Homes Are Moving to Geothermal Heat Pumps (and Enjoying Tax Credits)

If you’ve ever lived in an old building with a clanking radiator or a home that needed to install in-window A/C units every summer, you know that not all heating and cooling methods are made equally. Modern HVAC systems are far more powerful and efficient than traditional methods, but a newer, eco-friendly alternative has picked up its share of advocates lately, and with good reason: geothermal heat pumps.

Geothermal heat pumps are environmentally friendly, energy-efficient, and, at least for the near term, can make homeowners eligible for a sizeable tax credit. Recent advances in heat pump technology have increased its popularity and availability across the world. It’s common to see them across the Eurasian continent, for example in Norway where 60 percent of buildings use heat pumps; they’ve overtaken gas furnaces when it comes to U.S. sales, too.

So what are heat pumps, why are they beneficial compared to other methods of heating and cooling, and should you take the leap and install one in your home?

What are heat pumps and how do they work?

Heat pumps use electricity to move heat from one place to another. In the case of geothermal heat pumps (GHPs), those places are your home and underground. That’s because temperatures below the surface don’t change much regardless of the season. In most cases, the underground temperatures will be warmer in the winter than it is in the open air, and cooler while aboveground boils in the summer heat.

By utilizing the earth as a heat source in cold weather or a heat sink in the summer, a system built underground that connects to a home can move heat out of the house or into it as necessary to keep the temperature inside at a comfortable level. Pipes carry liquid that absorbs and releases heat accordingly, and the cooled or heated air is then distributed throughout a building. While the setups of different heat pump systems may vary, in many cases they are compatible with the ductwork already present in most homes.

The benefits of using geothermal heat pumps

If you have a working HVAC system already, you may be tempted to ask: why change over? Are heat pumps that much better than conventional systems and worth the switch? While the answer to that may depend on what you’re currently using in your home, the benefits are significant in any case:

• Energy efficiency. Geothermal heat pumps need much less energy to heat or cool a home—up to 80 percent less in some cases—since they don’t rely on combustion the way gas furnaces or water heaters do. This makes it easy to achieve…
• Cost savings. That reduced energy requirement translates to a cheaper monthly energy bill compared to most other heating and cooling methods. Especially as energy costs continue to rise, even small increases in efficiency can save significant cash. Also helping you save money in the long road is that geothermal heat pumps tend to have a…
• Long lifespan. According to the U.S. Department of Energy, geothermal heat pumps have an average lifespan of over 20 years (and the underground infrastructure could last for up to 50 years!). That means less maintenance costs related to fixes, upgrades, or replacements.
• Environmental friendliness. To top it all off, heat pumps don’t use fossil fuels, making their carbon impact extremely minimal. They simply move heat around rather than create more of it. Since any physicist will tell you that heat tends to want to move on its own already, by simply guiding that heat where we want it to go, heat pumps require very little energy and operate with high levels of efficiency.

Those with inefficient or older heating and cooling systems, or units that frequently break down and need unplanned maintenance should closely consider upgrading to geothermal heat pumps. HVAC systems do have limits to how long they can go without being replaced, and it’s always a solid decision to pick the most efficient and future-ready option when replacing major equipment in your home.

There’s More to Save: The Residential Clean Energy Tax Credit

While the one downside to geothermal heat pumps is their higher upfront cost to acquire and install a unit, a few factors help offset that cost fully within time. 

First off, the U.S. Department of Energy suggests that any additional upfront costs for geothermal heat pump units will be recouped via energy savings within five to ten years. Second, the Residential Clean Energy Credit, put in place to encourage investment in renewable energy for residential homes in the areas of solar panels, wind turbines, and the like, has a provision for geothermal heat pumps.

The tax credit for geothermal heat pump installation is 30% for new and existing home installations put into service before the end of 2032. The credits continue through 2034 but at lesser rates. Now, we have to mention here that we’re not tax professionals, so don’t take this section as professional tax or investment advice—but we highly recommend you check out the details of the program and its requirements and speak with your own tax expert or accountant about whether or not you can take advantage of this credit.

Call Us Today to Learn More About Your Geothermal Options!

We’ve been installing and providing routine maintenance for the region’s heat pumps for many years. Even before the wave of eco-friendly heating and cooling solutions took off, our commitment to environmentally friendly (and wallet-friendly) solutions made us experts in this technology and one of its earliest adopters.

There’s no better team to trust as you take the first step into your energy-efficient, geothermal future. Drop us a line today to discuss if a heat pump is right for your home and let us get you started!