Geothermal? Unfortunately Not An Economical Idea!

There is lots of talk recently about going 'Geothermal', with many new homes, and older houses retrofit with so-called 'geothermal' or 'earth energy systems'. Basically they are a ground source heat pump, and use a closed coolant loop to extract the heat stored in the earth (usually 8 deg C around here) which is then delivered to heat the house, and returned to the buried loop to heat up again, and continue the cycle. These installations are costly, upwards of $20,000 to $30,000 or more, require large excavations or deep wells to run the coolant lines in, but do eliminate the reliance on fossil fuels.

I went to the Nextenergy site, which has a nifty little savings calculator, which tells me I currently spend $3350 on natural gas. If I convert to an earth energy system, my heating costs would be $2260, a one-third savings over my present heating costs.

NextEnergy Savings Calculator

Size: 2900 sf
Building Age: 41+ years
Number of storeys: 2
Insulation: Loose
Province:  Ontario
City:  Stratford
Current Heating System:  Natural gas high efficiency condensing
Energy rates incl. storate and delivery: 0.41$/m3

The problem is, last year I only spent $1730 on natural gas, and if you take away the $17 'monthly charge' and 5% for domestic hot water, that leaves about $1450 as the cost for natural gas for heating, roughly 40% of the amount that the calculator estimated.

It would be safe to assume the savings calculated by the NextEnergy site are a percentage, rather than an actual dollar cost. Going this route, I could resonably expect my home heating bill to drop by one-third, roughly $475 per year. Divide the savings into an 'after rebate' cost of installation of an earth energy system of roughly $17,500 (a pretty low estimate actually), leaves a break even period of 37 years! It will be the year 2047, and I will be 79 years old when the installation finally pays for itself.

Something tells me that a roughly 40 year break even is not a very good return on investment, as the entire system would probably have to be replaced, essentially meaning there would be absolutely no break even point. Further to that, a significant portion of electricity in Ontario is still derived from burning fossil fuels, so running an earth energy system is not guaranteed to reduce my 'carbon footprint'.