News

As costs decrease, geothermal is on the rise

Drillers prepare to drill bore holes for a geothermal district energy system.

A home heating system that uses renewable energy sidesteps rising prices for gas and electricity, also provides cooling, and operates without dust or noise.

There are good reasons why geothermal home heating systems have long been regarded as a great option. The trouble is, they've been too expensive for most buyers, so mainstream builders have stuck with traditional forced air or electric baseboard options. Now, that's changing.

"Normally, you'd want to be up to the $800-900,000 mark before you would be able to include it," says Doug Larson, Project Manager with The Limona Group based on Vancouver Island. Geothermal exchange units have typically run $30,000-40,000 in custom built homes. "But with the amount of units we were building, we were able to negotiate and bring that price down quite a bit."

Limona Group included geothermal heating in their Thetis Vale development, offering it as a standard feature for 43 townhomes, and an option for single family homes.

"There's a lot of greenwashing these days and we wanted to put out a product that was truly green," says Larson. "By using the geo system we got to where we needed to be. I think every single one of the houses so far has rated in the high [Energuide] 80s, which means they achieved the [BuiltGreen] platinum grade."

For The Maskeen Group, based in Surrey, adding geothermal is a way to stand out in a crowded market.

"One of our company's owners put it into his own residence, and he just loves the air quality and the heating and cooling," says Grant Copland, Maskeen's Project Manager. "He wanted to differentiate from what the competitors are doing, because we work in areas where there's quite a saturation of product.

"So when people are comparing apples to apples, we hope they can see we're a nice sweet orange."

Maskeen has now incorporated geothermal in about five projects, both townhome and single family developments.

The market says yes

Even though geothermal heating technology has been around for more than 50 years, its use in homes is still so rare that few buyers have experienced what it offers. Copland and Larson say that means some extra education is needed – but the buyer response is positive.

"They absolutely love it. Everyone in the development can't talk enough about it," says Larson of Limona's new homeowners. "They love the air conditioning in the summer, they love the heating in the winter. It's a very comfortable heat, and the units are ultra-quiet. If you don't even notice that your heating or cooling system is on, and you're comfortable in your house all the time, that's a great thing."

Copland agrees. "We do a fair amount of customization in our developments. That way, if we're in a downturn, we're in a situation where our product is going to sell.

"Our Kennedy Trail development is an example. It came online at the end of 2008, and everyone knows what was happening in the economy. We were very resilient and we managed to sell out in that time period. I attribute that in part to the additional details and options – one of which would be the geothermal."

Copland and Larson say geothermal appeals to buyers for various reasons. Some are keen on the comfort it offers; some want to live out their green principles and be "off the grid" where possible. Others want to protect against future increases in prices for gas and electricity. And some view an investment in energy efficiency as a way to protect their home's resale value.

Both builders have had to work on finding the right marketing message to attract buyers. Limona tells buyers interested in the optional geothermal upgrade – priced at approximately $17,000 – that they will recoup their investment in about seven years based on average home usage.

Maskeen is experimenting with a separate meter to the heat exchange system so they can describe how much energy it draws compared to what it saves.

"There was a certain amount of pain on our side, explaining it to the homeowners, because it's not a traditional forced-air system; it doesn't blow heat out at 130 degrees at the register," says Copland. "But with the Internet, people are quick to get online and figure out what it's all about.

"There are more and more people who are coming in and asking very technical questions, from structure to exterior cladding and right down into heating systems. I think in years past home buyers have been naive about these things, but that's not the case anymore."

Implementation: a learning curve

Installing geothermal systems means drilling deep into the ground (100-150 feet at Maskeen's projects) to install the piping systems that extract heat. (Horizontal installation is possible, but less common in home building applications where the area per home is limited.)

It also requires some changes to home design, to accommodate the different equipment.

"We're on a sharp learning curve here," says Copland. "During the construction process you're dealing with a whole new trade base. We've got drill rigs to be concerned about, and there's earth work that we're not normally dealing with. There are tailings from the drill; we have to be very careful with erosion and sediment control, detention ponds and so on. So that took some time to figure out, but we've managed to make it work."

"We checked out a lot of companies that offered geothermal before we decided who to work with," says Larson. "So we picked a company with a good track record and we got a lot of support. We had to create a room on the inside of each home and figure out duct work and drops and how to get ventilation and fresh air and all of that.

"So there was a learning curve but it wasn't too bad. We did our homework prior to jumping on board so we felt pretty comfortable with it."

Despite facing some challenges, both builders say there's more geothermal in their future.

"Yes, it was scary," recalls Larson. "We were spending $17-20,000 extra on these units, so in a fickle market, with the uncertainty with what happened two years ago, we were nervous about it. But we made a decision and we stuck with it, and I think it worked out in our favour, for sure."

"It is a big change, but I think it's what we're going to see more of," says Copland. "People have to be a bit more proactive about it – with energy costs the way they are, it's the future."