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Why Electric Utilities Pay You to Install Geothermal

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When it comes time to think about replacing the heating and cooling system in homes and commercial properties, more and more property owners are beginning to understand that geothermal heat pump systems are the smart, 21st century comfort solution. There are many valuable benefits that come with upgrading to geothermal HVAC, but the huge utility cost savings every month is the primary reason that so many people are choosing geothermal.

But isn’t it too expensive?

That’s the question we hear almost everyday. On the surface, the answer seems to be yes – the upfront cost of installing a well-designed geothermal system will usually be higher than installing even a “high-efficiency” (according to the manufacturer) conventional heating and cooling system, but that is where the comparison ends.

To install a conventional system, an HVAC contractor essentially needs to simply deliver the furnace or AC units to your building, set them in place, tie in to duct work, connect refrigerant and gas lines, connect thermostat and start it up. The process of installing geothermal is similar, except for the installation of the “ground loop,” the underground heat exchanger we construct outside the building, that allows the geothermal system to move heat from the earth into, or out of, your building. This critical extra step is very labor intensive, so the cost of geothermal is often driven higher than traditional systems, but the ground loop is also what makes typical efficiency gains 50-70% possible.

Because of the much greater efficiencies, people around the world are incentivized to upgrade their comfort systems to geothermal in one way or another. In most of the United States, the incentives come in the way of Federal and State tax credits, electric utility rebates, and, of course, much lower monthly utility bills.

So, this brings us back to the original question – Why do so many utilities pay their customers to switch to electricity-saving geothermal heat pump systems? It seems counter intuitive. Electric utilities are in the business of selling electricity, so why would they pay customers to use less of their product? Well, most utilities have other responsibilities beyond just selling and distributing electrons. Incentivizing rate payers to use less electricity at key times of the year allows utilities to meet other important goals, including avoiding summer brownouts and blackouts, reducing pollution and emissions, and actually selling more electricity.

1.  Avoiding Summer Brownouts

Many people take for granted that their lights will always turn on, and that their refrigerators, air conditioners and other appliances will always run at the exact time that utility customers want them to run. Electric utilities go to greater lengths than many people realize to ensure that rate payers experience nearly 100% reliable electric service. Many utilities are required to provide reliable service by governments that often grant the utilities a near-monopoly on electric service within a given territory. But with rapidly growing electricity consumption, providing reliable service is becoming exponentially more challenging for utilities.

The challenge of providing reliable service is most evident in the summer cooling season, when most, if not every, building within a given utility’s service territory is running their air conditioning from about 2pm – 7pm in July and August. This is known as “peak demand,” and almost all of an electric utility’s resources go to building and maintaining power plant and grid infrastructure that will be able to reliably meet the summer’s 6-8 weeks of peak demand. Unfortunately, from a resource planning perspective, this is a very inefficient use of resources, because most of the grid will be greatly underutilized for the other 44-46 weeks of a typical year – often utilizing less than 50% of overall generation and transmission capacity. And all of this to support space cooling within buildings.

Utilities are beginning to recognize that, because geothermal heat pumps cool buildings with minimal electrical input compared to conventional air conditioning systems, it can be much less expensive to pay their customers to upgrade to geothermal than to build new power plants and grid infrastructure.

2.  Reducing Pollution and Emissions

It is no longer a secret that America’s aging power plants are the #1 source of greenhouse gas (GHG) emissions that cause global climate change. This is especially true of coal-fired power plants, but natural gas electricity generators, even though they burn cleaner, still contribute significant levels fo CO2 pollution, as well as methane pollution at many natural gas production sites across the country. Fossil fuel burning power plants also contribute other types of direct, and indirect, air, land and water pollution, which has far-reaching health effects that doctors and medical experts are only beginning to fully understand. Additionally, fossil-fuel burning on-site furnaces and boilers also pose risks for other types of indoor air pollution, especially carbon monoxide poisoning.

As more of America’s fleet of aging coal plants go offline due to new clean power rules, smart utilities are realizing that it can be much more profitable to reduce electricity demand by incentivizing energy efficient geothermal heating and cooling systems, rather than build new power plants to replace those being taken off-line.

