There are allot of discussions on this forum about the install costs of geothermal systems and if they are worth the investment.

First, lets look at the install costs.

Geothermal systems do not cost more to install initially from the point duct system requirements. ALL HVAC systems [forced air] need to be designed to carry the amount of air required to operate efficiently and at maximum capacity. Generally, this is 400 CFM per ton of refrigeration capacity. A 3 ton air source system requires the same amount of air flow as a 3 ton geothermal system. Therefore, there is no difference in the initial install costs between the two.

Where the duct system cost vaires is the system design. A box and flex duct system is cheaper to install since the sheet metal used is reduced. Sheet metal duct systems require more time to fabricate and install, therefore it simply costs more. A box and flex system, sized and installed correctly will perform correctly and efficiently. But it is not as durable as a sheet metal system. Basically, it is a trade off. Sheet metal is more durable and will typically last forever, flexible duct typically does not. Sheet metal is easier to clean whereas flexible duct is easily damaged during cleaning. This is a basic senario and complex designs definitely affect install costs.

Where the geothermal system install costs come into play is the equipment costs and loop installation. Geothermal systems simply cost more to manufacturer. The loop systems require more labor to install versus running copper lines to connect standard air source systems.  Loop systems, either high density poly [HDP] for water source systems or copper loops for DX systems require excavation or drilling. This is another initial install cost. Typically, HDP requires more linear footage than copper loops since copper is 400% more conductive than plastic. So in theroy, less excavation or drilling is required to install DX systems. This however comes at a price...copper is expensive. So there is a balance there between the initall install costs of each system. Only the bidding contractors can determine what this will be.

Since more labor is required to install geothermal systems, this also affects the initial install cost. Labor rates vary nation wide, so don't expect labor to install a system in Georgia to be the same in California. This is simply a regional cost that varies from state to state. Drilling and excavation costs follow the same path.

A HVAC companies operating costs will vary also. Fuel costs vary from state to state. Insurance [vehicle, liability, health, workmans compensation] all vary from state to state. All these items affect the bottom like...consumer cost.

The HVAC industry has undergone drastic changes in recent years. Nearly every component used to install a HVAC system has experienced price increases. Code changes now require higher efficiency systems, greater insulation values on the duct systems and a host of other items that affect the bottom line. Refrigerant prices continue to rise. So does fuel costs, labor rates, operating costs, etc.

In sumary, don't expect to get the same install costs from one state or region to the next...it won't happen.

Now, is a geothermal system worth the additional cost? What is comfort and efficiency worth to you? I have never gotten an answer to that question. There are a number of things to consider.

Typically, a geothermal system will have a payback period of 5-7 years between the cost of installing a high efficiency air source system versus a geothermal system. If you are going to install a geothermal system and move from the home within that time frame, you probably will not experience any energy savings. Now consider that the national life expectancy of an air source system is 10-14 years before the system will have to be replaced. This is an important fact to consider. Geothermal systems typically have more than a 30-year life expectancy.

Lets say that a geothermal system costs $20K to install versus $10K for an air source system. Given current prices and inflation, replacement cost of the system could easily reach 75% if the initial installation costs. Therefore, the air source system would require an investment of $17,500 during the first 10-14 years of the systems life. Given this, you would have to save $2,500 in energy costs alone during the first 14-years of the systems life to equal the initial investment cost. Is this possible...its more than probable! That amounts to less than $15 per month! It is well known that geothermal systems are the most efficient operating systems on the market today.

Now consider the effects of installing a geothermal system. These facts can be found on the geoexchange website.

1. There are around 1,000,000 geoexchange systems installed in the US to date saving more than 21,000,000 barrels of crude oil each year!
2. Installing a geothermal system has the same effect on the environment in greenhouse gas emission reductions to equal planting an acre of trees! 
3. Replacing an existing fossil fuel burning appliance further reduces Co2 emissions and reduces our dependancy on foreign crude increasing our national security.
4. Reduces the energy requirements on our power grids, which are already greatly over loaded as evident by rolling black outs.

These are just a few of the many benefits of geothermal systems. Now, do these systems make since?  

great post, thanks

Good discussion.

To what is the life expectancy difference attributable? Aren't the compressors in both systems essentially the same? Is it because of ambient operating temps, quality of the system, deterioration of the outdoor unit due to outdoor environment, fans wearing out before pumps, or what? I'm not disputing the life difference, just wondering why it's so.


