Is Geothermal Heating and Cooling Worth the Cost? Heat Pumps Explained

– This episode is brought
to you by Brilliant. Click the link in the description below. When building a house,
homeowners have several ways to power their heating and cooling systems like oil, natural gas or electricity, but there's another option
that's right below our feet. You can install geothermal
heating and cooling at your home, but is it worth the cost
and how does it hold up? I'm Matt Ferrell. Welcome to Undecided. (upbeat music) Heating and cooling systems
are an essential part of our homes, but it comes at a cost.

According to the 2021 Annual
Energy Outlook from the EIA, space heating represents 15%
of total household electricity here in the US, while space cooling accounts
for 16% so together, they share about 31% of
the total electricity use in the country. But that's going to vary
based on the region. Along with electricity, the main heating fuels
are natural gas and oil. Now, while oil usage is low across the US, it's still sadly, widely
used here in the Northeast, where I live. And we're talking about 81%
of all heating oil is used in this region. But thankfully, one alternative
that's slowly getting steam is using geothermal energy
directly from the ground to heat and cool your home. If you're interested in how
geothermal energy is used to produce electricity, I have
a video on that topic too.

Geothermal systems have been
in place since the 1940s, initially providing water heating. But with the technology's evolution, these systems have been
used for different purposes, such as electricity generation and heating and cooling systems, also known
as Ground Source Heat Pumps, or GSHP, which take advantage of the ground's stable temperature to provide heating and cooling. Basically a geothermal
heating system is made up of fluid-filled tube loops to
exchange heat with the soil and a heat pump that removes
the heat from that fluid, concentrates it, and then transfers it to the building using duct work. That part looks pretty familiar to any other forced air heating system that you've probably seen. The heart of a geothermal
heat pump is made up of a heat exchanger, a
compressor, and a control system that regulates the process. The fluid that's used can
range from groundwater to a water mixed with antifreeze or another suitable
refrigerant that circulates throughout the ground loops. But to understand that
heating and cooling process, it's important to know
that heat always flows from a higher temperature, fluid, or body to a lower temperature one.

For example, when you put an
ice cube into a glass of water, it melts, right? That's because the water
has a higher temperature and more heat than the ice cube, so the heat is transferring into the cube, which causes the ice to heat up and melt. So taking that back to the
heat pump, during the winter, the temperature underground is
higher than the surface air.

The cool liquid traveling from the house down inside the loops,
absorbs heat from underground, bringing it back up into the house. And the heat pump compresses the liquid, increasing the liquids
temperature, which warms the air and the warmed air is
circulated around the house and exchange with the cooler air. The cooled liquid from
this process is pumped back into the ground to continue the cycle, forming a closed loop. In the summertime, this
process is reversed. The lower temperature
refrigerant absorbs heat from the house, which now
has a higher temperature than the underground, so it's
the exact same principle.

The heated liquid transfers
heat from the house into the ground and returns back up into the house cooled off. Now geothermal systems can be split up into several subcategories,
the simplest of which are Open Loop Geothermal Systems. They use an open-ended pipe
to pump up groundwater, which is much closer in temperature to the surrounding ground. The water passes through heat exchanges within the heat pump, and
then back into the ground, but this time at a distance
from the intake point. This type of system takes a
lot of care because you have to make sure that the
intake water doesn't damage or clog up the pump or heat exchanger. On top of that, in some locations, there are environmental
regulations that require that the output water has to be treated before it's being discharged
back into the ground.

Sediment and contaminants
from the groundwater can clog up and wear down the
system, which doesn't happen in a closed loop systems
since the refrigerant flows through the loop without actual
contact with groundwater. All of this makes these systems
more expensive to maintain, have a shorter life span,
but they do have a lower, up-front cost, and excellent efficiency. Closed loop systems, on the other hand, are the most common type
of geothermal systems for heating and cooling. And while not always as
efficient as open loop systems, they make up for some of the downsides. They can be sub-categorized
into four types according to the orientation of
the heat exchanger loops in the ground. In vertical loops, as the name implies, they're vertically oriented,
and they require several holes to be drilled straight into the ground. The number of holes, their
depth, the spacing between them, and the volume of fluid
that's in the tubes depends on the soil, temperature variations, and the house's heating and cooling needs.

A great advantage of
vertical systems is they can be installed within a very small area. Horizontal loops, just as
the name implies here too, are composed of pipes that
are placed horizontally in the soil. With the tubing being buried about one to three meters underground, but the length can be up to 120 meters. They take up a lot of room. If the loops are installed too shallow, they can run too cool in winter months. Horizontal loop systems
are usually installed in locations with larger
amounts of ground available for digging, such as
farms, country houses.

Like I said, you need a lot of space. There also slinky coil loops,
but not that kind of slinky. These are very similar to
the horizontal arrangements, but they coil the tubing to
overlap itself to save space. So these loops provide the
same distance of piping with less area, however, these
systems require more coiling per kilowatt of capacity. And finally Pond loops
which are submerged systems that are installed in bodies
of water near the house. These systems don't require
drilling or digging, which can reduce costs, but the water needs to be deep enough so that the loops aren't
subjected to surface temperatures.

Geothermal heat pumps are sized
in tons, one ton corresponds to 12,000 BTUs and a heat pump
with 3.5 kilowatts of power. On average, you need 16 to
23 BTU's per square foot per hour as a standard rule
of thumb for heat loss. So in a new American
house, which as of 2020, averages about 2300 square feet, it require about 36,000 BTUs per hour, which brings us to a three ton heat pump at around 11 kilowatts. Geothermal systems have some advantages that have raised interest for
homeowners around the world. These systems can provide
significant savings for heating and cooling.

