By Steve Smith
Good news: Renewable technology can now fuel energy systems in residential homes for far less than families might imagine.
The first step? Proper planning and implementation of the building slated for construction. Think of this phase in these terms: By having a tight building envelope in the first place, less energy is required. In turn, less renewable technology is needed. Essentially, it’s more practical to reduce energy requirements of a structure upfront than it is to satisfy the energy needs of a building with renewable technologies.
Moreover, every green building is different. Designing such a building successfully requires a careful understanding of not just renewables, but also of the building site’s climate, environment, and weather patterns.
A truly efficient home may take advantage of several energy technologies and could rely on closed-cell foam insulation, wet-spray cellulose, or other state-of-the-art insulation methods. Ultimately, however, those decisions can’t be made prior to a thorough analysis and careful assessment of all building requirements.
And then, of course, there’s the client. Achieving net-zero energy won’t be possible without a client that’s totally committed to the process and results. Builders that value and promote renewable technologies (and take the initiative to guide their clients toward these technologies) can differentiate themselves from those simply looking to maintain the status quo. St. Louis-based Hibbs Homes, for example, has developed a sterling reputation for building energy-efficient homes, especially as the demand for green building expertise increases nationwide.
If you have a client that’s on board and you’ve conducted a proper analysis and architecture evaluation, it’s time to consider renewables.
Depending on what region you’re in, we’ve found that the savings you incur by installing a geothermal system is close to a 12% investment return. That’s almost impossible to find in any other secure investment. Over the course of, say, 20 years, that accumulated return could put a child through college, pay off the mortgage early, or bolster the homeowner’s 401(k) — all while protecting the natural environment.
Installation costs of geothermal heat pumps (and other renewables) vary throughout North America, but to illustrate where savings might be achieved, consider a 2,200-square-foot home in an area that receives ample sunlight. The installation cost of the home’s geothermal system would be around $30,000, and a 10-kilowatt solar array installation would cost about the same.
With the existing 30% tax credit for residential geothermal and photovoltaic solar, the net cost of $60,000 would fall to around $42,000. A standard, nonrenewable HVAC system would cost around $15,000. Subtracted from $42,000, this yields a net difference of $27,000 (or about $129 a month on a 30-year mortgage). And that’s before accounting for any state tax incentives or solar renewable energy certificates, which would lower the cost further.
The bottom line? Essentially, you’re swapping $129 (spent monthly on your mortgage) for a $0 renewable bill.
For this reason, builders can make the case that it’s more financially savvy to invest in your home and your environment than spend even more on lost fossil fuel energy. In conversations with energy efficiency consultant Doug Rye, he’s told me: “You’re going to pay for a geothermal system anyway, so you might as well just put one in your home to begin with.”
The return on investment is there.
Making Efficiency Accessible
In many cases, the average electric bill is $10 to $20 per month, plus the utility’s monthly facility/meter charge, which varies by utility and isn’t considered energy use. It’s not uncommon to get to net zero — or even under $10 per month. In the case of the 2,200-square-foot home, a geothermal system combined with a 10-kilowatt array will help you reach net zero (or at least very close to it). In other words, it’s achievable for the average homeowner.
Builders that can provide state-of-the-art insulation, a geothermal system, and a solar array to clients will be more profitable and can provide more customer value, all while caring for the environment. Most municipalities — and even many utilities — will embrace renewable technologies if it means positively affecting their community’s environment.
In Austin, Texas, the community of Whisper Valley equipped all of its homes with geothermal and PV solar technologies. This change keeps residents’ monthly utility bills close to single digits. The development will eventually include 7,500 single-family homes and apartments, commercial and community buildings, and a water-treatment plant. Together, these buildings will produce as much electricity as they consume. The most shocking part? Homes start in the low $200,000s.
As a developer or builder, never assume buyers can’t afford efficient technologies; the offset of utility costs will typically cover that slightly higher mortgage payment. Look to invest in the homeowner rather than the utility bill, and discerning buyers will understand the value you provide.
Steve Smith is founder and CEO of GeoComfort Geothermal Systems, a geothermal heat pump manufacturer. Recognized for its reliability, GeoComfort endures top-notch testing measurements to ensure the highest quality results (with the best warranty to boot).