The cost of a geothermal heat pump system installation is considerable. However, the installation costs can be reduced by tax credits that are offered http://bit.ly/1HMaxnH by the federal government. These federal tax credits are for up to 30% of http://bit.ly/1J61IXy the total cost of a geothermal heat pump system installation (including duct work installation or modifications), which would bring down the cost of a $30,000 geothermal heat pump system installation to $21,000. Some state governments offer additional tax credits and subsidies that can be applied towards the cost of a geothermal heat pump system installation to bring the cost down even more.
Once a geothermal heat pump system has been installed and is functioning properly, the savings begin. First off, a geothermal heat pump system needs very little maintenance and produces no exhaust, so costs for annual system maintenance and chimney cleaning will not be incurred. On an ongoing basis, the annual savings for heating or cooling a building with a geothermal heat pump system are considerable.
Paul Wilkes of Garden State Geothermal. (http://www.gardenstategeothermal.com) has been installing geothermal heating and cooling systems for years in the New Jersey, New York, and Pennsylvania area. For a well insulated 2,000 square foot home with a three ton geothermal heating and cooling system in New Jersey, Paul said, "I http://bit.ly/1J61L5v would estimate your total heating and cooling cost to be somewhere in the $1,500 per year range. Heating is probably around $1,000 of that total cost, and that would be in electric." That comes out to approximately $125 per month (averaged out over one year) for heating and cooling a 2,000 square foot home via a geothermal heating and cooling system. Heating the same home with heating oil and cooling it with a central air conditioner would cost approximately $230 per month http://bit.ly/1HMavfE over a one year period, assuming heating oil costs $3.50 per gallon. That is a savings of $1,260 per year on heating and cooling costs. This is how geothermal heating and cooling systems can save money on an ongoing basis.
Paul stressed that this is a rule of thumb estimate only. He further stated, "there is no accounting for life style use, and no two homes are alike in how much energy they use. Two of the same homes in different locations will use different amounts of energy to heat and cool."
If a geothermal heat pump system costs $20,000 to install after federal and state tax credits and subsidies are figured into the cost, and the annual savings remain at $1,260 per year for heating and cooling costs, the system would pay for itself in 16 years. A long period of time, but worthwhile if one is going to remain in a building for a long period of time. If the cost of natural gas and heating oil were to rise significantly and electricity costs rose modestly, then the payback time would be accelerated accordingly. Having a geothermal heating and cooling system installed on a building also increases the value of the building, as prospective buyers are enticed by the low heating and cooling costs.