston; Los Angeles; Minneapolis; New Orleans, La.; New York City; Portland, Ore.; Philadelphia; San Francisco; San Jose, Calif.; Santa Monica, Calif.; Seattle; Washington; and the Canadian cities of Toronto, Vancouver and Montreal.
Whereas California and Massachusetts led a half dozen green states for years, this has very recently become a couple of dozen states. New York State has suddenly surged ahead of everyone with the help of New York City, which has passed a handful of aggressive bills in the past few months.
Collectively called the Climate Mobilization Act, New York City bill includes one mandating steep cuts to greenhouse gases, with brutal fines for noncompliance. It will require landlords to retrofit buildings with new windows, heating systems and insulation to reduce emissions by 40 percent by 2030 and double this amount by 2050. The measure is expected to create more than 3,600 jobs each year in construction and 4,400 jobs in maintenance, services and operations.
Based on existing proven clean energy options, we can expect this to mean significantly accelerated penetration for ground-source and air-source heat pumps, along with building standards such as passive house, which usually includes an energy recovery ventilator, high insulation R-values and triple-pane windows.
Another New York City bill creates a renewable energy loan program. Two more require some buildings to cover roofs with vegetation, solar panels or small wind turbines. Another one orders the city to study the closing of all 24 oil- and gas-burning power plants within the city limits, replacing them with renewables and batteries.
Based on the known case studies out there, modern-day renewables-plus-batteries will easily win that one on economic grounds. Some observers think New York’s action will motivate other U.S. cities to follow suit.
New York State
Meanwhile, the New York State Energy Research and Development Authority (NYSERDA) is presiding over some unusual events in Westchester County and additional statewide sustainability initiatives. It’s been a long struggle for Bill Nowak of New York Geo, the geothermal installers association. Finally, last December, Governor Andrew Cuomo and the Public Service Commission adopted a new energy-efficiency program, requiring utilities to install some 83,000 heat pump systems in the next five years.
In February of this year, NYSERDA increased incentive funding for qualified ground-source heat pump systems. Rebates are available of $1,200/ton for systems 10 tons and greater, and $1,500/ton for systems less than 10 tons.
In Westchester County in March, local utility Con Edison made good on an earlier threat and declared a five-year moratorium on new gas-service hookups in an attempt to face down officials who supported adverse public reactions to more proposed gas pipelines by not approving them. After the moratorium was declared, the state called the bluff and started seriously beefing up alternative HVAC incentive programs. NYSERDA made $26.5 million available for geothermal homeowner rebates.
Funds also have appeared for workforce development, according to Ryan Dougherty of Geothermal Energy Options, the trade group representing manufacturers of ground-source heat pumps and related equipment.
“Unions, manufacturers, colleges —it’s all hands on deck,” Dougherty said. “We are working with the International Ground Source Heat Pump Association on classroom training and online courses for installers, designers, inspectors, train-the-trainer, accreditation programs — and a lot more. We need to scale up very quickly.”
Dougherty points out that the expected five-year ramp up in Westchester County alone exceeds the current total shipment of ground-source heat pumps for the entire country.
Since the incentives were announced, the geothermal industry has also been winning rate case reviews in New York State that prove geothermal customers are being overcharged for electricity because the savings they contribute to the grid are not reflected in the existing rate structure.
Overcharges were shown to range from $375 to $827 annually, depending on the utility involved. The same process found that over their 15-year life span, air-source heat pumps reduce greenhouse gas compared with gas furnaces by 6.7 tons. For ground source, it is a 25-year life span and a 9.7-ton reduction. As a result of the hearings, Con Edison has cut electricity rates to geothermal customers in the region.
Other northeast states are moving in the same direction — Vermont, Maine and, of course, Massachusetts, which has a generous program similar to New York’s.
Installers Reduce Costs
While all this has been going on, the industry itself has been reducing the cost of geothermal systems.
In July 2017, a company called Dandelion set up shop in New York and, in early 2019, it raised about 16 million dollars in a venture capital round. Dandelion is a “moonshot” initiative by Alphabet Inc., owner of Google, which hopes to significantly increase penetration of geothermal, using New York State as a test market.
