Why do Geothermal Systems cost so much?
Last Post 11 Apr 2011 12:03 AM by robinnc. 188 Replies.
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gonegeoUser is Offline
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28 Sep 2010 10:27 AM
IMHO, geo is for anyone building new. They could also consider solar active/passive if appropriate for their building/site. Like you said, even passive solar makes you adjust furnishings and the the looks of the home. Homes that are not traditional look/feel will not appeal to the masses. I have seen too many out of the ordinary homes sit on the market. With geo, you just need to tighten the envelope on a traditional design, set the thermostat, and live your life not thinking about how green you are everyday or modifying your life. People like that. There will always be people like you that don't mind adjusting to what the environment and technology dictates for you. Many alternative choices to fossil fuels would appeal to me, but I just happen to think geo is the easiest new way to assimilate into the minds of the fossil fuel thinking masses.

www.energysquid.com "Dirt Cheap Energy for Life"
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28 Sep 2010 01:17 PM
OK, the DOE says that energy costs in the average new house amounts to about $1,800/yr, of which about $1,080 is heating and cooling and DHW. And there is nothing about this house, only that it meets the requirements of the current energy code . (A new, tougher code, IECC 2009, is coming along soon: it requires a blower door test, or inspections of every air infiltration trouble spot.)

Let's say that geo can cut heating and cooling and DHW in half, although that's probably not true if the comparison includes a high efficiency ASHP or natural gas in a high efficiency furnace or a heat pump hot water heater. Joe's example isn't directly comparable here because the average new house won't need much of a geo system. But merely subtracting his extra annual service expense leaves ... $140 in annual savings? To amortize and depreciate?

This is not a lonely view on my part. Public Service of New Hampshire has a program offering to pay $7,500 toward geo installation, with one stipulation. It has to be an Energy Star home, or 20 percent more efficient than houses built to code. (Yes, it calls for a blower door test.) http://www.psnh.com/Energy/Home_Efficiency/Energy_Star_Homes.asp

PSNH takes this approach because it wants the low-hanging fruit picked first. There are two tracks, fossil and geo, because low-hanging is often enough, even in NH. For proof, note that PSNH describes geo's gains as "at least 35% more energy efficient than homes built" to energy code. Impressive. Until you remember that Energy Star alone means 20 percent more efficient.
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29 Sep 2010 07:01 AM
It is very easy to retrofit an older home with a geothermal heat pump system.
They can also be installed in newer homes as well.During a consultation, trained experts will view the area surrounding your home and determine which system is the best for you and what the source of geothermal heat will be.We have a staff of trained installation experts who can meet with you and provide a free consultation and estimate as to the cost of installing a geothermal heat pump.

<a href="http://www.greentech.ie/"><strong>Renewable energy systems </strong></a> for all your needs
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29 Sep 2010 10:11 AM
Todd,
You know there are people here who owe more than there house is worth and found their heating costs doubled in the last couple years. Modest homes that suddenly cost $800 to heat to 70 in January. These folks can't build your smugly proposed passive solar house, they can't sell theirs.
So they set the thermostat in the low 60's by day and the low 50's at night. Some of them borrow money from their pensions (which aren't performing anyway), some from their parents, some have it saved; none from their house (no 30 year loans here). All are comfortable for the first time in years after their geo purchase and perplexed as to why anyone would care if it is an investment or expense.

Some people like historic homes and your solutions are not a good fit for them.
Some like a particular piece of property and choose to live in the house that's already on it.
Some people like sunshine at a less advantageous time of day or year, or sky lights, or live on the wrong side of the lake so the window facings are not advantageous.
Almost nobody is building new homes in my area right now as you can buy square feet cheaper than build them (talk about expense, pay 5 times as much/sq' to have a passive solar home, wonder what that costs over 30 years).......
Really, I can think of many applications where geo fits and performs well.

I show people what they are paying and what they could be paying. They take it from there.....