How about doing a similar comparison of hydronic radiant heat vs. forced air? I'd be interested in seeing that.

dmaceld,

There are a number of reasons why geothermal systems last longer, some of which you already mentioned.

Outdoor environment is one big reason. Air source heat pumps typically operate at a 20° split [they typically remove heat from the air at a rate of 20° meaning if it is pulling in 40° ambient air, it will discharge 20° air]. Once the temperature [ambient air] reaches 45°, the saturation temperature of the coil is below freezing. This means the moisture in the air freezes to the coil. This prohibits heat transfer, thus requires the system to defrost the coil. When the system goes into a defrost cycle, it stops the condenser fan, reverses the flow of refrigerant [switches to air conditioning mode], circulates hot gas through the coil which melts the ice / frost, then terminates the defrost cycle when the coil is clear. During the defrost mode, the auxiliary heat is switched on to temper the air temperature being delivered to eliminate cold drafts.

While the compressor is circulating the refrigerant, there is a high and low pressure in the system. When it switches into defrost, it is immediately reversing the refrigerant flow. This causes a sudden surge in the system and pressures typically spike momentarily causing stress on the system. This occurs twice during each defrost cycle [going into and comming out of the defrost cycle]. If you have ever heard an air source system in the defrost mode, you can hear this occur. If the system is located in an area where freezing rain, sleet and snow occur, the system can switch into defrost mode every 30 to 45 minutes. 

Frost and ice formed on the coil also stresses the coil over a period of years. The pressure generated on the metal [frost heave] stresses the metal. As metal heats or cools, it expands or contracts. All of this stresses the unit over a period of time. Now consider that higher efficiency units use thinner copper tubing than an older lower efficiency system [the tubing is often rifled to increase heat transfer making it even thinner], there is less material to wear for long periods [refrigerant in gas form is abrasive]. Larger coils means more brazing joints [more chances of leaks occuring]. The units must be installed outdoors, so the coils are subjected to damage from hail, kids poking at the coil, dogs wetting on them, lawn mowers and weed eaters slinging debris at them...etc. All of this affects the life of the system.

Fan blades required on air source systems often become out of balance over time causing the system to vibrate. This vibration causes metal components to rub together [coils, refrigerant tubing...etc.] causing additional wear. Ice sometimes forms on the blades and is slung into the coil causing damage. I could write forever on the reasons, but I think this gives you a good picture as to why air source systems wear out so much faster.

Geothermal systems do not require defrost cycles or condenser fan motors. There are no defrost components to repair or replace. No condenser fan motors to repair, replace or generate vibrations or noise. The coils [loops] are buried in the earth and therefore are not subject to damages mentioned above. The coils are installed in a more stable environment and are not subjected to drastic temperature swings like air source systems. Fewer moving components, less maintenance and repair costs are one of the many advantages of the geothermal systems.

Another important and overlooked part of the equation is the quality of the equipment and its installation. Typically, contractors installing geothermal systems are much better at designing and installing systems correctly. Most contractors use "rules of thumb" in sizing and designing HVAC systems. This is wrong and does our industry allot of harm.

A system has to be sized correctly according to the heat loss and heat gain of the structure to operate correctly and efficiently. If the system is oversized as is usually the case [sometimes by as much as 200%], issues are created that are detrimental to the system. Comfort issues arise. Poor latent removal [the structure cools before the humidity can be removed] causes mold issues, a cold and clammy indoor environment and system short cycling. The constant cycling of the system causes it to wear out at a much faster rate. It is a known fact that 75% of engine wear in automobiles occurs during start up when all the oil has drained back into the oil pan. The compressor of a heat pump is no different. When a compressor starts, it typically pulls 5 times the normal current to start, which generates heat. This is why light bulbs typically blow when you turn the switch on...the inrush current overheats the filament causing it to burn in two. Not only does the refrigerant heat and cool the home, it also cools the motor of the compressor. If it short cycles, this heat is not removed causing the insulation on the motor windings to slowly bake and become brittle. Once it starts to flake off, the compressor will fail.  

Improper air flow and refrigerant charge are two other reasons HVAC systems fail prematurely. To little air flow will cause the system to "slug" the compressor. Compressors are designed to pump vapor, not liquid. A liquid slug will occur if the refrigerant charge is to high or if the air flow is to low and does not boil off the refrigerant back into a vapor state. Most geothermal systems are self contained units and are charged correctly at the factory, which eliminates the overcharging issue.

