1. Install of a conventional 15 SEER system – $12,500.00
2. Additional cost for Geothermal – $19,500.00
3. Total Investment to install Geothermal – $32,000.00
4. 30% Federal Tax Credit – $9,600
5. Total additional cost for Geothermal after tax credit – $9,900.00

After the tax credit the total additional investment in a Geothermal system is $9,900.00. Yes, that still seems like a bit more but now let's look at how fast you will receive a return on that investment. On average a Geothermal system has a life span of twenty years compared to a conventional system which on average of 15 years. So above you saw what you have to pay out but let's take a look at what you will get.

1. Average monthly savings in your electric bill  - $325.41
2. First year savings – $2,361.86 (or 33 trees)
3. First year ROI – 23.857%
4. Estimated lifetime savings – $78,097.29 (or 661 trees)

After the third year you will have saved $7,445.78 by using Geothermal and by the fourth year $10,179.93, which means that you have seen a 100% ROI by the fourth year of using your Geothermal system. So now not only are you doing what is best for the environment you are doing your wallet a favor too!

One of the bigger financial benefits of installing a geothermal system is the tax credit that you will be eligible to receive. When the Energy Improvement Act of 2008 was passed it offered a one time tax credit of 30% of the TOTAL investment for homeowners who install residential ground loop or ground water geothermal heat pumps. So let’s say for instance you install a geothermal system at your home and the total cost is $32,000.00 the tax credit that you will receive is $9,600.00! That’s not bad! Doing what is best for the environment and getting money back from Uncle Sam to do it!

To qualify for the credit the system must meet or exceed EnergyStar requirements and be installed after December 31,2007. Units that were installed in 2008 are subject to a $2,000.00 cap on the credit. If the unit was installed from 2009-2016 then the homeowner can take advantage of the full 30% uncapped credit. Covered expenditures include labor for on site preparation and assembly or original system installation and for piping and wiring to connect the system to the home. The structure must be located in the United States and used as a residence by the taxpayer, although primary residency is not required.

Homeowners can file for the credit by completing tax form 5695, which has yet to be published for the 2009 tax year. The tax credit can be used to offset both regular income taxes and alternative minimum taxes. If the federal tax credit exceeds tax liability, the excess amount may be carried forward into future years. The tax credit will be available until December 31, 2016.

This tax credit “The Energy Credit” can also be applied to solar-electric systems, solar water heaters, and wind turbines. If you are thinking about using alternative energy sources then this is a good time to move forward. The tax credit gives you a little bit more incentive to “Go Green” with your energy systems.

For more information and to see a draft of the Form 5695 you can visit the IRS website.

 Geothermal heat pumps help electric utilities see significant reductions in their demand loads and by reducing the demand in turn reduces the need for new power plants which then reduces the need for natural resources like coal and gas. Geothermal heat pumps also reduce the possibility of acid rain, air pollution and global warming- problems caused in part by the burning of fossil fuels. A 2,500 square-foot home with a geothermal system installed saves the electric company from having to burn more than nine additional tons of coal a year when comparing it to a conventional system.

It has been estimated ny the U.S. General Accounting office that if geothermal systems were installed by more of the population then they could save several billion dollars annually in energy costs and also reduce pollution. Something to think about is that for every 100,000 residential geothermal systems installed, more than 37.5 trillion BTU’s of energy used for space conditioning and water heating would be saved. This translates to an emissions reduction of close to 2.18 million metric tons of carbon equivalents and a cost savings to consumers of about $750 million over the 20-year life of the equipment. Geothermal heat pumps also reduce the need for foreign oil. For every 100,000 homes with a geothermal system there would be a reduction in the need for oil by 2.15 million barrels annually.

Geothermal systems are beneficial for the earth, the economy as well as your own home!

In residential central heating and cooling systems, the conditioned (heated or cooled) air is delivered to each room of the home through a "supply" duct system, the first half of the duct system. These ducts are used as pathways to deliver air to each room in the home and the "return" duct system or second half of the duct system, returns air to the heating and cooling system. The condition of both duct systems is vital to the overall efficiency of the heating and cooling system and the comfort levels in each room of the entire home. 

Energy loss is not the only concern, duct systems can also affect the indoor air quality of a home. If the return duct system is leaky, it could be drawing stale or polluted air into the duct system and distributing it throughout the home. This air could come from an attic, combustion air from the gas furnace, stove, water heater, or the outside. If the supply duct system is leaky, the home can become depressurized and air from outside may be drawn into the home through infiltration. Either situation may contribute to breathing problems such as allergies and asthma.

Now that you know that duct systems can affect both energy usage and indoor air quality, how do you know if your duct system is in good condition? The most reliable and cost-effective way to determine this is to have a "duct test" using the proper test equipment. Duct testing is the process of using calibrated mechanical equipment to measure the amount of airflow that is lost through the duct system when it is pressurized to its normal operating pressure. While some joints or seams may have only small leaks, other sections may be completely disconnected.

