ECO: Geothermal?

A geothermal heating and cooling system just might be the solution to contend with a brutal economy and accelerating climate change.

The system, say proponents, not only slashes energy costs by up to 70 per cent, but also reduces household greenhouse gas emissions. Should you start digging up your yard? Read on.

First, some background.

Also known as a ground-source heat pump, a geothermal system consists of a closed loop sunk deep into the ground or, if you're on a larger rural lot, installed horizontally below frost level. An electric pump in the basement pushes a mixture of ethanol and water through the loop. In the winter, the system draws the earth's warmth into a heat exchanger that concentrates the energy and releases it through the house as heat, usually via a forced-air or radiant-floor system. In the summer, the process is reversed: The system draws heat from the house and expels it into the earth.

An alternative is the open-loop system. It uses well water for heating and cooling, returning the water to the earth afterward. Geothermal systems also typically preheat water for your hot-water tank, a major source of household energy consumption.

The sole operating cost of geothermal is electricity to power the pump.

There are upward of 40,000 installations in homes and commercial buildings across Canada, with an annual growth rate of roughly 100 per cent, says Ted Kantrowitz, vice-president of the Canadian GeoExchange Coalition (CGC). To earn a government rebate in Canada, a geothermal system must carry CGC certification.

"They're one of the best investments a homeowner can make after insulation and weatherproofing," Kantrowitz says.

While the CGC doesn't have Canadian figures on greenhouse-gas savings from going geothermal, it's estimated that emission reductions in the United States are equivalent to removing more than 1.2 million cars from the road.

Ottawa resident Larry Ross is sold on geothermal. Last year, he replaced the aging forced-air furnace in his 2,500-square-foot home with a NextEnergy-Tranquility 27 system.

"It's been great," he says. "I've kept a daily log of our hydro use, and even on the coldest day I calculate it's costing us $7 to heat the house. We were spending $11 or $12 a day with forced air."

So what's geothermal's downside? Cost.

The systems run $25,000 to $40,000 depending on brand, soil conditions and other factors. Even with government rebates of $7,000 for retrofits -- rebates don't apply to new construction -- that's a chunk of change. And it's a double-whammy when you factor in borrowing costs (a $28,000 loan will cost about $3,000 if repaid over five years, but much more if it's folded into a 25-year mortgage).

By comparison, a high-efficiency natural-gas system in a new home runs about $15,000 and a retrofit about $5,000. Government rebates will shave up to $1,000 off the retrofit.

One final consideration on the plus side of the ledger: As green consciousness takes hold and energy prices spiral, resale homes with geothermal systems may start to command a premium price. In the United States, the National Association of Realtors' Appraisal Journal estimates a $10 to $25 increase in a home's value for every $1 reduction in energy bills.

Bottom line: If you're considering geothermal, huddle with a couple of geothermal experts, your banker and a crystal ball to get the full picture.

"Geothermal? Dig this." prepared by Patrick Langston/Ottawa Citizen/Vancouver Province)