If it doesn't work for you, fine, but I tire of you twisting my words to suit your arguments. I also tire of your continuing to imply geo pros are snake oil salesman.
Perhaps you would be happier with more time invested...ooops er I mean EXPENDED, at a solar forum.
Joe Hardin
www.amicontracting.com
We Dig Comfort!
www.doityourselfgeothermal.com
Dig Your Own Comfort!
Paul AuerbachUser is Offline
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30 Sep 2010 12:55 PM
Let me pick up where Joe left off with Todd - and anyone else who believes geothermal isn't the most incredible technology for heating, cooling and hot water. 

There are many REAL WORLD case studies proving geothermal saves more money than any other technology and pays back the up-front investment in a short time - depending on the application (pardon me for calling it an investment - that's how most geo owners see it).  The fact is, geothermal on average is 4 times more efficient at delivering a BTU than oil or propane.  That says it all.

Property owners are buying geothermal systems in greater numbers than ever before - and most are thrilled with their decision.  In new construction, not installing geothermal is bad business - on many levels.  But many Americans are driven by the up-front cost and are willing to gamble on cheap fossil fuel forever.  They choose poorly. 

Our industry needs to do a better job educating consumers - and not from these "government" websites.  I'm pleased to say there are many initiatives in the works which will educate the consumer and drive demand.  It's just a matter of time.

Go Geo

Paul
www.TotalGreenUS.com


 


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30 Sep 2010 03:54 PM
Paul,
I don’t think anyone is saying that geothermal systems are NEVER the best option, simply that they are not always the best option. If you have to chose between building envelope upgrades and superinsulation vs geothermal, geothermal is often hard to justify. My own house burned less than 350$ in propane at current market rates in 12 months for heat, hot water and cooking. Reduce the DEMAND enough and efficiency of the source of btu’s is irrelevant. That is why most Passive houses are build with supplemental resistance heat only.
 
"Let me pick up where Joe left off with Todd - and anyone else who believes geothermal isn't the most incredible technology for heating, cooling and hot water. “There are many REAL WORLD case studies proving geothermal saves more money than any other technology and pays back the up-front investment in a short time - depending on the application (pardon me for calling it an investment - that's how most geo owners see it). The fact is, geothermal on average is 4 times more efficient at delivering a BTU than oil or propane. That says it all. “

OK That works great if you assume that producing electricity and distributing it is 100% efficient. The numbers are generally closer to around 30% efficiency between generation and distribution losses in real life. Still better then fossil fuel directly but now the difference is much smaller.

“Property owners are buying geothermal systems in greater numbers than ever before - and most are thrilled with their decision. In new construction, not installing geothermal is bad business - on many levels. But many Americans are driven by the up-front cost and are willing to gamble on cheap fossil fuel forever. They choose poorly. Our industry needs to do a better job educating consumers - and not from these "government" websites. I'm pleased to say there are many initiatives in the works which will educate the consumer and drive demand. It's just a matter of time.”

I would argue that the advantage of geothermal is in houses with relatively large heat losses in areas with cheap electricity.  Small and or very efficient houses don’t gain much with geo. The other factor is the cost of electricity. Where I live, each KWH is 0.196$ Geothermal is a tough sell. If we were paying 0.07$, it would make a lot more sense.
 I think there are many great applications for geothermal.

For it to gain widespread acceptance, it needs to be justifiable on a cost basis alone. IF you show me case studies of house X with a geothermal system costing less than the same sized, same priced house Y with a natural gas heating system and the differential costs spent on envelope upgrades in a 6000+ HDD climate and 0.20$kwh electricity, you would make me a believer

Cheers,
 Eric Anderson
Think Energy CT, LLC Comprehensive Home Performance Energy Auditing
joe.amiUser is Offline
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30 Sep 2010 10:09 PM
Once again, the "build better" argument.
Did you happen to read my last post?
Some people have what they have.
Insulation is not always the best ROI..... I mean ROE.
j
Joe Hardin
www.amicontracting.com
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www.doityourselfgeothermal.com
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Eric AndersonUser is Offline
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01 Oct 2010 09:56 AM
Joe,
 I was not replying to you at all.   I think you are fairly balanced in your approach to the benefits of geo and its applications.
I took exception to Paul’s blanket statements.
 
