Tax Credits Help Geothermal Gain Share of Market
Geothermal Market Grew 8 Percent in 2014
CHICAGO — The geothermal market is growing exponentially. According to data provided by Goncalo Costa, director of product management at Bosch Thermotechnology Corp., the market grew 8 percent in 2014. And, while the commercial side is seeing the greatest increase, the residential portion of the business is thriving, as well. Many manufacturers exhibited new products at the AHR Expo in Chicago, designed to fulfill the increasing market demand for geothermal comfort systems.
While the industry is enjoying the growth, many are focused on 2016, when the tax credits are set to expire. The existing tax credit grants a 30 percent incentive for residential projects and 10 percent for commercial projects.
“We have concerns about the tax credits expiring,” said Tim Litton, director of marketing communications at WaterFurnace Intl. Inc. “If they expire, they’ll have an effect on the industry, as the expiration of tax credits have done before. We are taking steps to minimize the effect. We do feel like it will help weed out some of the people who got involved in geothermal just because of the tax credits. The people who are not really committed to it will probably exit the market at that point.”
Eliminating the less committed contractors could have a positive impact on the industry, said Litton.
“When someone misapplies geothermal and there is a problem with the installation, consumers blame the technology and not the contractor. That gives the entire industry a black eye,” he said. “That is why we invest so much in contractor training. We don’t sell to just anyone with the money,” Litton said.
Costa believes if the tax credits do expire, the industry will see a little dip in 2017. But, he does not see that derailing long-term growth. “It will recover based on the drivers I mentioned,” Costa said. “We estimate a combined annual growth rate of 3.8 and 4.2 percent all the way through 2020.”
Most of the manufacturers at the AHR Expo have had great success getting schools to purchase geothermal.
“Schools are a great customer because the largest cost factor schools have are operating costs,” said Dick Hanna, director of product development for Bard Mfg. Co. Inc. “So, geothermal is a great help in that regard.”
WaterFurnace introduced the Aurora Universal Protocol Converter (UPC) on Versatec Base, Versatec Ultra, and Envision² Compact products. The Aurora UPC communicates with Aurora boards and converts the Modbus protocol to BACnet MS/TP, LON, or OpenN2 protocol. The module provides access to unit sensors, relay operations, and faults and allows individual unit configuration — all without the need to manually access the heat pump. A portable touchscreen interface gives a technician full access to equipment status, parameter values, temperatures, and humidity sensing, as well as access to alarm and trend history.
The controller includes an onboard CR2032 battery with a 10-year lifespan to provide 720 hours of cumulative power outage capacity.
GeoStar introduced the Sycamore Series geothermal comfort system, which combines a variable capacity compressor with a variable-speed blower motor and a variable-speed loop pump to provide energy-efficient comfort. The use of variable technology allows the unit to scale output to exactly the level needed, rather than running at one or two speeds.
Available in 3- to 5-ton capacities, the Sycamore Series achieves an EER of 41 and a COP of 5.3. The Sycamore’s variable-capacity compressor offers soft-start capabilities that eliminate light flicker and gently ramps up to speed for quiet operation, according to the company.
The new Aurora control board offers true two-way communication between components, intelligent operating logic, and powerful troubleshooting capabilities. The unit controls and monitors system conditions and can even determine when excess heat is available to route to the water heater. This option enables the Sycamore to generate supplemental hot water from energy that would otherwise be wasted.
A corrosion-resistant air coil increases equipment life while the coil’s large size improves efficiency and provides better dehumidification during cooling, according to the company.
Mars showcased its HZ Series two-stage geothermal heat pumps with two-way communicating controls. Variable-speed flow technology works with built-in water circulation components to vary the water flow according to current conditions, and eliminates the need for an external flow center. With a modulating valve for ground-water applications or a variable-speed pump for ground loops, the flow is automatically adjusted depending on source water temperature, full- or partial-load operation, and other conditions.
The two-stage compressor runs at partial capacity most of the time to maintain a consistent temperature/humidity level. When there’s demand, the unit instantly shifts to 100 percent capacity. The ECM variable-speed blower automatically adapts to system requirements. The HZ Series is designed for open-loop, closed-loop, and boiler/cooling tower applications.
Spreading the Word
“Geothermal growth has been driven by commercial jobs related to the renovation of high-rise buildings and hotels,” said Costa. “We think the growth on the residential side was driven by the economy, the housing market recovery, and the fact that employment and salaries are in a better situation. We also have seen some activity in utilities, which reduces first cost on the geothermal loop.”
Bosch announced it will conduct a wide-ranging public awareness and educational campaign in 2015 centered on further increasing awareness of geothermal technology and its environmental benefits.
The effort is designed to further understanding and acceptance of geothermal technology as an unlimited, renewable form of energy and serves to advance the industry and its dedicated stakeholders — equipment manufacturers, drillers, installing contractors, industry associations, residential home developers, and homeowners.
Bosch’s campaign will kick off on April 24, 2015 (Earth Day) with a dedicated website featuring information and activities relating to geothermal along with an educational video and interactive children’s activities. Tandem social media and public relations efforts will engage stakeholders and consumers on geothermal’s benefits in reducing carbon dependence and creating a cleaner, greener, more sustainable world of the future through widespread adoption of geothermal.
As part of National Energy Month, Bosch will also seek a congressional proclamation declaring Oct. 20 as National Geothermal Day.
Central to the campaign will be Bosch’s engagement with geothermal industry partners and stakeholders in support of its campaign through participation in campaign efforts and in-kind support.
“At Bosch, in keeping with a core value to advance environmentally friendly product solutions worldwide, we certainly do believe in geo, and we are committed to it,” said Richard Soper, president, Bosch. “We see geothermal as an essential form of renewable energy to bequeath to future generations. It’s especially important for this campaign to reach children of school age because they represent our future. We need to instill this awareness in them so they can make geothermal energy tomorrow’s reality.”
“The national geothermal campaign is really designed to bring geothermal to the forefront of attention when it comes to renewable energy,” added Kyle Murray, director of marketing for Bosch.
Bosch also showcased the SM Series. It has been upgraded to be compatible with a smart thermostat to allow consumers to control the HVAC system remotely.
Geothermal awareness and acceptance are growing, assisted by high energy prices, a rebounding housing market, and increasing consumer preference to reduce carbon dependence in one’s lifestyle. Municipalities are mandating geothermal in both new government buildings and new construction, but geothermal is yet to gain acceptance as a renewable form of energy in many states, limiting its tax credit eligibility. Stakeholders will continue pressing forward with geothermal acceptance at the state level and beyond.
Publication date: 2/23/2015