In summary, air source system designs by nature are their own short commings. Add in the fact that few systems are designed or installed correctly and it is easy to see this. A survey conducted here in NC in 1994 revealed 4 major issues with heat pump installations, which resulted in systems operating at 45% less efficient than advertised. The culprits were:

1. Over sized systems
2. Improper refrigerant charge
3. Improper air flow
4. Duct leakage

It was not a matter of the system being faulty, rather a case of poor installation. If you buy the best system and give it a poor installation, you have a poor system at best.

Hi Dakers

Great Post!!! 

My company designs and installs DX geothermal systems and I see two or more clients a day for geothermal.  Our trading area is the Hudson Valley (New York).  I simply add up the customer's prior years bills and tell them this is your annual saving less the added electricity cost to run the system.  Since we install DX, the cost to run the system (depending on size) is very small - between $50 and $150 a month.   The payback in new construction is about 4 years and in the most complicated jobs (with ducting and remediation) around 7 tears. 

When you see prospective customers that have $12,000 fuel costs (2007), it's just a no brainer.  Geothermal is amazing and if installed correctly will give 25+ years of service - without combustion. 

Have a green day...

Paul Auerbach
Total Green LLc
Geothermal Specialists

> Given current prices and inflation, replacement cost of the system could easily reach 75% if the initial installation costs.

I know this is a SWAG, but wouldn't it vary wildly? I'm considering installing a vertical system, and the major expense appears to be drilling for the pipes. Hopefully that work won't have to be redone.

I think "replacement cost of the system could easily reach 75% if the initial installation costs." is referring to replacing an air source heat pump. You are right that vertical loops should never have to be replaced.

Although I agree with you that parts of the system exposed to the outdoor elements do wear out faster, I would expect the indoor airhandler part to last just as long as a Geothermal system. If for example I had to replace the outdoor unit, but not the indoor one, what percentage of the replacement cost when compared to replacing the whole system? (another words whats the outdoor unit cost compared to the indoor one?)

As far as variables in the cost of installing a system what me and I'm sure many other homeowners find frustrating is the lack of pricing information on the internet. System size and labor involved are all variables, but components are not. they are a set price and can be shipped anywhere. A 2, 3, or 4 ton system all have an invoice price from the manufacture, but just what it is without getting a contractor quote is very difficult. How would you like to go shopping for a car with no prices listed, please email one of our salespeople for a quote.  It's difficult to know if your getting a decent price or getting swindled when the cost one of the most expensive components is a big unknown. I would expect for any installation that the equipment would make up about half of the price and the labor the other half. The equipment is a set price, why is it such a big secret?

 

The distributor does not set the price of the equipment. Equipment is based on a multiplier of the MSRP, or MANUFACTURER"S suggested retail price, also called List Price. The Manufacturer sets the price. The Sales Rep sells to the Distributor, the distributor to a dealer, and the dealer to the home owner. Typically, it is all based on the list price. My point, though, is that the distributor is not the one setting the price, rather, the manufacturer. Yeah...this is probably completely beside the point....

I was talking about this same sort of thing the other day with my HVAC contractor nephew. He commented on a guy who quit a competitor and went into business for himself. Did great for a year or two while building boom was crazy. Then the market dried up just in time for the systems he'd installed at super competitive prices to start having warranty issues. He was doing nothing but warranty work, which meant he got nothing for labor and probably no profit on the parts, so he gave up and closed the business. And where does that leave his customers, who all got such a good deal from him? Paying for the labor to have warranty work done because no other dealer is obligated to do it for nothing, and the mfr's don't pay for it either. Unfortunately, in this state contractor bonding doesn't protect the customer either because the board that controls claims against contractors never rules against contractors.

The lesson is, if you want the installer to be around to do warranty work on your system, if it ever needs it, you need to pay him enough in the first place that he can bank some of it to pay for the warranty labor later.

(This discussion is about close ground loop systems, not about systems that tap into the aquifer.)

This is an interesting point that I've seen raised numerous times, when comparing DX to water loop systems.  It is true that copper, per square inch of surface area, is much more conductive than plastic pipe.  I'll absolutely accept 400% as a useful number.  Now, please, please correct any errors I make.  I presume that the DX copper line is 1/2 inch copper, and I presume that the water pipe is 2 inch plastic.  If this is the case, then the water pipe has 16 times the surface area of the copper pipe.  Given that it is only 25% as conductive as copper, that still means that the plastic pipe is able to capture 4 times the heat that the copper pipe is.  Even if the plastic pipe is only 1 inch in diameter, it's still on par in terms of thermal capture.

