The Politics Behind One State’s Geothermal GSHP

Originally published on the ECOreport.

At least 2,015 North Carolinian homes and buildings have taken out permits to use vertical closed-loop geothermal systems. This is only one of several geothermal technologies used for heating and cooling purposes, and over 10,500 units have claimed the NC Renewable Energy Investment Tax Credit. Despite its high upfront cost, geothermal is far more efficient than conventional systems and a great deal less expensive in the long run. It is also a clean energy source, whose contribution to the state’s fight against greenhouse gas emissions appears to be overlooked. A new survey from the North Carolina Sustainable Energy Association (NCSEA), North Carolina’s Geothermal Industry: Uncovering Impact and Opportunities, examines the politics behind one state’s geothermal GSHP (ground source heat pump) market.

Making Geothermal GSHP Affordable

The businesses responding to this survey identified their customer base as 44% residential, two-thirds of which were single-family homes, and 35% commercial.

Potential customers are faced with an upfront cost averaging between $7,000 and $9,000.

“Even though they have a higher upfront cost, the rate of their efficiency allows consumers to see quicker payback,” said the report’s lead author Kacey Hoover, Strategic Relations Manager at NCSEA. As geothermal is 45% more efficient than conventional HVAC systems, users recoup their investment “in less than 5 to 10 years.”

Federal & State Incentives

Yet that initial outlay is significant and 21% of the respondents to NCSEA’s survey identified federal and state tax incentives as crucial for making geothermal cost competitive.

Prior reports have found that the “tax credit has been a key component to the geothermal industry and the majority of GSHP system owners agree it’s an important source of financing. In fact, the Motivations and Behaviors of Solar PV and Geothermal System Owners in North Carolina report found that state tax credits were regarded as either ‘very’ or ‘somewhat’ important by 92.7% of geothermal system owners.”

Despite this, some politicians want to see these incentives cancelled.

In addition, “State and/or local regulations, such as regulations and permitting,” were cited as hurdles by 31% of the respondents to NCSEA’s poll.

Geothermal’s Contribution To Society

Local, state, and federal politicians need to realize there is a cost connected to not encouraging technologies like geothermal GSHPs.

Geothermal GSHPs’ contribution to society, in the fight against greenhouse gas emissions, appears to largely go unrecognized.

Conventional HVAC systems either directly, or indirectly, use fossil fuels. This includes electrical systems, which use energy that is partially derived from coal or natural gas power plants whose emissions cause climate change.

Scientists have tentatively linked climate change to extreme weather events like the tornados that struck North Carolina in 2011, causing 22 deaths and an estimated $3.2 billion in damages.

There are also health costs, such as emergency treatments for people with asthma from rising emissions.

Modern closed-loop geothermal power plants emit no greenhouse gases, their lifecycle GHG emissions (50 g CO2 eq/kWhe) are 4 times less than solar PV, and six to 20 times lower than natural gas.

Though North Carolina is not the best fit for generating electricity from geothermal power, geothermal HVAC systems and GSHP technologies also emit no greenhouse gases. The reduced amount of electricity to run GSHPs transfers those savings almost immediately to ratepayers on their utility bills. Additionally, according to NCSEA’s report, those savings are the #1 motivation for ratepayers to adopt GSHPs.

Build-out Of The Geothermal Industry

By investing in the geothermal industry today, North Carolina’s politicians can ensure the buildout of an industry that is already enabling users to use heating and cooling systems that are cleaner and more economical than conventional systems.

“Geothermal is truly a hidden gem in our state and people are just not aware it is another way for them to reduce cost,” said Hoover.

All images taken from the NCSEA report, North Carolina’s Geothermal Industry: Uncovering Impact and Opportunities.