3.  Selling More Electricity

Yes, you read that right. Ok, so how does the utility sell more electricity by incentivizing the installation of electricity-sipping geothermal heat pumps?

First, you have to understand that geothermal heat pumps do not burn natural gas or other fuels to create heat in the winter in the same way that a traditional furnace does. Geothermal systems use electricity to pump water into the home or commercial building that brings with it BTUs that have been stored outside underground. The electricity used to pump the water and compress the heat replaces energy that the building owner would have bought from the gas utility, or propane or fuel oil distributor. Some new geothermal owners are surprised to see their electricity bill actually rise in the winter heating months, but the new electricity costs are much lower than the fossil fuel bill it is replacing. The exceptional efficiency of ground source heat pumps creates 4-5 units of heat output for every 1 equivalent unit of electricity used – an operating efficiency of 400-500%. Considering the most efficient fossil fuel furnace is only about 95% efficient (when brand new), the potential cost savings are obvious.  Additional winter electricity sales from geothermal HVAC systems makes incentivizing their installation a smart business decision for utilities.

We have installed several geothermal systems that end up actually costing less than conventional systems after Federal tax credits and utility rebates. Not all of our customers understand exactly how this works out, but they are sure glad it does! Please feel free to contact us anytime for more information on utility rebates for geothermal.

Bird’s Eye View of Recent Geothermal Projects

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We’ve been hard at work so far in 2015.  Take a quick look at some of the homes we have designed and built geothermal heating and cooling systems for.

When you are ready to replace your old, inefficient air conditioner or furnace, call Steady State to discover how affordable your geothermal upgrade can be.  We are proud to serve the Tulsa and Dallas – Fort Worth metro areas.

Zero Energy Green Buildings Begin with Geothermal Heat Pumps

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As the U.S. market for green building design and construction evolves, we are hearing much more lately about so called “Net-Zero Energy” buildings. Homes and commercial buildings that earn the “Net-Zero” badge of honor do so by demonstrating extremely high-performance in energy efficiency. To qualify as Net-Zero, a building must be able to prove that its total annualized energy-related operating costs are brought down to $0.00. Some net-zero buildings even produce more energy than they consume in a year, generating positive cash flow. These impressive feats are made possible via careful implementation of innovative architectural designs and detailed construction strategies – including smart integration of on-site renewable energy systems, especially geothermal heat pump technology.

The best of the best zero energy buildings are developed using a combination of smart passive solar design, extreme attention to detail in the construction of the building envelope and insulation systems, and intelligently designed and correctly sized and installed geothermal, solar PV, and solar thermal systems. Aggressive energy efficiency strategies, combined with geothermal heat pump systems, are by far the largest contributors to the ability of a building to reach zero energy nirvana in most climate zones by nature of their 24/7, rain or shine performance. Any building project attempting to achieve net-zero performance should always consider geothermal heating and cooling. In fact, it is extremely rare to hear of a truly net-zero building that does not implement some type of geothermal HVAC strategy.

A new state-of-the-art Walgreens retail store to be built in Evanston, Illinois (pictured above) is a great example of how net-zero green buildings are going mainstream. Walgreens believes that this experimental pilot store will be the United States’ first net-zero retail store, and will serve as model for the retailer’s other 8,000 store locations. It really doesn’t get much more mainstream than that. Check out the official Walgreens website for more information on this great project.

Aside from saving lots of money every year on operating costs, Walgreens believes that their pursuit of green technology can have a significant positive impact on the nation’s environment. Walgreens plans to generate electricity and reduce its usage by more than 40 percent through several technologies in the store including:

  • more than 800 roof-top solar panels,
  • two wind turbines,
  • geothermal energy obtained by drilling 550-feet into the ground below the store, where temperatures are more steady and can be tapped to heat or cool the store in winter and summer,
  • LED lighting and daylight harvesting,
  • carbon dioxide refrigerant for heating, cooling and refrigeration equipment,
  • and energy efficient building materials.

