If you’ve been considering installing a new heating and air system in your home, you may have happened across geothermal heat pump systems and wondered if they are right for you. 

This article is intended to offer some aid in your initial research of geothermal heating and cooling system and answer some of the primary questions that we hear most often. 

These questions include: 

  • How does a geothermal heat system work?
  • What is a geothermal heat pump?
  • How much does a geothermal heating and cooling system cost for installation?
  • What are the monthly costs associated with a geothermal heating system? 
  • How long do geothermal systems last? 
  • And finally, how much money can you save by using geothermal energy?

With our in-depth experience in geothermal heating and cooling system installation and repair, we’ll offer our advice and expertise to answer these questions and more. 

How Geothermal Heat Works

The guiding principle behind geothermal heating and cooling systems is the fact that below the earth’s surface, the temperature remains relatively constant throughout the year. A geothermal heat pump transfers heat inside the soil or groundwater into your home during winter and out of your home in the summer. 

A geothermal heating and cooling system consist of two primary components: a heat pump which sits inside your home and underground pipes called ground loops in your yard. The heat pump circulates a water-based solution through underground loops where it absorbs the ground’s heat. The solution carries this heated water back up to the heat pump. 

The heat pump contains a compressor, condenser, and evaporator. When the heated water reaches the heat pump, it exchanges its heat with liquid refrigerant, which becomes vapor. That vapor then enters the compressor where its temperature is raised by increasing the pressure.

In the final step, this hot vapor enters the heat exchanger, where it transfers heat to the air, which is then distributed throughout your home via ductwork. 

What is a Geothermal Heat Pump?

The geothermal heat pump is the workhorse of the heating and cooling system. It’s critical to size the heat pump correctly to meet your home’s heating and cooling needs. 

Geothermal heat pumps are measured in terms of tons, which is a measure of how much heat it can move in one hour. A single tone is equivalent to around 12,000 BTUs. 

Types of Geothermal Loops

There are three common types of geothermal ground loop setups, including the horizontal system, vertical system, and pond/lake system. 

Horizontal system

The horizontal system consists of layer coils that are placed in 6 foot deep trenches. Because of the easier excavation, the flat looping system is often the cheapest. 

Vertical System

Vertical looping systems are more common when space is limited. They consist of four-inch diameter holes drilled 100 to 400 feet deep. 

Pond/Lake System

As the name implies, these loops are set up in water rather than soil. Water covers the coils which are anchored 10ft deep. 

Geothermal Heating and Cooling System Installation Cost

Many times, consumers believe that a geothermal heating and cooling system will be too expensive for them to afford. When compared with the cost to replace a traditional HVAC System with add-ons (add-ons include functions like variable-speed fans, whole-house humidifiers, or UV lighting), the cost of the equipment itself is comparable. However, where geothermal heating and cooling systems tend to get expensive are the installation costs, which include plenty of excavation costs. Let’s first take a look at the cost associated with your typical HVAC installation or replacement. 

On average, you should expect your HVAC installation costs to range between $6,000 and $12,000, with a national average price of $9,500. This includes new ductwork, a new central air conditioner, and a new gas furnace. 

It is essential to keep in mind that the price of a new HVAC system depends mainly on the size of your home, which brand of equipment that you choose, and the efficiency rating of the new HVAC unit, as well as the amount of ductwork and labor expenses. Now, let’s look at the comparative costs of a geothermal heating and cooling system. 

 The national average in 2019 for a geothermal system costs ranged from $3,500 to $12,500. Factoring in the excavation costs of drilling and digging is really where the installation costs exceed that of a standard HVAC system and can bring the total cost of the geothermal system installation to $20,000 to $25,000. 

Some of the factors that will factor into the total price of your geothermal system are the square footage of your home, the type of geothermal system that you utilize, the soil composition and climate of your location, and local regulations and open-loop regulations. 

Additionally, you’ll need to acquire a permit for your geothermal system from your local municipality, which could take weeks and upward to months, and comes with a fee ranging from $100 to over $1,000. 

One of the best benefits of the geothermal heating system is its maintenance cost. The heat pump accounts for the majority of all repairs or maintenance and averages out to be around $350 with simple maintenance issues that cost $80 up to compressor replacement, which is closer to $1800. 

Monthly Costs for Geothermal Heating Systems

The high equipment and installation costs aside, geothermal heating systems are very cheap to operate and don’t require high monthly fees. Because they simply transfer heat without burning fuel, homeowners can see a 60% to 70% decrease in their monthly utility bills. Geothermal heating systems usually end up paying for themselves in as quickly as five years. 

Geothermal Financing and Rebate Programs

With a steep initial price tag on the geothermal equipment and installation, most homeowners look for government tax credits and other rebate programs to offset the high up-front cost. As of 2019, there are several geothermal incentives for Tennessee homeowners. The Federal Geothermal Tax Credit allows homeowners to claim 26% of the amount spent on purchasing and installing geothermal heat pump systems from their 2020 federal income taxes. This tax incentive decreases in 2021 to 22%. If you don’t owe enough in taxes to cover the entire amount, you can rollover the remaining amount over to the next year and can continue to do so as long as the tax credit is active.   

Depending on where your Tennessee Geothermal system is installed, you may be eligible for several additional state financial incentives such as sales tax incentives, property tax incentives, and clean energy loans and grants.

Benefits of Geothermal Heat

Geothermal systems have an abundance of benefits. Not only do they use clean, renewable energy, but their operating costs are substantially lower than conventional heating and cooling setups. Additionally, geothermal heating and cooling systems can be installed in new construction or existing homes and office buildings alike. 

Geothermal systems also last longer, with the indoor heat pump and components lasting of average ten years longer than a furnace or conventional AC unit. Because the actual looping system has no moving parts, they generally last upwards to 50 years or more. 

Geothermal systems are must quitter than other types of cooling systems as they have no outdoor compressor or fan. The indoor unit is about as loud as a refrigerator. 

As aforementioned, geothermal systems are more affordable to operate. The overall operating costs are drastically lower with a much higher efficiency rating. 

Lastly, geothermal heating and cooling systems are incredibly safe to operate. There is no combustion involved; therefore, carbon monoxide leaks are not a concern. 

Get a Geothermal Heat System Quote

There are many more configurations and compressor types to consider when designing your geothermal system we could fit into this article. You should contact a local heating and cooling contractor to discover more about the optimal system for your home and property. City Heating and Air Conditioning in Knoxville, TN offers geothermal heating and air system repair and installation in new construction, existing homes, and commercial buildings. Contact us today at (865) 938-1005 or online for more information about geothermal heating and cooling systems or to schedule maintenance on your existing system.