The geothermal market is growing, which comes as no surprise to Mike Kapps, vice president of WaterFurnace Loop Operations in Indianapolis. During the years he has been affiliated with the company, Kapps has watched WaterFurnace grow from a company that did a few million dollars a year in geothermal systems to one that, today, reports annual sales of more than $90 million.
Kapps is quick to identify reasons for this growth. He cites rising energy costs and the subsequent search by consumers and business owners for less expensive alternatives to oil and natural gas to heat their homes and facilities as one important reason.
At the same time, homeowners and facility operators, who are increasingly more conscious of their environment, are turning to green systems that have less impact on the environment than do traditional heating and cooling systems. According to Kapps, “Geothermal technology is one of the best technologies out there. In fact, the installation of a geothermal system represents one of the easiest ways to help a commercial property owner secure Leadership in Energy and Environmental Design (LEED) certification.”
Geothermal heat pump technology taps into the moderate temperatures found just a few feet below the earth’s surface, and uses this relatively constant, renewable source for heating, cooling and hot water. A water-based solution is circulated through a loop system of underground pipes.
During heating, the solution absorbs the heat from the earth and transports it to the geothermal units in the building, where the heat is absorbed by a refrigeration system. Using refrigerant-to-air technology, the heat is distributed throughout the building. During cooling, the process is reversed, extracting the heat from inside the building and replacing it with cool, dehumidified air.
Geothermal technology lends itself to both commercial and residential installations. At WaterFurnace headquarters, for example, a pond-loop system and 41 WaterFurnace units provide all the heating and cooling for the 115,000-square-foot facility. In addition, the company uses radiant heating coils beneath its sidewalks to melt ice and snow in the winter, eliminating the need for salt and the time and effort to shovel.
Homeowners who install geothermal systems realize many of the same benefits commercial facilities enjoy, including lower operating costs for heating, cooling and hot water, enhanced comfort and humidity control, quiet and reliable operation, and having an environmentally friendly system. According to Kapps, a home that uses geothermal systems is up to 70 percent more efficient, depending on the price of fuel and where the home is located. “These are the benefits we provide to homeowners,” notes Kapps, adding, “We’re seeing residential sales of geothermal systems grow in both the new construction and retrofit markets.”
As a result, Kapps sees an increase in the number of drilling contractors who are getting into the geothermal market as a way to diversify their business. However, the demand for loop contractors continues to grow.
The growth of the geothermal market also has created a demand for drilling contractors – either as part of a turnkey operation or as independent subcontractors – who drill the necessary holes, install the loop and move on to the next job. “It’s a huge opportunity for drillers,” Kapps says. “Although this type of drilling may pay less per foot than a typical well drilling job, the average job is 600 feet – four 150-foot boreholes.”
Kapps advises contractors who want to include geothermal systems as part of their product offering to talk with their local utilities and heating, ventilation and air-conditioning (HVAC) dealers. Some utilities offer rebates for the installation of geothermal systems. These rebates range from several hundred to several thousand dollars. In addition, the federal government offers builders tax credits as high as $2,000 if new residential construction meets or exceeds conservation code standards. Homeowners, too, may qualify for federal tax credits of $300 when they install geothermal systems. The government also provides incentives to commercial property owners who specify geothermal systems for their buildings.
Contractors also should become familiar with local codes and state regulations that pertain to geothermal systems. According to Kapps, many states regulate the installation of loop fields and how they are backfilled. States that do not have regulations or codes often enforce the standards of the International Ground Source Heat Pumps Association (IGSHPA).
As WaterFurnace keeps pace with the increased demand for geothermal systems, the company continues to improve the systems it offers. “Our Envision series is the first geothermal system to offer a 30 energy efficiency ratio (EER), the highest efficiency rating in the market,” Kapps explains. “This compares to ratings in the mid-20s for most geothermal systems, and a 13 to 14 seasonal energy efficiency ratio (SEER) for non-geothermal systems.”
The system uses a single two-speed scroll compressor to provide the correct amount of heating and cooling to a home. The series’ wide range of products address the diverse needs of a variety of applications. “As a result, we’re able to sell units in the Caribbean and in Canada, serving two very different climates,” explains Kapps. “It really is a global technology that takes us around the world.”
In fact, Europe embraced geothermal technology before the United States, most likely as the result of higher energy costs there. Today, according to the European Union, ground source heat pump installation is up by 20 percent. WaterFurnace also is making inroads into the Chinese market, and exploring opportunities in South Korea, where the government is committed to considering geothermal technology with each new building project.
“Geothermal systems definitely are a significant investment for consumers and building owners,” asserts Kapps. “But, as heating and cooling costs continue to increase, people are learning about the technology and recognizing the benefits it offers. It’s exciting to be part of a worldwide industry that promotes an energy-efficient technology that is also good for the environment.”