Geothermal Cost Savings and Benefits

Geothermal Cost Savings and Benefits

Geothermal energy harnesses the Earth’s stored solar thermal energy, a resource that’s both abundant and sustainable.

The Cost-Saving Benefits of Geothermal Systems

Geothermal systems offer significant cost-saving benefits. Firstly, they are the most efficient method of heating and cooling in North America; for every unit of electricity used, geothermal systems can produce four to six units of heating or cooling. This translates to a dramatic reduction in utility bills, often by 55-75% for heating and 30-50% for cooling. Additionally, these systems have fewer moving parts and are shielded from outdoor elements, leading to lower maintenance costs and a longer lifespan compared to conventional systems. The main maintenance requirement is the replacement of air filters, which can be done easily by a homeowner.

Geothermal Tax incentives and Rebates

Geothermal offers many benefits to the environment and the electric grid, which is why the technology is supported by generous tax incentives and rebates. In the US, residential, commercial and industrial buildings, as wells as other types of heated environments such as places of worship, heated garages and community centers can receive a 30-50% federal tax credit. Non-taxable entities, such as universities, churches or government buildings can receive their financial benefit in the form of a cash payment. In addition to the federal rebates, NYS offers a 20% state tax credit (up to $5,000). Most utilities in NY and VT offer rebates ranging from $1,500/ton to $6,500/10,000 BTU, which typically equates to between $6,000-$36,400, depending on the size of the equipment. In Massachusetts, residents can get up to a $25,000 flat rate rebate.

In short, even though geothermal may have higher upfront costs, a typical homeowner or business will receive tax incentives and rebates worth approximately 50% of the cost. All of Energy Catalyst’s products are eligible for these rebates and we apply for them on your behalf.

Initial Investment vs. Long-Term Savings

The initial cost of installing a geothermal system, including the underground piping, can be higher than traditional heating and cooling systems. However, the long-term savings are substantial. Homeowners typically recover the installation cost in savings within 5-10 years. Since geothermal systems have longer lifespans, often lasting 25 years for the internal components and over 50+ years for the ground loop, the savings make it a wise investment in the long run.

Benefits to Our Electric Grid

Geothermal doesn’t require electric backup heat or loose significant efficiency during peak conditions, which is why geothermal has a substantial benefit to the electric grid. A study by Oak Ridge National Laboratory (ORNL) and the National Renewable Energy Laboratory (NREL) found that, coupled with building envelope improvements, installing geothermal heat pumps in around 70% of U.S. buildings could save as much as 593 terawatt-hours of electricity generation annually. That’s roughly the equivalent to 15% of US electric demand!

Why Choose Geothermal?

Choosing a geothermal system is a smart decision for both the environment and your wallet. The long-term savings, coupled with reduced environmental impact, make it an attractive option for those seeking a sustainable and cost-effective heating and cooling solution. As technology advances and awareness grows, geothermal energy is set to become an increasingly popular choice.

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