How Much Does a Geothermal Heat Pump Cost?
Geothermal heat pumps offer better efficiency than traditional air-source heat pumps because they use the earth's constant temperature 5-to-10 feet below ground as the heat exchange medium. Traditional air-source heat pumps use the outside air for this purpose, which can fluctuate from near freezing temperatures to sweltering conditions in the summer months. Geothermal heat pumps cost more than traditional air-source heat pumps to install, but various incentives and lower operating costs over the life of the unit might make the investment worthwhile.
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Installation Costs
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Whether geothermal or traditional, heat pump installation costs are affected by the size of the unit, or the tonnage required to heat and cool your home. The price for geothermal heat pumps is higher than for traditional heat pumps due to the need to drill holes for vertical piping or dig trenches for horizontal piping, and the U.S. Department of Energy estimates that a geothermal heat pump can cost up to several times more than a same-sized traditional heat pump. To determine costs for your area, contact air conditioning installers and ask for a breakdown of installation prices, including the cost of trenching or drilling for a geothermal system. Also, request a comparison of the per-ton price for traditional and geothermal heat pumps.
Federal Tax Credit
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Federal tax credits provide a way for taxpayers to reduce the cost of a geothermal heat pump. As of the 2010 tax year, the Internal Revenue Service says that geothermal heat pumps qualify for the federal residential energy efficient property credit, which equals 30 percent of the system's equipment and installation costs.
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State Tax Credits
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Some states offer a tax credit similar to the federal tax credit for installation of geothermal heat pumps. For example, New Mexico offers a tax credit of 30 percent of the system's installation costs, up to $9,000, for systems installed after Jan. 1, 2010. Check with your state to determine if it provides a tax credit for installation of a geothermal heat pump.
Power Company Rebates
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Some power companies offer rebates to help consumers replace existing heating and cooling technology with geothermal heat pumps, or include geothermal heat pumps in new home construction. For example, Connecticut Light and Power offers an Energy Efficiency Fund rebate of up to $500 per cooling ton for a geothermal installation, up to $1,500. Consumers must obtain advance approval for their project and file required paperwork with Connecticut Light and Power. Check with your power provider to determine if geothermal rebates exist for your area.
Operating Costs
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Because they require less power to operate, geothermal heat pumps cost less to run, reducing your utility bills. The U.S. Department of Energy estimates the payback period for the excess cost of a geothermal installation at five to ten years, depending on how much you use your system.
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References
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