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How to Prepare For Rising Energy Costs

Sustainable Living Mallory Fohne December 07 13 minutes reading time

Compared to 2020-2021 winter, households will spend significantly more to stay warm over the next several months. Homes using propane as their heat source will spend 54% more; homes heating with oil will spend 43% more; homes relying on natural gas will spend 30% moreand last, but certainly not least, homes using electric heat sources will spend 6% more. The Energy Information Administration (EIA) warns homeowners of these forecasts in a winter fuel outlook, so you can budget and prepare.

With nearly 60% of homes relying on fossil fuels to stay comfortable this winter, people across the country will feel the impact of this fluctuation month after month. Homeowners will face a tough decision: spend more to remain comfortable or drop the temperature to save money, resorting to extra layers of clothing and blankets to ward off the shivers. Thankfully, this doesn’t have to be a one or the other situation – there’s a third option with geothermal heat pumps. 

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Because geothermal taps into the consistent temperature below ground to transfer heat, it outputs three to four units of heat energy for every one unit of electricity used to power the system. Even with electricity costs rising by 6%, households using geothermal get the most free heat energy for every dollar spent. Actually, any home using fossil fuels as a heat source isn’t eligible for any free heat energy because some energy is always lost in the combustion process. Homes using air-source heat pumps lose more energy than geothermal as they work harder to create heat from cold outdoor air temperatures. 

You might be wondering, “will this rise in energy costs last for one season, or will it be an ongoing issue?” Is it worth installing a geothermal heat pump if the trajectory of energy costs change? A cooler-than-normal winter indicates the rise in energy costs might not be so dramatic annually, but unfortunately, that’s not the only contributing factor. While experts believe we’ve passed the worst of the economic downturn related to the pandemic, growth in energy demand has been and continues to outpace energy supply. This dynamic is raising energy prices around the world. 

If you've heard enough and are convinced geothermal is the way to go, be assured that geothermal heat pumps are the best way to heat (and cool) homes while using the least amount of energy and letting you experience the highest amount of cost-savings on utility bills, all while keeping homes comfortable year-round. If you need a bit more convincing, read on. 

What's the Best Way to Heat Your Home? Fossil Fuel Versus Electricity

Heating sources are powered in two main ways: by fossil fuels (natural gas, propane, or oil) or electricity. While the fossil fuel industry has spent decades claiming to be the best, the toll on the environment and peoples’ wallets during times like these indicates otherwise. 

Regardless of whether you believe in climate change or not, fossil fuels aren’t renewable. At some point, the supply can and will run out. Electricity, on the other hand, can be generated with renewable resources like solar energy.  

The bottom line is that furnaces using natural gas, propane, or heating oil can never generate more heat energy than it takes to power them. Even the most energy-efficient furnace with an AFUE rating as high as 98.5% isn’t putting all its energy to good use, as it’s missing out on 1.5% to reach 100% efficiency. Whereas geothermal heat pumps have a rating of 300% to 500% and air-source heat pumps have a rating of 250% to 290%. So, whenever it was mentioned earlier that geothermal provides three to four units of heat energy for every one unit of energy consumed, this efficiency rating is the backbone of that data. Heat pumps, on average, use one-third of the energy of a natural gas furnace. 

The argument has always been that a furnace, especially one powered by natural gas, is more affordable upfront and still highly efficient. Its affordability is entirely dependent upon infrastructure and energy costs. As states like New York, California, Vermont, Washington, Massachusetts, and Colorado adopt natural gas bans on new builds and renovations and promote electrification, that infrastructure keeping natural gas seemingly “more affordable” is crumbling. The Rocky Mountain Institute points out that the cost of heat pumps is projected to continue declining while the cost of maintaining the aging gas infrastructure is increasing. Those costs are passed on to customers, who are projected to pay them off over the next 50-plus years. That’s long past the point of many state and federal climate emissions goals. 

People spend 90% of their time indoors, and if there are gas appliances inside your home, that air is often more polluted than outdoor air. It’s been proven that children who live in homes with gas stoves are 42% more likely to suffer asthma symptoms than those with electric stoves – a similar scenario exists with heat pumps versus furnaces. 

And, if you are concerned in the slightest about the environment and air quality, you'll be interested to find that fossil fuels used specifically to heat homes and buildings generate 560 million tons of carbon dioxide each year – one-tenth of total US emissions.  

If saving energy, natural gas infrastructure issues, and air quality hasn’t convinced you, consider that Rocky Mountain Institute research shows that building a new all-electric, single-family home is less expensive than building a new house that relies on gas, no matter where you live. It’s no longer a question of “if,” it’s “when” we completely convert to electric-powered heating sources for home comfort. 

