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DECISION FACTORS: Cost savings over time and system longevity and reliability were listed by the vast majority of homeowners in a recent survey when asked what factors they would consider when deciding whether to have geothermal HVAC installed. Ease of maintenance and compatibility with existing HVAC infrastructure were also rated highly. (Courtesy of myCLEARopinion)

Geothermal experts say it’s no surprise that respondents favored geothermal’s long-term savings over other factors.

“Saving money in the longer term is the driver for geothermal choice, while the environment may be considered as a byproduct of the technology,” said Tim Wright, chief operating officer at Enertech Global, a manufacturer of ground-source heat pumps and other geothermal equipment.

The survey of 124 homeowners was done by myCLEARopinion, a business research firm and part of BNP Media Inc., parent company of The ACHR NEWS. Residential contractors, commercial contractors, commercial facilities managers, and building owners were also asked about their experiences as part of the extensive survey about different facets of the geothermal industry.

Overcoming Sticker Shock

In the residential chapter of the survey, the high upfront cost of a geothermal system was at the top of the list of concerns homeowners had about going geothermal, with 87% of respondents reporting that would be an issue for them.

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COST A HIGH BARRIER: The high initial cost was by far the most-cited issue when homeowners were asked in a recent survey about what concerns they had about switching to a geothermal HVAC system. (Courtesy of myCLEARopinion)

Experts acknowledge that sticker shock is a barrier for many people debating whether to invest in a geothermal system.

“That upfront cost is definitely the number-one thing that puts people on the fence, and getting them over that hurdle is probably the biggest challenge,” said Chris Ellis, president of Comfortworks Inc., a residential and commercial geothermal contracting firm in Oklahoma City, Oklahoma. “A lot of people will just go for it, but there are a lot that will just say, ‘That’s too much upfront.’”

MONEY MATTERS: In a recent survey, the high upfront cost of a geothermal system was at the top of the list of concerns homeowners had about going geothermal; 87% of respondents reporting that would be an issue for them. (Courtesy of Enertech Global)

Contractors can reinforce the energy and utility bill savings that can be achieved with geothermal systems, plus the incentives in place for residential geothermal, in trying to overcome potential customers’ sticker shock, experts said.

“Climate Control Group advises contractors to emphasize the long-term financial benefits of geothermal systems, including significant energy savings and increased property value,” said Joe Parsons, sustainability marketing manager at Climate Control Group Inc., which includes ClimateMaster, another geothermal manufacturer.

“Energy savings ... more than make up for the added cost of the incremental system differential vs. a comparative high-efficiency system,” said Wright.

Comfortworks plans and installs residential geothermal systems in both new construction and existing homes, in which more traditional heating and cooling equipment is typically being replaced. After incentives, Ellis said, the cost of a geothermal retrofit in a 2,000-square-foot house comes to roughly $4,000 more than a traditional system, and with energy savings of just under $2,000 a year, that difference is made up at about the two-and-a-half-year mark.

Climate Control Group has a number of resources to help contractors and homeowners quantify the financial benefits of a geothermal system, including a calculator that estimates a system’s potential for energy savings and a tool that searches for incentives by ZIP code. Enertech has similar resources for looking up incentives, and partnered recently with a national lender to offer a variety of loan options, from 12-month same-as-cash loans to 12-year loans.

The expected lifespan of the equipment is another selling point that translates into dollars saved.

“Geothermal systems — 25 to 30 years is a very realistic expectation of the equipment life itself, whereas conventional (systems) are … closer to 15 years,” Ellis said.

“Double equipment lifecycle saves time and money month after month,” Wright said.

Researching Geothermal

Survey respondents reported a fair degree of familiarity with geothermal systems, with 60% saying that they had some knowledge of them, 10% saying they were extremely knowledgeable or familiar, and 30% saying they’d heard of geothermal but had no knowledge of or familiarity with it.

Some 24% said they had family or friends with geothermal HVAC, a figure that surprised Parsons. “That is indicative of the increased awareness and market growth,” he said, adding that his records say that number was less than 10% a decade ago.

Parsons and Ellis said that, in their experience, many homeowners approach geothermal having already done some research, and primed to be convinced that it would be the right thing. Contractors have a role to play there, they said.

The vast majority of respondents, 90%, said they’d seek information from professional HVAC contractors or installers if they were seeking information about geothermal. Other sources high on the list were internet search engines (77%) and manufacturer websites (62%).

“Over 80% of residential GSHP (ground-source heat pump) purchase decisions, including brand choice, are made before the first call to a contractor. The contractor must understand this dynamic before starting at square one, as often the homeowner is simply looking for assurance that they are making the right choice,” said Parsons. “Carefully describe the installation process and create a realistic expectation for geothermal ownership.”

“Honest and up-front information with a good design, then showing that operating-cost analysis and the amount of years it’s going to pay them back,” Ellis said. “That right there ... that’s their selling point.”

The survey also revealed:

• Only about 2% of respondents actually had a geothermal system, while 57% said they had never considered one, and 40% said they had considered one.
• Some 62% said they expected a one- to two-week installation time, an expectation Wright called overly optimistic. Contractors should communicate clearly on this point, he said.
• “Weather and scheduling other subtrades (driller etc.) can extend this time frame,” Wright said. “Communication is key for a system that will last for 20-plus years. It’s worth the time, effort, and patience.”
• Only about 8% said they were extremely familiar or very familiar with tax incentives and rebates for geothermal systems. A plurality of respondents, 40%, said they were not very familiar with incentives, 27% said they were somewhat familiar, and 26% said they were not at all familiar.