Duct testing can indicate the relative leakiness of the ducts and help determine if the duct system should be sealed, repaired, or renovated. Duct testing is strongly recommended when a new heating and air conditioning unit is being installed. If the existing duct is leaky and inefficient before the new unit is installed, it will still be leaky and inefficient after the new unit is installed unless the ducts are sealed. It does not make sense to install a new energy efficient heating and air conditioning unit unless the duct system is also energy efficient and provides the correct amount of heated or cooled air to each room.

1. Operating Cost – While the initial cost of installing a geothermal system can be expensive the return on investment is well worth it. It is estimated that a geothermal system can pay for itself within 5-7 years.  “A geothermal heating system operates more efficiently than a conventional system because they can deliver an astounding four units of energy for every one unit of electrical energy used. That translates into an efficiency rating of 400%, compared to the most efficient gas furnace, which rates only 94%.”  Many homeowners have seen as much as a 70% savings in energy costs after they install a geothermal system.  Not only could you save on your energy bill you would also be eligible for a 30% federal tax credit. Homeowners who install a geothermal system in 2009 - 2016 will receive a federal tax credit of 30% of the total investment. For example if the cost to install the system is $10,000 then a tax credit will be issued for $3,000.00. So not only are you saving money on operating costs you are also receiving money back from the government! Can’t get much better than that!

2.Environmentally Friendly – According to the Department of Energy, geothermal systems are the most environmentally friendly way to heat and cool your home. A geothermal system emits no carbon dioxide, carbon monoxide or other greenhouse gasses that are known to pollute the air. A geothermal system also completely eliminates the heating system as a potential source of carbon monoxide in your home. With the addition of high efficiency air cleaners, you will have a high level of indoor air quality. A geothermal system is environmentally friendly as well as a safe and healthy alternative to conventional heating and cooling systems.

Geothermal technology uses the earth’s renewable energy, located below the earth’s surface to heat and cool your home. A few hundred feet below your home the earth’s temperature remains a constant 45 to 70 degrees Fahrenheit.  Wells are drilled around your home at a depth of 250-300 feet. Pipe is then dropped into the holes which creates a loop.  Fluid is circulated through the pipes. The fluid, which consists of water and non-toxic antifreeze, absorbs the heat from the earth and carries it through the pipe, to a heat pump located in the house. The heat pump circulates the warm air/cool air into the home. In the summer the process is reversed. The heat is transferred from the air in the house by the heat pump. Then heat is the then transferred back to the earth via the water-antifreeze fluid that is running through the pipes.  Geothermal heating and cooling is the most efficient and environmentally responsible way to heat and cool your home!

The Geothermal installation process is more complex than conventional H.V.A.C. installation, but well worth the time. The first thing that must be decided is how many tons of air conditioning your home requires. Once that number is calculated the engineer will determine how many geothermal wells will be drilled. The drilling equipment is then brought in and the wells are drilled. Horizontal, vertical and pond loops are the three most used in the United States. In Texas it is recommended, because of the temperature and rocky soil conditions, that vertical loops are used. The drilling of the each loop takes on average anywhere from 4-8 hours. Once the drilling is complete, pipe is dropped down into the holes and is looped back to the surface.  Next the headering process begins. This is where the loops are connected to the equipment. Once the header is attached to the equipment and pumps it is then purged in order to remove all of the air from the system. When all air has been removed the equipment is ready to be started.

Photo credit: sunshinecity

Take advantage of the tax credit available for purchasing a qualified energy-efficient exterior door or window by  December 31, 2010.  In short, the door must meet a U Factor and SHGC rating of 0.30.  Congress raised the per-item credit to 30 percent of the cost up to $1,500.  They also extended the deadline for making the improvements through the end of 2010.  If you have already purchased a qualified efficient door or window you are not left out.  The act is retroactive to Jan. 1, so if you installed a product meeting the previous criteria it qualifies for the larger credit. 

Seventy percent of the GHG emissions related to single-family envelope energy consumption can be attributed to homes built before California had an energy code (1983).  The statewide carbon impact of retrofitting these homes with upgraded energy features was explored.  Spending $10,000 retrofitting a 1960s home could save 8.5 tons of carbon at a cost of between $588-$1,176 per ton (…)  Increasing the energy efficiency of a new home by 35% would cost about $5,000 and would reduce emissions by 1.1 tons at a cost of $4,545 per ton. Retrofitting existing homes with energy-efficient features is four- to eight times more carbon- and cost-efficient than adding even more energy efficiency requirements to new housing.

 Not all ENERGY STAR rated doors qualify, contact BMC West for assistance.  Visit energystar.gov for credits in solar-energy panels, water heaters, geothermal heat pumps, small wind-energy systems and fuel cells as well.