“Let me pick up where Joe left off with Todd - and anyone else who believes geothermal isn't the most incredible technology for heating, cooling and hot water.”
 And
 “ In new construction, not installing geothermal is bad business - on many levels. But many Americans are driven by the up-front cost and are willing to gamble on cheap fossil fuel forever. They choose poorly.”
 
My point is fairly simple. In a typical new house, the total energy use of the house can be radically decreased through envelope upgrades. Cutting it in ½ compared to a run of the mill energy star house is doable without too much effort, cutting the energy usage to ¼ takes some effort. If you get the energy usage low enough heating and cooling becomes inexpensive no matter what the energy source or efficiency. That is the whole concept behind “passive house”. The reality today is that most houses in this area are still built with poor insulation and envelope sealing (although it is much better than 50 years ago). They would be prime candidates for geothermal, but only because they were built poorly in the first place.
If you want good examples of reasonable cost low energy buildings look at the stuff http://www.kaplanthompson.com/ is doing. It certainly does not cost 5 times as much as you (Joe) alluded to above.

IF you are talking older houses the equation changes.  IF you came to me and said Hey I have a 3000 ft^2 house that is 50 years old. I have done all the obvious things to increase energy efficiency (air sealing, sealed storm windows, eliminated duct leakage, maxed out attic insulation, etc) but the house is still burning 1200 gallons a year of oil or propane, geothermal can be a great solution.
IF you have a house with a very large fraction of glass (that was not designed as a passive solar house) think Philip Johnson glass house, geothermal can be a great option. It makes the most sense when the cost of electricity is low, and other fuels are high. 

I think the problem that a lot of us have is that the blanket statements that Geothermal is always the best, least costly overall and “greenest” option are misleading. Sometimes it is, sometimes it is not. I argue that you should investigate every possibility before choosing any one approach.

Have a Happy Day
Eric
Think Energy CT, LLC Comprehensive Home Performance Energy Auditing
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01 Oct 2010 10:36 AM
Eric,
The 5 times comment that you alluded to, referenced that folks in my area can currently purchase bank owned properties for as little as 20 cents on the dollars it would take to build a new passive solar home (ie 1800 SF on 5 acres $50,000). If these are <20 year old homes, as many are, complete with R13 walls and R 30 attic insulation, there is only so much to be gained inexpensively on the envelope (and yes our electricity is cheap).

"I think the problem that a lot of us have is that the blanket statements that Geothermal is always the best"

The problem may be "blanket statements" as I respectfully disagree that envelope improvements are always the "best option" i.e. my scenario above.

Different areas have different circumstances that make some things a better fit than others.

One place that will always favor geo, however, is a geo forum

Joe

Joe Hardin
www.amicontracting.com
We Dig Comfort!
www.doityourselfgeothermal.com
Dig Your Own Comfort!
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06 Jan 2011 11:40 AM
Every time I pass this sticky I wonder about the first post. I don't know what state that's in, but is it dated or what's up?

Truth is that you can order a 4 ton GEO system for $7500, Pay a ducting sub $2,500 and call in 100 hrs of HVAC install at $50/hr for a total of $15,000 to get to the same place the OP showed nearly $24,000.

