Geothermal Heat Pumps: Cost and Installation

The Economic Stimulus Recovery act of 2009 removed the cap on residential geothermal heat pump systems. Homeowners can now receive a federal tax incentive equal to 30% the cost of a qualified geothermal heat pump system. See our System Pricing for more information.

The design and installation of geothermal systems are not do it yourself projects and therefore require the services of a professional. In addition, the integration of geothermal exchange systems with other systems in a home requires special expertise. Geothermal heating system price varies depending on the type of loop system, usually either vertical or horizontal. On average, a typical home of 2500 square feet, with a heating load of 60,000 BTU and a cooling load of 60,000 BTU will cost between $20,000 to $25,000 to install. This is around double the cost of a conventional heating, cooling, and hot water system, but geothermal heating/cooling systems can reduce utility bills by 40% to 60%.

The payback for a system can range from 2-10 years, while the lifetime of a system can be 18-23 years, almost double a conventional system. Additionally renewable energy systems add value to the equity of your home. There are US tax rebates for energy efficiency improvements, including a 30% federal tax credit, and many state and utility companies offer incentives. Visit the Database for State Incentives for Renewables and Efficiency at http://www.dsireusa.org to find incentives in your area.

Because of the upfront cost for installing geothermal heat pump systems, it is very common to finance these systems. Monthly payments for financing a geothermal system are very reasonable and can actually save a homeowner money as soon as the system is installed. Two examples of financing are listed below. For more information, including information on incentives and integrated systems cost, visit our web page on System Pricing.

Example 1 Project Cost: $25,000 Rebate / Down Payment: $5,000 Amount Financed: $20,000 Interest Rate: 7.99% Term: 240 Months Payment: $166.00

Example 2 Project Cost: $15,000 Rebate / Down Payment: $0 Amount Financed: $15,000 Interest Rate: 8.99% Term: 180 Months Payment: $142.50

Back to:

How Geothermal Heat Pumps Work Types of Ground Loops Benefits and Efficiency of Geothermal Heat Pumps

Excerpt from:
Geothermal Heat Pumps: Cost and Installation