Energy Costs: For obvious reasons, this answer depends on the type of system being installed and the type of system we are comparing to. In general, because of the discrepancy between the cost of natural gas and electricity per unit of energy, the more cooling dominant a building is, the higher the savings. A heating only building might not see much savings for the first few years until natural gas prices normalize. Whereas cooling dominant buildings will see significant savings immediately. A commercial building should expect energy savings in the range of 25-50% depending on how cooling dominant it is and what system we are comparing to.
Maintenance Costs: Several ASHRAE studies comparing maintenance costs for commercial buildings, including those by Hughes et al, Cane et al, as well as Dohrmann and Alareza, have found geothermal systems to have some of the lowest maintenance costs of any other system. In some cases the studies found maintenance costs of Geothermal systems to be as little as 1/3rd of traditional systems. Conservatively, as long as the system was designed and installed properly, clients can expect the maintenance costs for geothermal systems to be 50% of those of a traditional system.
Although this question is almost impossible to answer without knowing the type of building, size of system and type of system we are comparing to, we can provide some guidelines that indicate which buildings will have the most attractive paybacks or returns on investment (also see next question about incentives as these can have a tremendous impact on the payback). Firstly, we should mention that geothermal systems aren't always more expensive than traditional systems. For larger commercial buildings, especially with more complex heating and cooling systems (not just rooftop units), the paybacks for geothermal systems can be less than 2 years, if not immediate. We have done designs for buildings as small as 50,000 ft2 that had a 2 year payback and a 20 year return on investment of over 15%. This brings us to our first guideline. The larger the building, the better the payback. Economies of scale help keep drilling costs down, but also, larger buildings tend to be more cooling dominant and have more complex mechanical systems (to compare to). This point brings up our next guideline, the more cooling dominant a building is, the better the payback. The reason for this is simple. Natural gas currently costs about 1/4 of the price per unit of energy as does electricity. So heating dominant buildings are forced to compare energy costs to cheap natural gas, whereas cooling dominant buildings use electricity to cool regardless of the system; so the comparison uses the same energy cost of electricity. Because geothermal systems are typically twice as efficient at cooling than a traditional system, the savings are increased, improving the payback.
The main thing to keep in mind, is, what are we comparing to? Is it an apples to apples comparison? For example, if we consider a large warehouse that is heating only, and uses cheap radiant tube heaters, compared to a geothermal system, this payback will never be attractive. Even though it is a large building, it is not only heating dominant, but we aren't cooling in the summer so we aren't comparing apples to apples. However, if we consider a larger office building (which will be cooling dominant) which uses a Variable Air Volume (VAV) mechanical system, this comparison looks far more interesting. The best thing to do is do a quick feasibility study to determine whether geothermal is suitable for a certain application. However, as a guideline, here are some buildings that are great fits for geothermal (also see question below for a discussion on the accelerated capital cost allowance which can drastically improve paybacks):
Good candidates for geothermal heating/cooling systems (rated from , to ):
Office Buildings (<30,000 ft2)
Office Buildings (>50,000ft2)
Schools (large field for cheaper horizontal system)
Retail spaces (very high lighting and people loads)
Multi-storey residential (the bigger the better, well insulated)
Hotels (large variance of loads, for balancing)
Hospitals (very cooling dominant, large variance of loads)
Sports Centres (heat rejected from ice making used to heat pool or building)
Public Buildings (owned for long time, even 8 year payback makes sense)
Low Temperature (Ambient) District Energy
While in Alberta there aren't any government rebates or grants available to help pay for geothermal systems, Canada does have a special CCA Class (43.2) available for depreciating clean assets. It is called the "Accelerated Capital Cost Allowance (ACCA) for Clean Energy Generation" and it allows the depreciation of green assets (Geothermal (including heat pumps), wind, solar etc...) on a 50 percent per year declining balance basis. Basically, the capital cost allowance allows clients to depreciate their assets much quicker than normally allowed under the tax code. If we take for example a $250,000 geothermal system, under normal tax codes, after 3 years, only 10% of the asset would be depreciated (2% in the first year, 4% every year after), equating to a tax credit of approximately $8,500. Under the CCA Class 43.2 however, 25% of the asset is depreciated in the first year (first year rule) and then 50% every year after, meaning after 3 years, 81% of the asset is depreciated, equating to a tax credit of $71,000! We have found that the accelerated capital cost allowance can sometimes halve the payback time period and we strongly recommend taking advantage of it. The savings will depend on the client's tax rates as well as other factors so we highly recommend that clients speak to their accountants, but more information can be found here.
Note: One of the great things about the accelerated capital cost allowance is that as mentioned, the interior building heat pumps can be part of the depreciation calculation. For example, let's say we are comparing the paybacks for a boiler/chiller system and a geothermal system where both systems utilize heat pumps for the building distribution system. Under the rules of the ACCA, not only can you take advantage of the accelerated depreciation for the geothermal ground loop, you can also depreciate the building heat pumps using the same method. You cannot do this for the boiler/chiller system, which means that for the geothermal case, we can realize an extra tax credit for the building heat pumps on top of the ground loop. Let's say that the geothermal system was estimated to be $100,000 more to install. Let's also assume for ease of calculation that the cost of the ground loop was $250,000 and the cost of the building heat pumps is also $250,000. The traditional boiler/chiller would have a tax credit of $8,500 after 3 years for the heat pumps, and approximately $5,000 more for the boiler/chiller ($150,000 cost). With the geothermal system however, you could take a $71,000 credit not just for the ground loop, but also for the heat pumps, which means after 3 years, the tax credits equal $142,000 which is $128,500 more than the traditional system. This of course is more than the initial premium of $100,000. We can see how important it is to take advantage of the accelerated capital cost allowance.
Besides the energy and maintenance costs, one of the key factors in lifecycle cost is also the lifespan of the system itself. Traditional boiler/chiller systems have a lifespan of approximately 15-20 years whereas heat pump systems have a lifespan of 22-25 years and the ground loop will last 100+ years. This means over the life of the building, the geothermal system will not be replaced as often. Along with lower energy and maintenance costs, over even a short 20 year lifecycle, geothermal systems almost always have lower lifecycle costs. Over a 50 year lifecycle, geothermal systems would be expected to save even more compared to a traditional system.
An ASHRAE article which includes a detailed analysis of maintenance costs for GSHP systems as compared to traditional HVAC systems.
As the title suggests, a lot of good information for people interested in installing geo in their home.
We very much welcome furthering the discussion on these topics so please feel free to post comments and/or questions below and we will be happy to respond to them.