Sunday - January 13, 2001: Contractors, Don’t Overbid On Geothermal Projects

ATLANTIC CITY, NJ — It seems hvac contractors are still a little unsure how much of a margin of error to allow themselves when they bid on geothermal (ground-source or water-source) heat pump projects, according to Steven Bauman, a project consultant for New Jersey electric utilities “We need to educate contractors so that they don’t bid these projects too high,” he said. The technology really isn’t that complicated. “There’s nothing in there that’s gonna bite them.” Bauman and others spoke on the topic of utility promotions of geothermal systems. There are several good reasons for utilities to do so. Bauman cited:

  • An increase in the customer base during heating season;
  • Better use of the utility’s infrastructure in cooling season, preventing brownouts and blackouts; and
  • Improvement of the utility’s load profile year round.
  • Moreover, “Customers like the technology,” he said. And why shouldn’t they? Bauman cited potential air conditioning savings of up to 47% of the kW load; and heating efficiency that is potentially 10 times more efficient (when replacing a 40% to 60% efficient boiler with 4.0-COP open-loop GSHP system).

    Customers like the idea that they:

  • Can save money through reduced operating costs;
  • Don’t need to store fossil fuels on their property (often a concern for residential customers);
  • Will have easier systems to maintain (especially commercial-industrial customers);
  • Can have thermostats in individual classrooms (for schools);
  • Don’t need a cooling tower or rooftop units (aesthetic preferences);
  • Don’t need to protect equipment outdoors from the elements or vandalism;
  • Can free up some space indoors (no boiler); and
  • Can have the benefits of using a green technology.
  • REBATES AND SHOW BUSINESS Utility rebates are still quite useful to promote the technology, said Bauman, because the rebates can go a long way toward offsetting the typically substantial first cost.

    Bauman also recommended that parties interested in promoting the technology throw in a bit of Ed McMahon showmanship, in the form of large novelty checks for the first rebate (for commercial projects), presented at upbeat public events with a lot of publicity.

    He also recommended that utilities form partnerships with the design and installation trades, and that they promote geothermal technologies with something like tabletop presentations at local professional meetings.

    And don’t neglect the impact of tours and field demonstrations for end-users and professional trade partners, as well as joint training programs.


    The best market for geothermal, said Bauman, is an expanding school market. In order for such projects to be accepted, “You need a receptive architectural and engineering firms,” he said. A successful project also needs proven loop designers and installers, he continued. And remember to choose your drillers carefully. Don’t hire a water well driller who doesn’t also have specific experience with these projects. For example, he said, the grouting is different; applying it successfully requires experience.

    Finally, “Look for a favorable geology.” Areas with caves, for example, are not good choices. Neither are areas that contain hazardous materials, which should not be disturbed. “Some things you can control, others you can’t,” he said. Geology falls into the latter category.

    Publication date: 01/14/2002

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