The average cost of a geothermal heating system

Written by russell huebsch
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The average cost of a geothermal heating system
The rising costs of heating and cooling are leading more people to consider geothermal systems. (Image by, courtesy of Lydur Skulason)

One way to protect a home against the rising costs of heating is the purchase of a geothermal system. Geothermal heating systems take advantage of the earth's natural heating properties. Although a geothermal system can initially cost more than installing comparable systems that use fossil fuels, most homeowners see tremendous cost reductions over time.


Geothermal heating systems (GHS) are about 60 years old, according to the U.S. Department of Energy. The energy in a GHS comes from several feet below ground level, where the earth's crust does not experience many temperature extremes. A heat pump exchanges air and beneath-ground heat and distributes it into the house. During the winter, the ground temperature remains higher than that of air and cooler than air during the summer months.


The average cost of a geothermal heating system depends on the installation of the unit itself and maintenance costs. A geothermal system is not something most people can install themselves, so a qualified installer is needed. A typical 3-ton unit costs about £4,900, according to the DOE. A study on geothermal systems in Nebraska schools by Oak Ridge National Laboratory found that maintenance costs for a GHS are about 5 pence per 30 cm (1 foot) square of space.


Although some geothermal systems can cost more upfront than traditional heating and cooling systems, the savings on utility bills due to geothermal's greater efficiency can pay for the system in as little as two years, reports the DOE. A GHS is about 30 to 60 per cent more efficient than traditional heating systems. In addition, some banks will allow larger loans for a GHS installation.


In general, vertical geothermal systems are more expensive than horizontal systems. Whether or not you can install a horizontal system depends on the geography of the local environment. Soil with better heat transferring ability requires less pumping. An ample supply of land can fit in a horizontal system, while compact land usually needs a vertical pump.


Several programs exist to give tax incentives to homeowners that choose to switch to a renewable energy like geothermal power. The Residential Renewable Energy Tax Credit allows up to a £1,300 tax credit for a GHS installed before 2009 and no maximum exists for units installed after 2009, according to the Database of State Incentives for Renewable Energy.

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