Interested in Geothermal? Let’s Look At The Numbers

The first question many of our client’s ask after we suggest they look at Geothermal systems is, “How much does it cost?” There seems to be a misconception out there that Geothermal is only something that very wealthy people can afford and if you don’t fit in that category then Geothermal is not something to consider. Well, I am here to set the record strait and let you know that Geothermal is something that many homeowners can afford and the idea that Geothermal is only for the wealthy is just plain WRONG!

I will say that the initial cost of installing a Geothermal system is more than that of a conventional system and when some people see the cost of the initial install it can be a bit of a jaw dropper but when they sit down and look at the numbers and the amount of time it takes to get a return on your investment then it all starts to make sense.

I’ve created and example of a price analysis that we might include in a proposal to a perspective Geothermal client. The analysis was created for a new, 2,500 sf home.

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!