Geothermal heat pump systems have been an excellent value in the past, but factors unique to today have created a “perfect storm” of business opportunity for those willing to design and install them, said presenters at the 2009 Geothermal Diversification and Drilling Forum.

This theme was echoed by presenters at the forum, which ran concurrently with the National Ground Water Association (NGWA) 2009 Ground Water Expo and Annual Meeting.

Todd Giddings, Ph.D., PG, said that the following factors have converged to create a perfect storm of business opportunity:
  • A “green” movement of consumers toward alternative energy and energy conservation technologies
  • The current and anticipated costs of fossil fuels
  • The availability of new federal geothermal residential and commercial tax credits.
Giddings cited the example of a water well system contractor in his home state of Pennsylvania to demonstrate the business potential of geothermal work.

“His family company still drills water wells, but last year, geothermal work accounted for 80 percent of his business,” Giddings said. “The kicker is that his geothermal work has grown in the recession. He just took delivery of his second drilling rig to handle the geothermal work, and he has the business to support it.”

Giddings, who owns and operates Todd Giddings and Associates Inc. in State College, Pa., said some water well system contractors are moving beyond just drilling geothermal boreholes to taking on other aspects of geothermal heat pump system installation, sometimes subcontracting the HVAC work.

“These water well contractors are now bidding on the whole geothermal job,” he said.

 Keys to successfully entering the geothermal market include technical training and the skills to market these systems. Both are readily available, but many contractors are reluctant to get outside their comfort zone to seek them.

Part of marketing geothermal systems to residential and commercial customers is helping them to understand how the federal tax credits work, said Giddings.

“The residential customer who has a $20,000 bill for geothermal work is going to get a check for $6,000 (a 30-percent tax credit) from the federal government. While the tax credit for commercial work is 10 percent, a business owner is entitled to accelerated depreciation," said Giddings,

Although the installation of geothermal heat pump systems often is associated with new home construction, Giddings said that there is a growing market for retrofitting existing homes with geothermal systems.

“Contractors can even retrofit their homes or businesses, and use it as a showpiece for potential customers,” said Giddings, who has done this himself.