9 Factors Affecting the Cost of a Geothermal Heat Pump

The geothermal heat pump system cost you pay will depend on these issues:

Water to Air or Water to Water: Most residential geothermal heat pumps transfer the heat into ductwork and circulate it with a blower fan. This is known as water-to-air operation or forced air operation. If the heat instead is transferred into a hydronic heat system for in-floor or baseboard heat, the system is known as a water-to-water system or a hydronic system. They can also replace the water heater. Water-to-water systems generally cost more for the same amount of heating capacity, though some average-quality systems such as those from GeoCool are competitively priced with water-to-air systems.

Package System vs. Split System: A package system contains the geothermal heat pump and an air handler, the best type for new construction. A split system can work with an air handler from an air-source heat pump it is replacing or with a gas furnace it’s replacing.

System Size: Residential geothermal heat pump systems range in size from 1 to 5 tons, or 12,000 BTU to 72,000 BTU; Commercial systems typically range to 10 tons. The size of the structure being served by the system, its design and construction and the local climate are among the factors affecting size. The larger your system is, the more it will cost. See our “Sizing” section below.

System Efficiency: All geothermal heat pump systems are in the Good-to-Excellent range in terms of efficiency, and the more efficient the system is, the higher its cost will be. The good news is that the opposite is true of operating costs – you’ll pay less in monthly energy costs for a very efficient model.

System Performance: Single-stage GHPs cost the least, but indoor comfort isn’t as good. Two-stage systems offer moderate comfort and cost. Variable-speed GHP systems are the costliest but deliver superior indoor climate control including very balanced temperatures and improve dehumidification when air conditioning.

Ductwork Installation: If you’re replacing a system, then your ductwork is probably good to go. However, in new construction or retrofitting a home or building for geothermal can cost up to $25 per linear foot in single-story structures and $35 per/LF in multi-story structures.

Type and Dimensions of Loop System: See our guide to geothermal loop types for details. Generally, the more excavating that must be done and the deeper it goes, the higher the installation cost will be.

Extras: You’ll need a permit that includes several inspections during installation. In rare cases, systems employing a water system require an environmental impact report, and those can be costly (up to $3,500 and a delay of several months).

Competition Among Geothermal Contractors: One factor keeping installation prices high is the lack of competition. Because geothermal is still catching on, relatively few installers are available.

Tax Credits and Rebates: Some of the cost of a geothermal heat pump will be offset by rebates from your utility company for the installation of efficient equipment and the potential for local, state or federal tax credits. Check this database for information on credits and rebates where you live.

Related: 5 Places to Get Latest HVAC Tax Credit and Rebates

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