If you're looking to make a large impact on your monthly utility bills, your research will undoubtedly tell you that you need to do one (or both) of two things: Generate your own power or drastically reduce your energy usage. In most commercial and residential situations, the best option for power generation is going to be solar PV modules or panels. Most other sources of renewable energy generation aren't commonly available or accessible. Since, according to EnergyStar.gov, the average household's energy bills are 55% heating, cooling, and hot water, the HVAC system is the largest place for savings. Geothermal is the most efficient and sustainable option in this category, so it's a strong option for families who want to reduce their energy spending.
However, most people can't install both technologies at once. Installing both would be a large project with lots of logistics and a hefty combined installation cost, so it's more reasonable to install either geothermal OR solar, begin to see the benefits, and take the next step a few years down the road. The question is this: Which one should you install first? Let's look at the benefits of each technology, how they fit into the timeline of creating a sustainable home, and which technology you should go with first to get the maximum dollar-for-dollar returns.
At the end of the day, you cannot go wrong with either of these renewable upgrades, as long as they're sized and installed correctly.
Solar Photovoltaic modules (solar PV) are a worthy investment because, as of writing this article, they are the most accessible way for home and building owners to begin producing their own power. Other methods of energy generation are cost, space, or time prohibitive. Homeowners that have solar PV installed experience quite a range of benefits. First, their homes are, on average, worth 17% more than comparable homes and sell 20% faster according to NREL (National Renewable Energy Laboratory). Solar PV is also a sustainable investment, with most manufacturers boasting only a 20% decrease in performance after 25 years of use. Widespread adoption of solar also reduces the strain on the power grid, especially at peak times, while reducing the individual's reliance on that same grid.
While solar PV is great, its only function is to produce electricity for the home. Geothermal is a multi-functional system that heats, cools, provides hot water, and regulates the humidity in your home. The main strength of this technology is its industry-topping efficiency ratings. The underground pipe system (or loop) pulls enough energy from the earth to give geothermal units efficiencies of over 500%. This means that for every 1 unit of energy the unit draws from the grid, it's outputting 5 units of useful heating and cooling work. When it comes to your wallet, geothermal systems can save the average homeowner up to 70% on heating and cooling costs, and up to 40% on water heating expenses. For many people, this equates to thousands of dollars per year, and tens of thousands over the life span of the system. Geothermal is also widely regarded as the most consistent and comfortable method of conditioning the air inside your home or structure. Due to the constant flow of energy from the loop system and the precise control that the internal components have over that energy, homes with geothermal have small temperature swings compared to homes with traditional systems. As long as the homeowner sets up their system for success in harsh weather, geothermal is an efficient solution in almost any climate.
The four-Step Process
It's clear, both solar PV and geothermal have significant benefits and would be a worthy energy-efficient upgrade to add to your home, but that's not necessarily the question here. If you were to choose one project to complete first, which one makes the most sense? Well, just like in math class, there's an order of operations to this problem. If you're looking to maximize your return on investing into your home or building while making consistent and measurable gains in your energy independence, this four-step process is the best way to go about making those upgrades.
If solar is installed with traditional HVAC systems, you're dealing with volatility in multiple energy sources. Switching to geothermal provides the consistency and reliability you need for a solar array to predictably perform to your home's needs.
Once again, beginning with a reduced energy load can save the homeowner thousands on a solar array, but that doesn't work the other way around! A geothermal system allows for a smaller solar investment, but an oversized solar PV array does not allow for a smaller geothermal system down the line.
Let's break this down with real numbers! For the following example, we're going to be looking at a 2,500ft2 all-electric home in the midwest that's about 10 years old. Home #1 will have a 3-ton geothermal system that handles heating, cooling, and hot water, and Home #2 will have a similarly-sized air-source heat pump performing those same roles. From here, we can look at the number of solar modules needed to cover 100% of the home's electric needs as well as the estimated cost!
| Home #1 (Geothermal) | Home #2 (Air-Source) | |
| Annual Energy Use (kW) | 12.5kW | 18.2kW |
| Solar Modules Needed | ~30 | ~44 |
| Price Per Watt | $3.02 | $3.02 |
| Estimated Solar Investment | $37,750 | $54,964 |
So, what's the total solar installation cost savings in the geothermal-first home?
$17,214
While, in the real world, estimations like this are extremely complex, this apples-to-apples comparison shows just how powerful geothermal is and how much you could save in the long run by choosing to boost the efficiency of your home first.
A geothermal heat pump should be installed before a solar PV system, but not just for the cost savings! Once your geothermal system is installed, you'll start to feel the benefits long before your first utility bill hits the mailbox. Some of the immediate benefits include:
Solar PV is absolutely a great investment! Solar grants homeowners the unique ability to generate their own electricity, reduce their reliance on the grid, and gain energy independence. Still, like many projects that come with homeownership, it's not some magic bullet! To maximize your savings and reduce headaches down the line, an investment in your home like solar PV or geothermal needs to be approached with a plan!
Reducing your utility costs by up to 70% with geothermal is a great first step in electrifying your home, as it will make it much more attainable to install solar PV and battery backup down the road! If you're interested in learning more about equipping your home with geothermal or solar PV, we can help! Our team of experts can direct you to the right installer, design your geothermal and solar PV systems, and guide you through this whole process.