HVAC Residential Market / Geothermal Heat Pumps

Geothermal Industry Striving for Inclusion

Leaders Work for Federal Definition by End of 2014

September 1, 2014
Trans

For several years, the Geothermal Exchange Organization (GEO) and several geothermal manufacturers have been working to include geothermal heat pumps (GHPs) in the federal definition of clean energy, and they are hoping this could be the year it finally happens. After receiving support on both sides of Congress, GEO president and CEO Doug Dougherty said GEO is optimistic it can accomplish that goal this year.

“The unfortunate reality is that Congress has not been able to pass any energy bill in that time, so we patiently wait for an alternative vehicle that suits our goal,” Dougherty said. “The good news is that GEO’s hard work on the Hill has produced an agreed-to amendment for the Shaheen-Portman energy-efficiency bill in the Senate that had bipartisan support and no opposition by energy committee members. We also worked on the House side and have a bipartisan bill ready to be introduced that is supported by members of the House Energy Committee.”

Steve Smith, president and CEO, Enertech Global LLC, said geothermal systems are the “unseen heroes” as opposed to their more visible solar and wind counterparts, which are very visible in open space rather than being buried underground. This is part of the geothermal industry’s uphill battle.

“People see an array of solar panels or the field of towers for wind turbines that frame their minds of what they believe renewable to be,” Smith said. “Both are very important to our long-term energy independence goals. However, the most important source of renewable energy available to everyone today is geothermal heating and cooling, which we tend to forget is a very important renewable source, even though we are not generating electricity and sending it back to the grid. We are doing one better, we are generating energy to use on site, eliminating the need for transmission lines to send energy elsewhere. It is like having a power plant in your own backyard.”

Earning that distinction is important for geothermal systems as utilities grow to have requirements regarding renewable energy and carbon emissions, said Bob Ingersoll, director, International Ground-Source Heat Pump Association (IGSHPA).

“Geothermal is renewable and reduces carbon emissions,” Ingersoll said. “Geothermal getting classified as a renewable energy source gives utilities the ability to sell ground-source heat pumps as a benefit to the utilities’ end users. For the homeowner, geothermal being classified as a renewable energy source is a sense of well-being and future cost-savings as future costs associated with carbon emissions will eventually be passed on to the consumer in the rate structure.”

Tom Huntington, CEO, WaterFurnace Intl. Inc., noted progress at the national level could spur helpful progress elsewhere.

“Getting GHPs defined as a renewable technology at the federal level is important because federal recognition is an important step towards getting our products included in the renewable portfolio standards (RPS) initiatives at the state level. It would also make GHPs eligible for renewable energy credits in governmental installations.”

Raj Hiremath, director of marketing, ClimateMaster Inc., said geothermal has already been classified as a renewable energy source and as a result qualifies for 30 percent uncapped federal tax credit. “Space cooling, heating, and hot water are major sources of energy use. Using the energy from the ground instead of using energy from the grid or in an oil well significantly reduces energy bills. It’s a win-win for everyone involved.”

States Still Coming

As Huntington mentioned, the battle isn’t only at the federal level. The industry is working to get GHPs accepted at the state level, as well, with varying degrees of success.

“In the long term, GEO seeks recognition of GHPs as a renewable energy source by the 40 or so states that have renewable portfolio standards,” Dougherty said. “Using the example of a revised federal definition of renewable energy that includes GHPs would help secure that goal at the state level. This would further propel broader public recognition and installations of GHPs. We’ve already accomplished this change to RPS mandates in Maryland and New Hampshire and are very close in Arizona and Massachusetts. There are similar efforts underway in another dozen states that GEO is involved with.”

This process, however, is easier said than done. Although Dougherty hopes the federal definition changes this year, GEO’s efforts in individual states will be ongoing “for quite some time.”

Hiremath and ClimateMaster support the work GEO has done at the state level. “GEO is focusing on lawmakers in key states to ensure geothermal heat pumps are on their minds and in their laws and policies,” he said.

Every state has different policies and definitions, as well as varying activity levels and energy needs. Smith noted some states are active and others are struggling to define the future of their energy needs.

“Statewide geothermal organizations, in concert with GEO, allow us the opportunity to work with states to include geothermal systems in the language of their renewable energy portfolio,” Smith said. “States also regulate electric utilities and allow geothermal systems as part of the utility’s renewable plan, which is critical to our success in reaching the masses.”

Long-term Future

Dougherty said that even though getting GHPs included in the federal definition of renewable energy is one of GEO’s major issues, its efforts at the state level will not be deterred by a lack of recognition at the federal level.

“Granted, a revised federal definition would help us make our case, but, with or without that advantage, we are still moving forward at the state level,” Dougherty said.

Hiremath said ClimateMaster’s efforts to get the tax credit extended through 2016 has helped significantly drive the adoption of geothermal in the U.S. “While this is a good start, we need to continue this momentum,” he said. “Federal and state governments play a large role in ensuring such renewable energy sources get to a critical scale.”

Ingersoll noted that changing the federal definition will impact not only manufacturers, but also contractors and homeowners.

“When geothermal becomes recognized as a renewable energy source on the federal level, the geothermal industry will be able to add another reason why to purchase a ground-source heat pump system when talking to consumers who are unfamiliar with the technology,” he said. “This is in addition to the efficiency, reliability, economical, and comfort benefits a geothermal system provides.”

Smith said geothermal systems have earned, and long deserved, a seat at the table for the nation’s energy independence plan. He believes that when the definition is included, it will open up many new opportunities for everyone involved in the geothermal industry.

“To be recognized as the renewable energy source that we are would give home and business owners a much better opportunity to learn more about what a geothermal system can do for them and our energy future,” Smith said.

“Another big hurdle is consumer education and knowledge, and being given the status of renewable energy at the federal and state levels would heighten awareness across the nation. When a home or business owner clearly understands the choices they have available to them, a geothermal system that provides renewable energy all day, every day will become the preferred system in most cases. The penetration of geothermal systems is barely 2 percent of the heating and cooling market; this recognition could take us to unprecedented levels and interest like we have never seen before.”

Publication date: 9/1/2014

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