I have enjoyed reading posts on this forum. I appreciate how much knowledge and wisdom is here.

Please indulge me in the following question:

Now that we have a 30% incentive until 2016, what else would have to happen for the number of geothermal installations per year to increase to ten times the current rate?

Energy costs, including electical costs to increase significantly?  That would be a major factor in increasing the demand for geothermal.

Posted By tlw00dy on 17 Jun 2010 12:40 AM
...what else would have to happen for the number of geothermal installations per year to increase to ten times the current rate?

Lower cost, additional marketing, lower cost, geothermal education, higher utility costs, oh - and lower costs. 

Availability of money.
It's not that people don't see the benefits, many simply don't have 20 grand lying around.
Don't expect lower costs, some new guys in our area are cutting throats, but that isn't driving the price down, the experienced contractors will be here fixing their work long after they are out of business.
Joe

Lower margin and higher volume on equipment and labor (not for everyone) can be a way to lower costs, as would additional tax credits, grants, low interest rate loans, etc.

It's a chicken-n-egg thing. Currently, not nearly enough
competent installers or drillers to support 10x increase.

IMO, the economic motivation is already sufficient to get
things rolling, but it takes time to accelerate. As more
and more of the "new guys" evolve into "old pros," geo
will become mainstream.

Posted By geome on 17 Jun 2010 10:43 AM
Lower margin and higher volume on equipment and labor (not for everyone) can be a way to lower costs,

Equipment prices rise steadily every year due to demands from feds and consumers both, for higher (albeit barely consequential) efficiencies and new refrigerants. So what you are suggesting is that I charge less and work more......mmmm no thanks.
With contractors, those who do the highest volume often charge the highest prices due to intense advertising and commision sales staff.
Walmart rules do not apply, we sell time they sell stuff in high volume.
j

I can tell we're not going to convince each other, but that's ok. :-)

"Equipment prices rise steadily every year due to demands from feds and consumers both, for higher (albeit barely consequential) efficiencies and new refrigerants."
Higher production and lower overhead per unit could offset and possibly lower equipment prices depending on rate of expansion. Economies of scale can be a wonderful thing.

"So what you are suggesting is that I charge less and work more......mmmm no thanks."
What I suggested is that higher volume and lower margin could make a company more money, and said that this is not for everyone. It's a personal choice for the business owner.

"With contractors, those who do the highest volume often charge the highest prices due to intense advertising and commision sales staff."
"Often" does not mean always or a majority. Again, it's a personal choice for the business owner.

"Walmart rules do not apply, we sell time they sell stuff in high volume."
These rules can certainly apply to service industries. Again a personal choice. Repair shops, lawyers, accountants, dry cleaners, etc., sell time as well, yet prices can locally vary widely based on overhead, efficiency, volume, margin, etc.

More installations so that prices (labor and parts) move closer to ASHP systems.
Solve the issues with some open loop/return wells/standing column wells.
Higher taxes on energy (with an corresponding tax decrease elsewhere that, on average, makes it a wash).

Better documentation and test standards for home energy use and costs - if I buy an existing home, how can I decide between the one with a GSHP , the one with extra insulation and the leaky one built to code minimums? On average, people move long before a GSHP wears out - so they need to prove the value to a buyer if they expect to get a positive ROI.

Posted By jonr on 21 Jun 2010 03:40 PM
More installations so that prices (labor and parts) move closer to ASHP systems.
Solve the issues with some open loop/return wells/standing column wells.
Higher taxes on energy (with an corresponding tax decrease elsewhere that, on average, makes it a wash).

Better documentation and test standards for home energy use and costs - if I buy an existing home, how can I decide between the one with a GSHP , the one with extra insulation and the leaky one built to code minimums? On average, people move long before a GSHP wears out - so they need to prove the value to a buyer if they expect to get a positive ROI.

people selling homes with geo systems, often leave their utility bills on the counter for perspective buyers to see. home shoppers generally have a target sized home in mind and are able to see the difference.

as a footnote, it is nice to see someone who has made suspicious comments about geo heat pump lifespan concede longevity.
j

Thank you for the excellent feedback.

To summarize the conversation so far, we would need...

* Lower installation costs
* More widespread education about the benefits of geothermal
* More marketing
* Rasie utility prices
* More financing options
* More competent installers and drillers
* Improvements in economy of scale by keeping crews and equipment busy full time and higher volume purchasing
* Better documentation (evidence?) that a GSHP raises the value of a home

Without lowering the price we pay installers for labor, are there any other ways to reduce the cost of installation as much as possible? What kind of innovations would be needed?

Higher utilization on assets (drilling equipment) would be a way to keep costs down. Is this an issue, or are the drillers already working full time?

Outside of the low demand problem, what might be some reasons that a GSHP would cost more than a similarly sized (for heat load) furnace?

Are there groups lobbying for an increase in the price of energy? In my area, this is a big deal. I'm seeing ROI for well insulated homes with newer windows run very long, in large part due to the inexpensive price of natural gas.

One way that larger companies drive costs down is through volume purchasing agreements. My observation is that the landscape of geothermal installers is filled with small businesses that won't be able to achieve high enough volume to negotiate significantly with distributors. Are there any other ways to accomplish this; perhaps through an association or coop? It strikes me that the marketing and education challenge is similar -- small shops can't afford a big campaign. Could this be funded through an association or coop?

Are there groups lobbying for an increase in the price of energy?

Yes...The Obama Administration. Cap and Trade would greatly increase energy costs...INCLUDING electricity.

Bergy

Posted By Bergy on 22 Jun 2010 03:18 PM
Cap and Trade would greatly increase energy costs ...

Uh, according to Michele Bachmann, Glen Beck, and Caribou Barbie?

"In 1996, the median duration of residence for the U.S. population 15 and over was 4.7 years".
"according to NAR, the AVERAGE length of ownership time is roughly 6 years or so".

No argument that any heat pump should outlive these figures. Realtors claim that GSHPs don't do anything for home values and education should help this. But past heating bills are subject to fairly large errors.

Posted By jonr on 22 Jun 2010 06:05 PM
But past heating bills are subject to fairly large errors.

Why?

Also, if friendly with a neighbor of a similar sized house, maybe they could provide a copy of their bill for comparison.  While not a perfect comparison, my $181 January 2010 bill compared to their $390 bill makes a statement.  Wish I had a copy of it... 

Uh, according to Michele Bachmann, Glen Beck, and Caribou Barbie?

No...Just the partisan CBO.

Bergy

>> But past heating bills are subject to fairly large errors.
> Why?

As a prospective home buyer, differences in indoor temps, number of people, open windows, exhaust fan usage, electricity and hot water consumption makes comparing utility bills difficult.

It is true that they're subject to errors, however, they are one, exceptionally useful, metric we have and they give us an actual data point for the home's consumption. They buyer/interpreter of that data has to consider the current owner's situation. Is it a retired couple or a family of six, etc.

However, the same can be said of cars. Are you a leadfoot or a hypermiler? Regardless, I still want to know what the rating is on the house and how much the previous owner has been using.

At least with cars, they have a standardized test.
It would be interesting to see how the accuracy of heating bills compares to measuring the energy usage for a few nights and adjusting for outdoor conditions. Of course if the outdoor temp is swinging from 60F at night to 80F during the day, there might not be any energy usage to measure. But given that one house might use $1000/year more or less than some other house, I'd happily pay $500 for a test to find out (if it worked better than utility bills).

If that can't be done, then I guess one justs looks at the insulation, windows, furnace, AC, perhaps does a blower door test and then tries to convert this to dollars with tools like HEED.