They can work well in almost all climates. They're environmentally friendly, last longer than conventional
heating and cooling systems, sometimes dramatically longer, and require low maintenance. According to one market sized report, the geothermal heat pumps market worldwide was valued at $9.5 billion and is expected to grow at a compound
annual growth rate of 7.2% from 2020 to 2027. The residential sector has
been a big booster of that and has accounted for 49.7% of the geothermal heat
pump market in 2019, with horizontal loop systems
being the most common. But like all technology, geothermal heat pumps have
some drawbacks and challenges that need to be overcome in
order to make these heating and cooling systems more commonplace. The high, upfront installation cost is a major stumbling block, which ranges from $10,000 to $30,000, according to EnergySage. And the larger the system is,
the higher the upfront cost. If you want to get more
specific on those prices, it's hard because it's gonna
vary based on where you live and the type of system
you're having installed.

But the ranges in costs for an
average open-loop system are between $9,000 and $15,000
and for closed loop systems, you'd be looking at between
$12,000 and $30,000. And within closed loop systems, you have choices between
horizontal and vertical loops, horizontal being between
$12,000 and $25,000 and vertical loops being
between $15,000 and $30,000. The low maintenance and lower upfront cost of a closed loop, horizontal system is why they're the most common type sold and these costs are pretty
comparable in other areas of the world from what I've seen. I found some UK prices that
fell pretty much in line with these. To put those prices in perspective, the average installation cost for a traditional HVAC
system here in the US ranges between $6,800 and $12,000,
including the new duct work, new central air conditioner,
and a new gas furnace.

Replacing an HVAC system
without new duct work costs between $4,800 and $9,300
depending on the home size and equipment used. Although the upfront cost of a geothermal system might be higher than a conventional HVAC system, ground source heat pumps
are much more efficient than traditional heating
and cooling systems. They can achieve a coefficient
of performance or COP from three to five, which
means that for every one unit of energy that is used by
the system to power itself, it will produce three to five
units of heat for the home. In addition, geothermal
heat pumps are certified by Energy Star at 45% more
efficient at heating and cooling than a traditional system. In Canada, you might be saving between $600 and $1,440 per year. And depending on your current heat source, here in the US, you can
see similar savings.

The typical payback and savings
in the system is usually around eight to 10 years, but keep in mind that these systems have
an average 20 plus year life expectancy for the heat
pump and around 50 years for the underground infrastructure. In many case, the closed
loop systems can be expected to last between 50 and a hundred years with very little maintenance. To reduce those upfront
costs, government policies and incentives like tax credits
and grants have been used to reduce the payback period. For example, here in the US, the Federal Residential
Renewable Energy Tax Credit, which rolls right off the tongue, provides homeowners a tax credit of 30% from the total installed cost of the Energy Star rated system. So a $20,000 system would cost you $14,000 after the tax credit. On top of that, some states
offer grants for homeowners who install geothermal
systems, like Maryland, which offers a $3,000 grant, now you're talking
about an $11,000 system.

And the company Dandelion, here in the US, offers a really simple, upfront process of getting geothermal
installed in your home. They'll evaluate if your
home is a good candidate, help you take advantage of incentives and provide a no down payment loan, so you can start seeing
financial savings from day one. Their service area is really focused on the Northeast US right now,
but will hopefully continue to expand. There's a few other innovations
that have been helping to drive efficiency, drive down costs and make geothermal more accessible, but before I get to that, I'd like to thank probably the best
sponsor I could have had for this video.

Seriously, you don't
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And yes, I made a really bad heat joke. They teach all of the concepts through fun and interactive challenges, which helps you understand
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about Brilliant and taps into the way I learn. Go to brilliant.org/Undecided
to sign up for free. The first 200 people will get 20% off their annual premium membership. Thanks to Brilliant and to all of you for supporting the channel. So there are a few other
innovations that have been helping to improve efficiency, drive down costs, and make it more accessible,
like dual source heat pumps.

Some areas of the world
are too hot or too cold for a heat pump to regulate
a house's temperature. Dual source heat pumps can heat, not just from the underground,
but also from the air. They'll switch to whatever
source is the most effective at that moment, achieving
a higher efficiency than a traditional heat pump. They're about two to 7% more
efficient than air source and about four to 8% more
efficient than just ground source.

Smart controls have also been implemented to offer support for the grid as well as reduce their running costs. If properly synchronized, the
smart controls of millions of devices, such as
ground source heat pumps and electric vehicles would allow the grid to balance supply and demand. Smart controls also allow homeowners to utilize suppliers' dynamic tariffs or time of use rates, simply running when the electricity
prices are the lowest. Heat pumps from the British
company, Kensa for example, can be integrated with smart controls to align heating schedules
to periods of low carbon and low cost electricity. Tariffs, such as Agile
Octopus for example, publish half hourly
electricity prices a day ahead, therefore the smart controls
will vary those prices and synchronize them with the
household's usual routine, providing the homeowner
with lower running costs.

Geothermal heat pumps
may not be the first pick for the average homeowner
who isn't thinking long-term for the environmental benefits,
but with further refinements and incentive policies,
geothermal systems will continue to become a more compelling
choice for the masses. What do you think? Do you want a geothermal system? I know I do. Jump in the comments and let me know. If you like this video,
be sure to check out one of the ones I've linked to right here. Be sure to subscribe and
hit that notification bell if you think I've earned
it and, as always, thanks to all of my patrons
and to all of you for watching. I'll see you in the next one.

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