Geothermal Equals Peace of Mind

Monday, October 2, 2017

There are many benefits of ground source heat pump systems (GSHP). They are energy efficient and environmentally friendly. They provide comfort levels that are unmatched by conventional technologies. They are an in-home luxury that can be used for both spacing conditioning and domestic hot water generation.

GSHPs also provide price stability and financial peace mind. Month to month, GSHP heating bills are as reliable and predictable as the systems themselves.

Heating Bill? Well it Depends on the Price.

With a geothermal heat pump system, the amount of energy used to heat and cool a home can be cut by anywhere from 40% to 70%. As great as that sounds, the savings offered by a GSHP may not be enough to offset the upfront cost to install such a system in somes cases.

First cost relative to savings (typically referred to as simple payback) isn’t the only thing to consider. A prospective client should be aware of the fact that fossil fuel prices tend to jump around A LOT more than electricity.

Consider the following graph which shows the historical cost to deliver 100,000 Btu of heat energy to a home (based on the national average for energy prices by year since 2001).

Cost per 100,000 Btu by Heating Fuel and Year1

GSHP Operating Costs are Predictable

The cost to deliver 100,000 Btu with a GSHP has been steady since 2001, even though the average price for electricity has increased by over 40% over that time period. This just reiterates the fact that GSHPs act as a safeguard against inflationary energy prices.

The interesting thing to note is how much the cost to deliver the same amount of heat energy with competing fossil fuels has bounced around over the same time frame. Consider the following table which highlights the year with the highest average price (by fuel type) and the range of monthly average prices within that year:

Price Range by Fuel Type During Peak Year1

Fuel Gas Propane Oil GSHP
Worst Year 2008 2014 2013 2014
Average Cost $1.63 $3.53 $3.55 $0.81
Range $1.42 - $2.43 $2.92 - $4.95 $3.44 - $3.68 $0.78 - $0.86

Budget for the Winter

Assuming an average 2,500 ft2 home in Brookings, SD, this is what the heating bills could look like in January and through the entire heating season given the variability in energy prices during the worst year:

January Heating Bill in Brookings, SD1

Fuel Gas Propane Oil GSHP
Year 2008 2014 2013 2014
January Bill $210 - $360 $435 - $730 $510 - $545 $115 - $130
Annual Bill $1090 - $1860 $2240 - $3790 $2630 - $2820 $600 - $660

Given the amount of variability in price for fossil fuels, homeowners that rely on them for heat really have no way to predict how big their next heating bill might be. Life is full of surprises. The heating bill doesn’t need to be one of them.


  1. Prices based on national averages, EIA