But this ignores one interesting issue, and that is that beyond the radius of the larger pipe, the ground does not have any knowledge of what lies inside the magic radius.  This is entirely a matter of the physics of thermal conductivity within the soil.  The ground can not supply heat at any greater a rate than it is able to supply, so regardless of the material of which the loop is made, the thermal availability of the system is entirely reliant on the characteristics of the soil, not on any characteristics of the loop itself.  Thus, it matters not one whit what material is used to construct the loop, so long as the size is sufficient to exceed the thermal conductivity of the soil.

Thus, the differences in the efficiency and cost of the system lie in the equipment inside the house.  Given that the compressor equipment can be simplified, since no fan or large protective housing is required, and the defrost circuitry is unnecessary, the ground source systems, equipment cost for equipment cost, should be comparable to an air source system.  The excavation work does add considerable to the price; in this area (rural Arkansas), I've priced out the total excavation work at about $2000 using local backhoe operators, so it is something that has to be factored in.  And of course, the cost of the loop itself, and the labor to lay it, has to be factored.  But it appears to me that as the groundsource options become more mainstream, the price will become more competitive.

However, the heat capture/storage ability of the ground source systems is of major concern to me.  Over the years, I've encountered people talking of situations where their HDD and CDD values were out of balance, and they ended up unable to extract any meaningful heat from a groundsource system far too early in the heating season, and other issues where people were imbalanced the other way, and they couldn't push any more heat into their soil, so they lost the ability to air condition their homes.  These are not problems that air source systems have.  I have a 4000 sqft home that is handled by a 3.5T SEER 14 HP, and this pump is able to handle my house down to about 25F outside without the use of auxilliary (electric strip) heat.  And unfortunately, 3.5T is overkill for my house in the summer time.  I would have absolutely loved to have a ground source system (I'm such a terrible nerd), but it just didn't seem to calculate for me.

Dakers, you made some very good posts and informative info!

I think the main things folks are so PO'ed when it comes to HVAC is that is the ONLY thing you purchase for a house that you have no where to go and get prices from dif. stores, dealers, internet, etc........NOWHERE. NOBODY will sell an HVAC unit to an individual. It 'has' to go thru an HVAC installer which just adds another 'middleman'  that adds more to the cost of the unit. This is what's so frustrating to home owners. I understand a home owner is not lic to install these units, but they should be available to purchase themselves........and they can't! Not like a window unit.

I think you mentioned you are in NC? Are you near Charlotte?

Yes and No. Yes, the copper has a smaller surface area, but no, it's not just the ability to pick up temperature.

In comparing water source (WSHP) with DX, too many think that they are doing the same thing in the ground. NOT SO. For WSHP, the loop is doing a sensible heat transfer. This is a change in temperature in the loop water solution. For DX the refrigerant is doing a latent heat transfer. Latent is a change of state of the refrigerant from liquid to gas, or gas to liquid. This latent change happens in a water to refrigerant heat exchanger in the WSHP.

Now, with a WSHP, the transfer of heat to a home typically goes through the following steps: from the earth to the water loop to the refrigerant to the air. DX skips the water loop step and transfers thus: from the earth to the refrigerant to the air. Every time you transfer energy, you lose some in the process, which is just one of the places DX picks up some more efficiency than WSHP.

Another thing to remember is that when the WSHP ground loop reaches a temperature of 20-25 deg. F., it no longer can exchange enough sensible heat with the ground to pick up enough energy to effectively run the system. It's then done. This will mostly happen on under sized systems, mis-designed systems (none or not enough backup heat, or it doesn't come on when needed), or under sized loops.

With DX, the latent heat exchange will still effectively happen well below those temperatures. That does not mean that we want the loop to get down to that temperature. In fact, if it does, it was most likely undersized, or is not using the backup heat as per manufacturer's recommendations. EarthLinked recommends that their heat pump runs at most, 90% of the time. This will always allow the ground to recover enough from having energy taken from it during run time. Same with the cooling time. Only 90% run time max. THIS MEANS IT MUST BE PROPERLY SIZED TO THE LOAD OF THE STRUCTURE WITH AN ACCURATE LOAD CALCULATION!!!

