Geothermal Firm Offers First Pay-by-the-Kilowatt-Hour Plan

February 14th, 2011 by Susan Kraemer

New Hampshire-based geothermal ground heat exchange company LVestus Energy has just begun a Geo Thermal Purchase Agreement (GeoTPA) program that makes green, geothermal energy a cost-effective way to heat or cool a commercial facility – for no upfront money – the same way that you can buy solar power.

Its GeoTPA is the same idea as the Power Purchase Agreements (PPAs) that turned solar power into a commodity in the nine or so states that have allowed solar companies to compete with electric utilities, by selling you just the power (off your roof) hour by hour.

LVestus Energy is pioneering the same idea to finance geothermal energy for commercial and industrial buildings, and have a patent pending on their trademarked GeoTPA. To finance the first purchases, Brighter Energy is reporting, a Sundance Capital Group, LLC has lent Lvestas $750 million in initial project funding.

As with a solar PPA, the consumer does not pay any money for the system, since they will be buying just the power, the same way that the consumer pays only for the power supplied by their current utility.

Big companies like Walmart typically have not purchased their own (sometimes quite huge!) solar systems, but have signed a power purchase agreement instead with a solar financing company, because it is a completely risk-free way to shed all those unwanted carbon tons.

Similarly, municipalities, universities, schools, hospitals, building owners, property managers and developers can utilize the same zero upfront capital outlay program to install the exterior loop field portion of a geothermal heating and cooling system. Since Lvestas Energy only installs the deep 500 feet vertical units, the system is not for homes, but for larger users, where the savings can be greater.

As with a solar PPA, the energy delivery prices are fixed in today’s dollars, which provides a hedge against future fossil fuel price inflation. Solar power rates as low as 12 cents a kilowatt hour result when electricity consumers are permitted to sign power purchase agreements (PPAs) with solar companies like SunRun (for homeowners) and Tioga (for commercial users). (Solar Power Rocks listed these PPAs in 2009)

This geothermal PPA should be even more successful than solar PPAs have been, given the lower costs, and faster paybacks frequently associated with geothermal. For many regions of the US subject to extremes of hot summers and cold winters, LVestas Energy’s GeoTPA would be an even better bet than a solar PPA.

As with a solar PPA, buying geothermal heating and cooling through a TPA provides a way to lock in heating and cooling costs for 15-25 years while benefiting from the immediate savings by reducing use of fossil fuels at today’s prices.

Keep up to date with all the hottest cleantech news by subscribing to our (free) cleantech newsletter, or keep an eye on sector-specific news by getting our (also free) solar energy newsletter, electric vehicle newsletter, or wind energy newsletter.

About the Author

Susan Kraemer writes at CleanTechnica, CSP-Today, PV-Insider , SmartGridUpdate, and GreenProphet. She has also been published at Ecoseed, NRDC OnEarth, MatterNetwork, Celsius, EnergyNow, and Scientific American. As a former serial entrepreneur in product design, Susan brings an innovator's perspective on inventing a carbon-constrained civilization: If necessity is the mother of invention, solving climate change is the mother of all necessities! As a lover of history and sci-fi, she enjoys chronicling the strange future we are creating in these interesting times. Follow Susan on Twitter @dotcommodity.

Pingback: CA Utility Misses 37% Renewable Target as Geothermal Firm Faces Financing Woes – CleanTechnica: Cleantech innovation news and views
http://www.egggeothermal.com Linda

It was quite confusing when I read that people were being charged not for the equipment, but for the actual solar hours being used. Then they compared it to the fact that people don’t pay for the meter, only the electricity being used. At 12 cents per kilowatt hour is definitely a bargain–again the only downside is the initial installation costs.
- http://cleantechnica.com/author/susan Susan Kraemer
  
  No, there are no installation costs. Just pay for power only, same way as you pay electric bill now.
http://www.egggeothermal.com Linda

This method of heating and cooling through use of solar power is great. Using this method your system can last up to 25 years!
http://www.wholebuffalo.com wholebuffalo

Great concept. They should do the same for residential geothermal.
- http://cleantechnica.com/author/susan Susan Kraemer
  
  No doubt that is next. I remember that solar PPAs were initially only available for commercial too.
Penelope Ball

I started out by doing an evaluation of whether my money would be better spent in an investment vehicle or an energy efficiency measure. I bought books on solar, wind, fuel cells, green homes, and geothermal. Take it from a real serious investor…geothermal heating is the place I put some serious money. I can now say I’m green in the environment and with my investments. The trick is to make certain you get involved with the right company. So many don’t know what they’re doing. This book taught me everything I needed to know to talk the talk of geothermal HVAC (see-I didn’t even know what HVAC meant a few months ago). This might be the hottest investment book of the year, and I don’t think the author’s even have a clue (about the investment part, I mean). Great all around book…real fun, readable, just good solid information
Pingback: Tweets that mention Geothermal Firm Offers First Pay-by-the-Kilowatt-Hour Plan – CleanTechnica: Cleantech innovation news and views -- Topsy.com