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