Renewable Energy Needed to Power Texas Economy

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The heat is on. It’s summer in the South Central U.S., the time of year when most of us lose the sport coats and reach for the sunscreen, while utility regulators, power plant operators and large commercial users across the region hope and pray that electricity generation capacity can keep up with epic spikes in demand. In Texas, power generation and distribution systems are stretched particularly thin this year, creating an urgent need for creative solutions to curb the peak summer demand loads that keep Texas’ economy hot and its people cool.

A new report from the North American Electric Reliability Corporation (NERC) indicates that most of the U.S. and Canada should be in good shape this summer – except for Texas, where a growing population and higher temperatures are causing growing energy demand to rapidly outpace new supply.

With Texas being home to 4 of the United States’ fastest growing metro areas – Dallas-Fort Worth, Houston, Austin and San Antonio – utilities and governments across the state are learning to incentivize energy efficiency and renewable energy systems in buildings. While Texas’ utility-scale wind industry is a national leader, there is simply no substitute for tight building envelopes, super insulation and on-site renewable energy systems like geothermal and solar for those times when the wind isn’t blowing across West Texas.

If your power goes out this summer, impress your friends with your knowledge of North America’s antiquated power grid. View the full NERC 2013 Summer Reliability Assessment.

Austin Ranks #11 for Green Building and Clean Tech Leadership

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Once again, the Capital City of Texas is doing big things in renewable energy, green building and clean tech innovation. Austin ranked #11 overall in Clean Tech Leadership in the Clean Edge 2013 U.S. Clean Tech Leadership Index. While the State of Texas as a whole ranked #22 among all U.S. states in clean tech, it is probably safe to say that the people of Austin are the driving force behind the impressive rankings.

A closer look at the rankings reveals that Austin came in at:

  • #5 in clean tech investment, clean tech venture capital, innovation and workforce
  • #7 in clean energy and carbon management
  • #8 in LEED certified square feet
  • and #11 in green buildings

Contact Steady State today to learn how we can put smart renewable energy and green building strategies to work for you.

Underground Economies: Steady State® Founder Featured in ICSC Magazine

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If you are a commercial real estate professional, you are likely familiar with the International Council of Shopping Centers (ICSC) and its trade magazine, Shopping Centers Today. As the premier resource for the retail real estate industry, ICSC’s monthly magazine is the “go-to” source for the valuable news, information and trends that are shaping the future of commercial real estate all over the World.

When ICSC wanted to provide its 58,000+ members in over 90 countries across the globe with timely, credible insight on clean, renewable geothermal heating and cooling technology, they contacted the people at Steady State to provide expert analysis that is relevant to international real estate professionals. Steady State Founder, Craig Immel, was recently interviewed for the March 2013 issue of Shopping Centers Today to update the retail real estate industry on the latest trends and future outlook for the use of geothermal and other renewable energy technologies in a wide variety of commercial properties.

The article, titled, “Underground Economies,” turned out great. Check it out here. To learn more about green building and renewable energy strategies for your retail real estate, contact Steady State today.

Steady State® Founder Craig Immel Discusses Green Building and Renewable Energy on TBN

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Steady State® Founder, Craig Immel, was recently invited to discuss green building and renewable energy on “Joy in Our Town,” a program airing on the Tulsa affiliate of Trinity Broadcasting Network (TBN). TBN is the world’s largest religious network, delivering the Christian message of hope around the globe via television, internet and mobile devices.

Our televised segment was focused on the basics of green building, including the concepts of energy efficiency and renewable energy technologies like geothermal and solar. We had a great discussion, and answered many of the common questions that home and business owners are asking us on a daily basis these days.

It is especially exciting for Steady State to provide faith-based communities with green building and renewable energy strategies that can help congregations of all sizes save tens of thousands of dollars every year in their sanctuaries and other facilities. Faith-based communities are realizing their responsibility for stewardship of God’s creations on Earth, and are beginning to understand that being smarter about how they use energy, water and other natural resources in the construction, operations and maintenance of their buildings is a very effective way to protect the health of our planet and its people.

To learn more about all the green building and renewable energy services we can offer to your congregation, contact Steady State today.