Pumping Up Efficiency: Builder Grounds Business on GHPs PATH Case Study

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Some of the homes that Ritchie built in The Commons. According to the US Environmental Protection Agency, GHPs can save homeowners 30 to 70 percent on heating and 20 to 50 percent on cooling costs over conventional systems. The initial cost of a GHP system varies greatly with local labor rates, lot geology and size, and the type of system installed. On average, a builder could expect to pay between $4,000 and $11,000 more for a 3-ton GHP system than for an air-source heat pump system. Due to the investment, GHPs makes the most sense in areas where the temperatures are low in the winter and high in the summer. "On a 2,000-square-foot house, it can cost about $4,000 more to install a 3-ton GHP system around here, but it depends on what you're comparing it with," says Lloyd Klassen, owner of Lloyd's Heat and Air and Ritchie's long-time HVAC subcontractor. "If you're comparing to a bottom-of-the-line gas furnace and air conditioner, it might be a little bit more than that. If you're comparing it to a quality high-efficiency furnace and air conditioner, there's not a whole lot of difference in cost. The real difference, in that case, is the drilling. That runs about $1,200 a ton of GHP capacity. "On that size home, we'll put 2-1/2 tons of capacity in, which is less tonnage than air-to-air systems because the efficiency of GHPs is not adversely affected by varying outdoor temperatures," says Klassen. "The geothermal system relies on 62-degree well water, compared to the air unit, which has to handle 100-degree temperatures in the summer in Oklahoma. That means about a 20-percent increase in capacity over air units." The houses are energy-efficient, beautiful and affordable. "When David switched to geothermal, the quality of his homes was then recognized as being above and beyond what else was in the marketplace," says Mike Newcombe, an OG&E program development coordinator. "With the things that he's done, he's now considered the premier builder for energy efficiency in the Enid area." "For somebody who doesn't know a lot — which is where I started — I advise that you find yourself a good contractor that you can work with and that you trust completely," Ritchie says. "Make sure the guy has some experience. My HVAC contractor has pulled me out of the fire more times than you can shake a stick at. When you first start putting GHPs in, you need somebody who's good and who's going to take care of you. Eventually, you get to a point where you are comfortable with geo, but it takes time." Making it affordable While residential GHPs cost more upfront than other HVAC systems, more than 20 states offer incentives programs to help offset the cost if the system is part of an energy-efficient home. For example, Oklahoma allows a contractor who is the primary builder of an energy-efficient home substantially completed after December 31, 2005, to claim an income tax credit beginning in 2006. The contractor can take a tax credit for the amount of the eligible expenditures, not to exceed $2,000 for a home that is between 20 percent and 39 percent above the 2003 International Energy Conservation Code, or $4,000 for a home that is 40 percent or more above the code. Find incentive programs in your state through the Database of State Incentives for Renewable Energy (DSIRE). PREVIOUS  1 | 2 | 3  NEXT