HVAC guys don't get $45/hr, payroll taxes are NOT 30%, the installer does NOT pay sales tax on materials and most businesses don't get to heap costs on top of mileage on top of overhead on top of management on top of profit (or whatever). :-)

With cost being an obvious disincentive to the acceptance of new "greener" technology, it would appear that the service portion of the industry has a large part to play in getting things moved forward.
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06 Jan 2011 11:16 PM
What about the water side? Is that somehow free?
Curt Kinder <br><br>

The truth is incontrovertible. Malice may attack it, ignorance may deride it, but in the end, there it is - Winston Churchill <br><br><a href="http://www.greenersolutionsair.com">www.greenersolutionsair.com</a>
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07 Jan 2011 12:18 AM
No, the OP went on to add those costs. However, the pipe and fittings are included in the "SYSTEM" price I noted above. If you have to drill boreholes, it's going to be expensive no matter who installs the actual system. If you have the footprint to put a field in, I've been quoted less than $1,000 to do the excavation and re-burial.
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08 Jan 2011 01:51 AM
Posted By ICFHybrid on 06 Jan 2011 11:40 AM

1) Truth is that you can order a 4 ton GEO system for $7500, Pay a ducting sub $2,500

2) call in 100 hrs of HVAC install at $50/hr for a total of $15,000 to get to the same place the OP showed nearly $24,000.  HVAC guys don't get $45/hr, payroll taxes are NOT 30%

3) the installer does NOT pay sales tax on materials and most businesses
 

Lots of bones of contention I have with your assertions, but I'll keep it to a few.
1) Geo also requires significant electric work (a seperate service in my AO right down to a second meter). Then there is a plumber, process pipe and buffer tank (for the DSH everyone wants). Few will install 4 tons of duct for $2,500 with material included.

2) Perhaps the 100 hours you cite included duct labor? We do not bill out at $50/hour. We charge $80 as a $25/hour tech with vacation time, 7% social security, comp insurance, health insurance, truck, gas auto insurance.........costs me at least $50/hour.

3) Correct, sales tax is a pass along- passed along in the cost of a geo system.

In my area, a 4 ton geo depending on features selected will be around $20,000 turn key. On the east coast more. In Indiana from what I understand, less. Nowhere I know of will it cost $15,000 turnkey without significant DIY contribution.
In your example, If I add my electricians rate of $2,000 to $2,500 and the DSH piping and buffer tank + tax you would be ~$19,400.
BTW if we were talking DX (as was OP) my cost is higher as would be buyer's.
J
Joe Hardin
www.amicontracting.com
We Dig Comfort!
www.doityourselfgeothermal.com
Dig Your Own Comfort!
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08 Jan 2011 09:20 AM
Posted By joe.ami on 08 Jan 2011 01:51 AM
Posted By ICFHybrid on 06 Jan 2011 11:40 AM

1) Truth is that you can order a 4 ton GEO system for $7500, Pay a ducting sub $2,500

2) call in 100 hrs of HVAC install at $50/hr for a total of $15,000 to get to the same place the OP showed nearly $24,000.  HVAC guys don't get $45/hr, payroll taxes are NOT 30%

3) the installer does NOT pay sales tax on materials and most businesses
 

Lots of bones of contention I have with your assertions, but I'll keep it to a few.
1) Geo also requires significant electric work (a seperate service in my AO right down to a second meter). Then there is a plumber, process pipe and buffer tank (for the DSH everyone wants). Few will install 4 tons of duct for $2,500 with material included.

2) Perhaps the 100 hours you cite included duct labor? We do not bill out at $50/hour. We charge $80 as a $25/hour tech with vacation time, 7% social security, comp insurance, health insurance, truck, gas auto insurance.........costs me at least $50/hour.

3) Correct, sales tax is a pass along- passed along in the cost of a geo system.

In my area, a 4 ton geo depending on features selected will be around $20,000 turn key. On the east coast more. In Indiana from what I understand, less. Nowhere I know of will it cost $15,000 turnkey without significant DIY contribution.
In your example, If I add my electricians rate of $2,000 to $2,500 and the DSH piping and buffer tank + tax you would be ~$19,400.
BTW if we were talking DX (as was OP) my cost is higher as would be buyer's.
J
My first post and go figure I agree with Joe. In my area a 4 ton water source Geo system turn key is about $24,000.
The problem with the DIY situation ICFHybrid presented is
1.) Organizing all of the subs.

