Did you know that one of the most promising solutions to high energy costs could be buried right in your backyard?

It’s true. Ground source heat pumps, also referred to as geothermal technology, can significantly reduce energy costs while meeting a home’s entire heating and cooling needs. It can even be used for water heating.

Dale Kessinger, energy services manager at Rock Energy Cooperative, estimated that the technology could cut a homeowner’s energy costs in half. Individual savings depend on the size of the geothermal system installed and whether the homeowner is switching from natural gas, propane, or electric heat.

Just as the savings vary, the cost of a ground source heat pump and installation depends on factors such as the size of the home, available land area or lot size, and the individual needs of the homeowner, said Clay Kohlhagen of Don-Martin Heating, Cooling & Geothermal in Janesville. He estimated that a system for an average home would cost $15,000 to $25,000.

Recognizing that it might be difficult for members to fund such a project, Rock Energy Cooperative’s board of directors has approved a loan program that allows members to borrow up to $7,000 for five years at a low interest rate.

“We realize that the initial cost of a ground source heat pump prevents many members from switching to this highly efficient form of heating and cooling,” said Shane Larson, Rock Energy’s CEO. “Our loan program is designed to make owning a geothermal heat pump system easier, and the best part is that the loan payment can be offset by energy cost savings.”

In fact, the average monthly energy cost savings on a typical propane furnace and central air conditioner replacement is estimated to fully cover the installment payments on a five-year loan of between $4,000 and $7,000. The payback for the entire project cost is projected to be five to nine years.

A federal tax credit equal to 30 percent of the project’s cost makes the switch even more affordable. With the tax credit, the system’s cost is a more affordable $10,500 to $17,500. In addition, Rock Energy members who live in Illinois are eligible for a $1,500 rebate through the Association of Illinois Electric Cooperatives. Wisconsin members are eligible for a $250 rebate through the Focus on Energy program.

How do heat pumps work?

As the name implies, heat pumps simply move heat from one place to another. The ground is used as a heat source during the winter, and heat is transferred into the ground during the summer.

Scott Niesen, Wisconsin territory manager for WaterFurnace, explained that temperatures about four to six feet underground remain relatively constant throughout the year. In winter, fluid-filled underground polyethylene pipes, called loops, absorb heat from the ground and transfer it inside. An indoor unit then compresses the heat to a higher temperature and distributes it throughout the building. The process is reversed in summer, when heat is pulled from the home, carried through the loops, and deposited in the cooler ground.

Systems can be configured in four basic ways (see graphic), but Kohlhagen said the most common in this area is the horizontal loop, which requires at least a quarter acre of land. If space is limited, vertical loops can be installed.

Kohlhagen said each system is individually designed by determining the home’s heating and cooling requirements while factoring in the family’s desired comfort level.

Growing in popularity

Although geothermal technology has been around for 30 years, Niesen said its popularity has increased substantially in recent years as people try to control their energy costs as well as protect the environment.

The Department of Energy and the Environmental Protection Agency have both endorsed ground source heat pump systems as among the most energy efficient and environmentally friendly heating, cooling, and water heating systems available.

The systems also require little maintenance and are long-lasting. The indoor unit has a lifespan of more than 20 years and costs $5,000 to $8,000 to replace. The rest of the initial price covers design, excavation, installation, and the loop system, which are one-time costs. The underground loops are typically guaranteed for 50 years, and many think they will last a lifetime.

Experts, however, warn that the knowledge to properly design and install a system is specialized. The best way to find out if a heat pump will be cost effective for your needs is to contact a certified and qualified geothermal installer. Rock Energy can provide you with a list of qualified geothermal contractors.