What's the Best Heat Pump? Geothermal or Air-Source?

Alright, you’re on board with using a heat pump powered by electricity to keep your home comfortable, so which is better, geothermal heat pumps or air-source (ductless, mini-split, VRF – to name a few) heat pumps?  

As mentioned earlier, geothermal is more energy-efficient at 300% to 500% when compared to air-source at 250% to 290%. Geothermal handles extreme temperatures without significant spikes in energy use and associated costs because it’s transferring heat from the consistent temperature below ground. Air-source systems must fight to dramatically heat up or cool down outdoor air in order for them to keep your home comfortable. 

In a real-life case study comparing an air-to-air heat pump to a geothermal heat pump in Jacksonville, FL, geothermal costs 42% less on an annual basis to provide heating, cooling, and hot water.  

In a two-year study conducted by the American Society of Heating, Refrigerating, and Air-Conditioning Engineers (ASHRAE), the organization compared geothermal (also known as a ground source heat pump) to a variable refrigerant flow (VRF) system (a high-performance air-source heat pump). The systems were installed in the same building on different floors of ASHRAE’s 31,000 sq. ft. headquarters with all variables taken into account. While HVAC comparisons aren’t always “apples to apples,” this one was. Over a two-year period, they found that the air-to-air heat pump (VRF) solution used "twice as much energy" as the geothermal system. In fact, the geothermal system used an average of 44% less energy than the air-source heat pump. In every month but the first month of the study, the geothermal system tackled its heating and cooling work at far lower energy use per square foot in comparison to the air-source heat pump. Since the premise of the rise in energy prices is to find efficient ways to conserve energy and use it effectively, geothermal is the only true solution. 

A Real Life Example of Geothermal Lowering the Energy Demand

To achieve beneficial electrification, geothermal heat pumps are a necessity. But what is beneficial electrification? Beneficial electrification is electrification that saves consumers money long-term, reduces negative environmental impact, and facilitates better grid management. To be considered “beneficial,” electrification only has to meet one of those requirements without negatively affecting the other two. Studies, like the one ASHRAE conducted and one from the Heating, Refrigeration and Air Conditioning Institute of Canada (HRAI), show that geothermal heat pumps meet all three of these requirements and doesn’t adversely affect at all.  

A study titled, Implications of Policy-Driven Electrification in Canada, was prepared by ICF for the Canadian Gas Assocation. In that study, the assumption was made that air-source heat pumps would be adopted to provide heating and cooling. Under that assumption, it would be very costly – up to $1.4 trillion in the most expensive scenario – to transition Canadians to an all-electric model by 2050. Based on this information, Dunsky and HRAI partnered to evaluate the same scenario using ground source heat pumps instead of air-source heat pumps. If ground source heat pumps took 100% of market share in the pursuit of beneficial electrification, then Canadians could save almost $500 billion, instead of a net cost of up to $1.4 trillion. Even at a 30% adoption rate of geothermal, Canadians would enjoy a net savings of $148 billion. With geothermal, this study clearly showed that Canada can decarbonize without needing massive electrical system upgrades. 

It’s one thing to say geothermal lowers peak electrical supply requirements with a study, and it’s another to see it play out in real life. Whisper Valley, developed in partnership with EcoSmart Solution, is a master-plan community in Austin, TX where each home offers zero-energy capable living at an affordable price. On average, homeowners at Whisper Valley save $1,250+ per year in utility savings, depending on their personal energy behaviors. This is made possible by a combination of efficient building techniques, geothermal heating and cooling, and solar PV arrays. 

 In February of 2021, Austin, TX experienced a devastating winter storm. Millions across the state were left without power in freezing temperatures. While many pointed fingers at the shortcomings of Texas’ electrical grid, Whisper Valley’s use of EcoSmart’s GeoGrid kept Whisper Valley homeowners comfortable during the worst of conditions. The GeoGrid is a geothermal district system, so instead of each home having its own ground loop field, the GeoGrid offers more of a hybrid approach. Each home has a portion of its own ground loop field but pulls the majority of its needs from the community-wide system. 

Thanks to geothermal and solar, data from the EcoSmart Solution Test House showed very low energy use during the entire vortex. Homeowners were able to stay comfortable when it was at or below freezing temperatures without putting any kind of strain on the electrical grid. 

While the many benefits of geothermal always make it a good option for homeowners, volatile energy prices make us stop and think about the long-term implications of our HVAC choices. If you’re ready for low, predictable utility bills no matter the economic or seasonal climate, we can help you find an installer today.

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ABOUT THE AUTHOR

Mallory Fohne
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