2.) As an installer, we don't perform ductwork on systems we don't install. Who is going to tell the ducting sub what size the ducts should be?  I'm not gonna design ductwork for a job that I'm not going to install. ( I would charge max rate for doing Manual J loads 
     and the time to layout and design.)

3.) Warranty - In most cases the manufactures don't honor a warranty when purchased separately, online or when installed by an unapproved vendor.

4.) The best reason of all?...If you have a problem every separate contractor will blame the other guy. Especially if you sub out the well driller yourself (assuming you are talking about open or closed loop) Who is gonna guarantee the loop or the grout in the loop?
This is when people get aggravated get the run around and start posting bad things about geothermal. 

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08 Jan 2011 10:20 AM
Posted By ICFHybrid on 06 Jan 2011 11:40 AM
Every time I pass this sticky I wonder about the first post. I don't know what state that's in, but is it dated or what's up?

Truth is that you can order a 4 ton GEO system for $7500, Pay a ducting sub $2,500 and call in 100 hrs of HVAC install at $50/hr for a total of $15,000 to get to the same place the OP showed nearly $24,000.

HVAC guys don't get $45/hr, payroll taxes are NOT 30%, the installer does NOT pay sales tax on materials and most businesses don't get to heap costs on top of mileage on top of overhead on top of management on top of profit (or whatever). :-)

With cost being an obvious disincentive to the acceptance of new "greener" technology, it would appear that the service portion of the industry has a large part to play in getting things moved forward.


The costs above would definitely be from doing most of the work DIY and perhaps using "weekend, off-the-clock, side-jobbers" (HVAC techs wanting to earn some extra money on their off hours). If using a real HVAC company at those prices you will definitely get what you pay for, especially with the ducting. A geo system is particularly susceptible to poor duct work installation and will not deliver the rated airflow at excessive ESP (External static pressure). Not many ductwork installers working off the clock have the ability to calculate the manual D and even fewer techs bother to test the ESP after the installation to compare installed design with the calculations. As an HVAC contractor, most comfort issues I see are from poorly installed and designed duct systems with TESP's in excess of 1.0" Water column where the fan curves diagrammed on the unit specify the unit is only rated for 0.5" total water column restriction. Proper design and installation takes time and effort and money. I think loopfield size, installation, site restoration etc. prices in the above post are extremely low. Most of our installs are vertical due to our location (North Central TX)but I am currently experimenting at my own business to quantify a horizontal ground loop design vs. the vertical loops I have installed at the shop office. To keep my EWT at 90 degrees at my location and soil type, I must have over 2400' of heat exchanger for my 1.5 ton (18,000 BTU) system. When I account for the pressure drop from fittings, heat exchanger in the system and pipe, if I want to keep pumping costs low and keep my single pump flow center, I had to increase the pipe size to 1" vs. most DIY installed .75" Several outfits on ebay are selling "complete" DIY piping kits for all sizes heat pumps. The one I pulled up was a complete 4 ton (48,000 BTU) system with all of 1800' of pipe. Without a proper design, people in the deep south are likely installing these systems and then will bad mouth geo when they lock out on high and low temp. I'm not even sure I can install a horizontal system over 4 tons without excessive pumping power, negating the benefits of the geo system. Additionally one cannot forget testing and commissioning of the system. Not many weekend warrior HVAC techs have a flush cart or a way to properly hydrostatically test the GHEX. My point is that a geo system can be installed on the cheap but without the proper training, tools and equipment, the owner will not see the benefits of a premium system. If a business is to survive and thrive they also must add the cost of "doing business" into all their bids. We sub out the drilling but dig all the header lines and connectors. Excavators, hoes, dump trucks and trailers all need maintenance, insurance, plates etc. We have an approximate idea of what each piece costs to operate and maintain and still have $$$ surprises that we have to absorb. How economical is it to hire the cheap excavation company to install your lines when they suffer numerous breakdowns, leak hydraulic oil when hoses blow and can't get the job done in a timely manner? There will always be someone who is willing to do it cheaper, someone who is willing to work for wages only. Will they put forth the effort to properly design and install the system? Maybe. Will they stand behind their work when something goes wrong? Maybe. Will they work thru a problem in the install to do it right or will they just cover up the mistake, knowing they will be down the road after the check clears? Doubtful. Will they be around in the long haul after unexpected costs eat into their wages? Doubtful. I, as many of the pros here also will not do is compete on price. Our differentiation is quality and the emphasis on not "What we do" but in "HOW we do it"
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08 Jan 2011 10:51 AM
My post was intended to address the OP and put things in perspective. It was not intended to lay out the turn-key cost of any particular system, and it certainly wasn't intended to tell any of you service professionals how to do business in your particular area.

