Cost of Geothermal Energy

To be completely accurate, the cost of geothermal energy is free. It costs nothing. It is harnessing that energy that comes with a price tag. However, you can not simply look at the price by itself. You have to consider the savings over your traditional heating or cooling system and include in your calculations the government, state, community and electric company incentives to see how geothermal energy costs compare. That will give you the real picture of the cost of geothermal energy.

Industry experts define the costs of a system and installation to be approximately twice what you would pay for a traditional gas furnace and air conditioning system.

Use these amounts as ballpark figures, they are averages and different parts of the country will have different prices. The up front cost of geothermal heat pump system includes the cost of the system and installation. An average geothermal heat pump will cost about $7500 for a three ton unit, which is the standard residential sized unit.

The installation of the loop system can vary broadly from as little as $4,000 to $30,000 depending on the amount of land available, the type of soil or if a water source is available. This is where several estimates will give you a better idea of the true cost of your system.

When compared to your traditional gas or electric heating and cooling system a geothermal unit is more expensive. However, in operation costs, a geothermal unit will save you about 30 to 70% on energy costs throughout the year. The up front cost of the unit will be recovered over 2-10 years and the unit will pay for itself through energy savings.

The government, states and communities offer generous incentives and rebates to install alternative energy in your home. Even some electric companies are offering incentives to homeowners making the switch. These savings reduce the cost of geothermal energy in a significant way, 30% or more. Before purchasing, make sure the system you choose is eligible for these programs.

Geothermal energy offers you a great solution to high energy bills. Everyone is tired of paying such high and unpredictable costs to heat or cool their home particularly if you live in an area that has long winters and hot humid summers.

Having a home with an alternative energy source increases your home's value and makes it easier to sell. Homebuyers are eager to see homes with alternative energy sources and willing to pay more.

Financing Options

A home equity loan is, of course, an option and with the favorable mortgage rates, this may be an attractive option for you. Look into an Energy Efficient Mortgage (EEM) and review financing options with your contractor.

If heating and air conditioning costs are a significant portion of your energy bill, this is an option that can be very cost effective. When you think about the cost of geothermal energy, you also have to consider the price you pay, and that we all pay, for other energy sources.

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