Green Alert: Interest on the Rise in Massachusetts for Geothermal HVAC Systems

Within the past several weeks, here at Red Apple Renovations we are noticing increased interest in geothermal HVAC systems in the Boston area. This is a "green" approach to heating and cooling, and can be installed with equal ease in new construction and remodeling projects.

The increased interest is due mostly to new tax credits put in effect by the stimulus bill passed earlier this month. Any new geothermal HVAC installed between 2009 and December 31, 2016 is eligible for a 30% tax credit for the cost of the geothermal system. The great thing about this tax credit is that is has no cap. Unlike previous tax credits, which were capped at $2,000, you get a direct tax benefit of 30% of the cost of the new system regardless of the cost.

Here is an example of how it works:

Geothermal retail (sample) $30,000
Fed tax credit 30% of cost $9,000
Net cost to consumer $21,000

(The initial cost of a geothermal heat pump system varies nationally according to influences such as labor rates, type of system and equipment, and geographical location.)

Geothermal heat pumps (GHPs) are a relatively new technology. Over time they can save homeowners and commercial customers money. (It is important to note that GHPs are not related to air-source heat pumps that rely on heated air.) The ground-sourced heating pumps use the natural heating storage capacity of the earth or ground water to provide energy efficient heating and cooling year round.

Expect to pay between $4,000 and $11,000 more for a 3-ton GHP system than for an air source heat pump system. Many consumers justify this initial investment with the tax credit combined with the savings they expect to realize on their heating and cooling bills over years of use.

The benefits to GHPs are that they offer high efficiency and low operating cost. According to the EPA, GHPs can save homeowners 30 to 70 percent on heating and 20 to 50 percent on cooling costs over conventional systems. Reported heating and cooling savings can range between $358 and $1,475 annually.

A GHP system consists of indoor heat pump equipment, a ground loop, and a flow center to connect the indoor and outdoor equipment. The heat pump equipment works by removing heat from one location and depositing it in another location. The ground loop, which is invisible after installation, allows the exchange of heat between the earth and the heat pump.

Ground source heat pump systems are among the most energy-efficient and environmentally-friendly heating, cooling, and water heating systems available, according to the US Department of Energy (DOE) and the Environmental Protection Agency (EPA).

Major benefits include:

1. Lower cooling and heating costs
2. Lower maintenance
3. Natural and safe
4. No chimney or flue, no combustion
5. Investment recouped in approximately five years

GHPs can be open- or closed-loop. Open-loop systems draw well water for use as the heat source or heat sink, and after use, return the well water to a drainage field or another well. Closed-loop or earth-coupled systems use a water and antifreeze solution, circulated in a ground loop of pipe to extract heat from the earth.

Ground loops can be installed in a vertical well or a horizontal loop. Vertical wells are usually more expensive and used where space is limited. The length of loop pipe required will vary with soil type, loop configuration, and system capacity. Loop length can range from 250 to 1,000 feet per ton of capacity.

IRS Form 5695: Residential Energy Efficient Property Credit

More information on the "Residential Renewable Energy Tax Credit"

Questions? Or just want to chat about an upcoming project that you're considering? Email owner Chris Matey.
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We service Boston, North Shore, North of Boston, including but not limited to Andover, Belmont, Beverly, Boston (Back Bay, South End), Brookline, Cambridge, Haverhill, Lexington, Lowell, Marblehead, Natick, Newton, Newburyport, Somerville, Swampscott, Weston, Winchester, Woburn. As well as southern New Hampshire, including Nashua, Londonderry, and Merrimack.

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