What I sketched out was the (delivered) cost of such a system to pretty much anywhere in the lower 48. Presumably, that price includes an adequate profit on on the system and handling for the seller.
The $2,500 allowed for ducting and install is the not-to-exceed bid I received from one of the premier ventilation guys in an area with generally higher labor rates. He would plan and inspect the job and his guy would do it. Full guarantees.
The 100 hours of install labor is from a fellow who owns one of the top 3 HVAC businesses in three counties. He thought he could do 80 hours, but 100 hours was unquestionably adequate. I suggested and got $50/hr as a wholesale discount from their regular rate. He will still make money on that. Warranty satisfied because the work is backed unconditionally. He doesn't blame others.

If you want to carry this out farther, a horizontal field would run $1,500 additional, with $1,000 budgeted for excavation and $500 for labor. That takes us to $16,500 (without tax ;-) )

The OP was nowhere near finished at $24,000, so I guess it is up to the (informed) buyer to decide what all the rest of that "service" is worth to him.

We charge $80 as a $25/hour tech with vacation time, 7% social security, comp insurance, health insurance, truck, gas auto insurance.........costs me at least $50/hour.


Labor Rate: $25.00
vacation, sick leave: $2.00
health insurance: $2.75
Base Rate: $29.75

Employer FICA: $1.84
Employer Medicare: $0.43
FUTA: $0.30
SUTA: $0.60
Comp: $3.00

$35.92/hr

Trucks are usually Overhead, but you can take it out of the $14.00 an hour that is still on the table.
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09 Jan 2011 12:00 PM
That SO hugely ignores all of the other costs of doing business that it is scarcely worthy of reasoned reply.
Curt Kinder <br><br>

The truth is incontrovertible. Malice may attack it, ignorance may deride it, but in the end, there it is - Winston Churchill <br><br><a href="http://www.greenersolutionsair.com">www.greenersolutionsair.com</a>
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09 Jan 2011 04:06 PM
That is a common treatment of direct labor costs and is not intended to be indicative of any "costs of doing business".

That accounting is much more accurate than claiming that payroll taxes are 30% or that you have to pay your guys $45 an hour. While I am sure that there are some people in business who haven't a clue about what their actual costs are, misrepresentations of "how much it costs me to stay in business" are often intended to mislead potential customers. Different businesses have different costs of doing business and a customer has the right to choose between higher and lower overhead with respect to what they feel the respective benefit to them might be.

I've used that company maybe 20 times and they have always performed flawlessly. They have been in business 30 years and the owner is honest. I think he knows how to price his work.
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09 Jan 2011 05:35 PM
ICFHybrid,
What is that company's price for the whole job? Why not use them for the whole job instead of subbing everything out?
John
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09 Jan 2011 06:20 PM
In just the last month in my owner build:
* I bought Andersen windows for 60 percent of the price I was quoted 18 months ago. The No. 2 distributor cut his price twice before giving up.
* A roofing company asked to reprice a bid it made three weeks earlier, saying it could take less.
* A steel supplier offered a discount for cash on my will-call sale plus sales tax "forgiveness." (Yeah, right.) It was the fifth time I have heard this offer.

So the question is why are geo prices dramatically higher in the same economy? The answer of course is tax credits.
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