Its main strategic tools are to reduce the total cost of a system and to offer financing packages. It’s similar to the way rooftop solar financing projects have been sweeping across the United States. The founders of Dandelion are some of the same people behind Solar City, a big part of the solar rooftop movement.
The company describes two geothermal options, using a 2,500-sq.-ft. New York Victorian-era home as an example. One option is to buy the system outright, which the company says would cost $11,433 after tax credits and rebates. The other is to finance it over 20 years at about $135 per month.
If the house was currently using an oil furnace, the outright purchase option would mean the cleaner new system pays for itself in about four years, says the company. It quotes a yearly operating cost of $950 compared with $3,033 using oil.
Dandelion installs vertical closed-loop systems and is developing its own drilling technology that employs a special sonic drill and a methodology to avoid costly casing in most situations. With its equipment partner AAON Heating and Cooling Products, it has developed and supplied its own heat pump, adding and subtracting features to ensure affordability and a durable business model.
It’s a basic dual-capacity, two-stage set-up but it includes a filter rack and flow station integrated inside the cabinet, and Wi-Fi (cellular backup) on every machine. Its onboard sensor package includes monitoring of flows on the air side and ground side, power usage, plus refrigeration circuit pressures and temperatures.
“There are so many powerful things you can do with the data. It’s like we’re continuously commissioning the system,” said Ryan Carda, Dandelion’s principal engineer. “When there’s an alert, an email is automatically generated for the service team and provides useful information for the technician. We’re working hard to standardize our installation model, our work scope, materials and training so we can efficiently install each system and complete the proper documentation.”
“Once we’ve refined our process, we hope for widespread awareness, growth and adoption, resulting in a mass shift to environmentally friendly systems that are healthier for families and better for pocketbooks,” Carda continued.
In response to the appearance of Dandelion, nine installers and manufacturers in New York State joined together January 2018 to offer a less expensive geothermal package, which is competitive with the Dandelion offering.
New Retrofit Tech for Chicago Commercial Buildings
In the past, a geothermal retrofit for a city building has been a nonstarter. It has been difficult or impossible to drill boreholes for buildings that often cover an entire lot, more or less. But trailblazing entrepreneur Scott Adelsbach of Chicagoland Geothermal in Glen Ellyn, Ill., has developed a technical solution to make retrofits for small urban buildings viable. His company will complete about 50 projects in the Chicago area this year.
He has created a drill rig that can be inserted through a window or opening measuring 30 inches by 24 inches and is connected to a hydraulic power unit, which remains outside. When operating, it stands about 7 feet in height. The “Rig in a Box” system, with tooling and mud pans, fits into an enclosed 12-foot trailer that can be pulled by a pickup truck. His crew can arrive at the site, set up in a basement or underground parking lot and be drilling within three hours.
Chicagoland Geothermal also has shown it can provide effective heating and cooling systems with boreholes of just 100 feet in depth, spaced about 8 feet apart with 4-inch HDPE tubing. They do 3-hole series, connected to one copper manifold and isolation valve per triplet.
“We can do a building with an average heating load, in its own footprint, up to 8 stories in height,” Adelsbach said. The system is coupled with traditional ground-source heat pumps or variable refrigerant flow (VRF) machines.
“There are a lot of advantages when drilling in basements,” Adelsbach explained. “It’s a temperate environment, so you don’t need much insulation or glycol.”
The company usually doesn’t do casings.
can leave a manifold exposed, you’re getting exceptional performance. And we are. The in-out temperature differential is about 10 or 12 degrees,” Adelsbach said.
Chicagoland Geothermal is working on some new construction projects but undertaking them, in a way, like retrofits.
“We wait for the first-floor deck to be completed, then we go in under it and start work,” Adelsbach said. “That way, we’re safe from anything falling, there are no weather delays and we’re not affecting the schedule because we’re working during construction.”
The installing firm recently completed a 60-unit building in Chicago; it is now working on two nearby 90-unit buildings.
“We’re also working with a gentleman who guts detached houses, digs out the basements and wants clean energy upgrades,” Adelsbach added.
Adelsbach built the original machine in his garage, secured a patent and is now setting up a plant to manufacture and sell the Rig in a Box. He’s happy to take calls from aspiring geo retrofitters.
So, the roller coaster ride for the geothermal industry continues. Right now, it seems to be on the upswing. Will it continue? This time it just might.