Economic Incentives for the use of Geothermal Systems
In 2018 Federal Government had restored residential tax credits for the home owners utilizing geothermal HVAC.
- Currently for the years 2018 and 2019 individual homeowners tax credit is 30% of the system cost.
- Also for the projects serviced by ComEd there is a cash rebate program of up to $6,000 per household.
Combination of the above incentives plus long term energy efficiency savings achieved from geothermal operation will allow homeowners to have highest cost efficiency system and at a cost comparable to a conventional HVAC system.
When analyzing the cost of a geothermal system there are important factors that needed to be addressed –initial installation cost- saving/efficiency – should be considered as well as another major parameter – the system’s long-term operation expenses. Over the useful life of the building the drastic savings from lower operational costs of geothermal heating and air-conditioning systems will create additional cash flow and that will result in building value increase far over the initial incremental cost of HVAC system modification.
When comparing the initial cost of the systems, it is important to understand that distribution ductwork and controls will be the same for geothermal and for conventional system. The main cost difference for geothermal system will be cost of drilling and placing the underground loops – the source of thermal energy for the life of the building, the conduit for the sustainable energy transfer from the ground to the heat pump to the building HVAC.
For new construction or a retrofit, the initial incremental cost of equipment can be offset withy the available incentives. The payback period due to a reduced annual operational expensed for utilities and management can be surprisingly short. After that, building owners will benefit from a lifetime reduced operational expenses.
EPA found that geothermal heating and cooling (geothermal heat pumps) systems can reduce energy consumption — and corresponding emissions—by more than 40% compared to air source heat pumps and by over 70% compared to electric resistance heating with standard air-conditioning equipment.
Geothermal systems use the Earth’s energy storage capability to heat and cool buildings, and to provide hot water. The Earth is a huge energy storage device that absorbs 47% of the Sun’s energy – more than 500 times more energy than mankind needs every year – in the form of clean, renewable energy. Geothermal systems take this heat during the heating season at an efficiency approaching or exceeding 400%, and return it during the cooling season.