Veterans of the geothermal HVAC industry have long been asked what it’s going to take to provide enough traction for geothermal to stand on its own. As a 25-year-old mechanical design professional in Florida, I had several opportunities to share my opinions about this in the early ‘90s.
Canada had a good run with impressive incentives for geothermal systems, distributing more than $50 million in government subsidies between 2002 and 2010. The U.S. federal government provided geothermal incentives from 2009-2016 with 30 percent tax credits for eight years, which may be renewed, retroactively. With both of these programs, the sunset of incentives seemed to be the sunset of the interest in geothermal; but that’s not quite true.
In New York and other state and local jurisdictions, questions were asked in strategy sessions at the government level. With regard to implementation of geothermal HVAC technologies, a list of challenges needs to be addressed:
- Can it be done better?
- Can it be done cheaper?
- How do we control the quality of installs?
- Should it be infrastructure level?
- How do we properly educate consumers?
- How do we educate the professionals who design buildings?
What emerged is a robust geothermal program designed to address these challenges. The New York State Energy Research and Development Authority (NYSERDA) and its members listened to these issues and strategized with experts from around the U.S. The result launched a $15 million initiative to spur the ground-source heat pump market. Notice it is designed to “spur” the market. The program provides impressive rebates (not tax credits) of $1,500 per ton for residential and $1,200 per ton for commercial projects.
What consumers don’t necessarily see are the efforts going on simultaneously. Some of these programs include next-generation technology challenges, educational efforts, consumer outreach, localized communitywide geothermal implementation strategies, commercial challenges to implement large-scale systems; and social media programs.
It’s one thing when the government throws a 30 percent tax credit at an industry without a lot of quality controls. But, it’s quite another when a state, like New York, decides to pick up where they left off.
Here’s a short description of the differences:
The NYSERDA rebate goes only to contractors that meet strict quality assurance (QA) criteria. Then, there’s a probationary period in which a contractor is considered “provisional.” During this time, everything they install is under the microscope of NYSERDA’s careful and diligent scrutiny.
Beyond the QA process, NYSERDA has implemented the “NextGen” award program, a program from which proposals, if accepted, are funded to develop ideas to improve the geothermal HVAC process. Antifreeze Fluids and Drilling Technologies are both considerations with projects in place.
Geothermal fluids (antifreeze) have long been petroleum based. Some are flammable, some are dangerous to humans, and some are both. The safest is Propylene Glycol, which is OK for humans, but it’s rather viscous, especially at low temperatures. It’s also a bit unstable and can actually “go bad” after a while. So, a company that manufactures a food-safe non-petroleum-based glycol decided to get involved. They have put in a proposal to NYSERDA and are hoping that they can prove in New York what they have proven in their own labs in the U.K.
According to the published data, the product outperforms propylene glycol by a wide margin, and it even outperforms the non-food-safe ethylene glycols.
Kilfrost GEO has introduced this product, which is new to the U.S., and is investing considerable effort to prove its worth in New York and beyond. Pumping power is considered a parasitic load on geothermal systems, and there is considerable opportunity for energy savings, environmental safety, fluid safety, and equipment longevity.
Drilling technologies have been questioned time and again. While there have arguably been improvements in the technology, Dandelion Energy, the Alphabet X (formerly Google) geothermal spinoff, has been working the problem. They have also submitted a proposal to be part of the NYSERDA NextGen program. That means that any improvements to drilling technology may be available for others to implement in the near future, helping out the geothermal industry in a holistic way.
The NYSERDA program has been remarkably successful so far and is destined to be duplicated elsewhere in the U.S. and Canada.
For example, Ontario, Canada, has just announced its geothermal program. The program has similar quality control measures and rebates for qualified professionals to pass down to consumers. The program, funded by “GreenON” (Green-ONTARIO-Fund, an agency of the Government of Ontario), is conducted through the Independent Electricity System Operator (IESO) and managed through the Heating, Refrigeration and Air Conditioning Institute of Canada (HRAI). HRAI is a national trade association of manufacturers, wholesalers, and contractors in the Canadian HVACR industries. Like the collaboration between NYSERDA and the New York Geothermal Energy Organization (NY-GEO), this provincial program will likely sweep across the other provinces of Canada; let’s watch this one close.
Josh Kessler, program manager for the Massachusetts Clean Energy Center (MassCEC) announced an increase in its geothermal heat pump incentive.
This program provides state-funded rebates of up to $3,500 per ton for residential systems, and potentially up to $4,750 per ton for commercial systems (capped at $17,500 per home and $250,000 per building).
These incentives can be stacked with other incentives provided by the utility-run Massachusetts Save Heat Loan program. The heat loan offers homeowners zero-interest financing of up to $25,000 for seven years to make energy-efficient improvements.
These two incentives combined mean that customers can pay little or no money upfront to install their systems.
WHAT THIS MEANS FOR THE U.S.
All of this research and development is improving the geothermal industry as a whole, and, much like the way solar programs have been so successful, we will see geothermal programs gaining local and state government support with better code and quality enforcement.
The International Ground Source Heat Pump Association (IGSHPA) at Oklahoma State University developed the standards geothermal professionals have operated by for 30-plus years. These standards have been adopted by the International Association of Plumbing and Mechanical Officials (IAPMO) and are expected to be part of the 2018 regulations.
Publication date: 1/22/2018