With EarthLinked DX, the refrigerant controls are also a major part of the higher efficiency, and up front cost. Typically the EarthLinked system will be 15-25% more efficient than any other geothermal closed loop system. Comparing COPs of some brands lately, I've found that EarthLinked even reaches up to 40% more efficient than closed loop WSHP.

Back to the latent vs. sensible heat exchange... With a latent exchange, 90% max. run time, and the proper loop for the proper ground temperature (it's all pre-engineered, no guesswork needed for loop design), we won't find situations where the ground has no more heat to give, or no more heat to take. End of Story! It's not difficult to do a proper load calculation and proper sizing. One just needs to make sure that the installers are accredited by the manufacturer, and that they follow manufacturer's recommendations. Ask the Dealer's Sales rep if you're not sure. In EarthLinked's case, the Sales Rep should always know.

As far as installed price, I hope you're right--that as geothermal becomes more prevalent, the price should become more competitive.

Actually I would happy at least knowing the manufacturer's list price, at least that would give you an idea where to start. Of course in reality, the List price has very little meaning when compared to actual price. One example would be "G" scale Bachman model Locomotives, the list price from the Manufacture for one model is $800, but the actual retail price is anywhere from $220 to $400 depending on what dealer you purchased it thru.  Than of course there automobiles, unless the model is in high demand, few people pay list price for any auto.

Robinnc,

I live in Stokesdale, NC [about 20 miles North of Greensboro]. I work pretty much throughout the state. I am leaving for Charlotte in moments to work on installing a DX system.

The problem with homeowners purchasing their own unit are these:

1. It is a violation federal law! Heat pumps and air conditioners are shipped from the factory with a charge of refrigerant in them. When a dealer purchases a system, it is registered to his EPA certification number. Is it being done anyway...I'm sure it is, but that still does not make it right. Refrigerant or systems that have refrigerant in them is required to be serviced by EPA certified technicians.

2. Warranty: If the system is not installed by a licensed HVAC contractor that is authorized to sell, install and service those units, there is no warranty. You could purchase the system, but who would provide the warranty service? The manufacturer does not provide labor warranty, that is your dealers responsibility and he only has to provide a 30 day warranty although most give one year. Even if you bought the unit and you hired a licensed contractor to install it, he/she will not provide any warranty with the system because he did not profit from the sale. If he does, he has added profit to his install costs or he is giving his money away and could loose more than he made from the install.

3. Most homeowners think that "there's not much to installing a HVAC system". I'll simply put it this way...I have had many customers accept my contract while gripping about the price the whole time. Once we started the installation, I always heard "Gosh, I never realized there was this much to it". Typically, homeowners are not equipped to properly install and start their system after purchasing it themselves.

4. Typically, mechanical and electrical permits are required to install a HVAC system. Homeowners can not pull these permits without passing an aptitude test that shows they have the knowledge to install the system correctly. Installing the system without obtaining a permit can cause a big issue... a void of homeowners insurance! If the system were to start a fire and it was installed bypassing these channels, they can legally void the policy.

Saving a couple of dollars [even if you could considering the other information] is not worth the risk you take. I have seen it happen many times over the last 30 years.

Get price quotes, compare systems, check references and with the BBB. Make a good decision on the system and reast easy. What is piece of mind worth?

Tuffluck made some very valid points. Look at a couple of others.

Plastic pipe is an insulator. So is water. Then you add a glycol solution to the water to keep it from freezing and you drop the waters conductivity even further.

Refrigerant has the ability to perform heat transfer at a much higher rate than water. As Tuff stated, there is no exchange losses since the transfer of heat energy is direct to the refrigerant circuit for DX. Water source systems require a pump to circulate the transfer medium whereas DX does not. There is an additional energy loss [required to operate the pump] and additional components that require servicing and repair [an additional cost that must be factored in during the systems life expectancy]. Water to refrigerant heat exchangers require maintenance to keep them operating at peak efficiency and capacity. DX simply does not have these other operating costs.

Tuff is right concerning efficiencies. Look at the ARI ratings for water source systems. Typically, they are unable to produce heat at rated refrigeration capacities [i.e.: 12,000 Btuh / ton of capacity]. It sometimes much less. It is plain to see, don't take my word for it. Look at the ARI listed capacities for yourself.