Western updates geothermal heat pump marketing guide

Geo Heat Pumps: Leading Energy Utility Marketing Programs is available on CD to Western customers considering offering a GHP program to their consumers. (Artwork by Market Development Group)

Some call it a renewable energy technology; others, the most energy-efficient heating, ventilation and air conditioning (HVAC) system available. Either way, more and more consumers are calling their utilities about geothermal heat pumps (GHPs), and Western wants to make sure our customers have the latest information about this heating-and-cooling product.

Last year, Western teamed up with partners American Public Power Association and DOE's Geothermal Technologies Program to release the third edition of Geo Heat Pumps: Leading Energy Utility Marketing Programs. The report explains the benefits GHPs offer customers and power providers, describes the equipment's market potential and appeal, and looks at marketing strategies that have been successful for some utilities.

Since the report's release, new utility programs promoting GHPs have popped up all over the country, and installations are on the rise. Although GHPs have been around for decades, the industry has learned a thing or two over the past year that will help utilities increase customer satisfaction with the technology.

Adjusting for rising costs

Katherine Johnson of Market Development Group has incorporated those lessons into the latest version of the marketing guide. "Changes in the market make it necessary to update the book periodically to keep the tools relevant," said Johnson, who authored the first report in 1996.

Equipment and power costs, perhaps the biggest change since 1996, are reflected in the table entitled Average Capital and Operating Costs for Geothermal Heat Pumps in 2008 Dollars. Using a house in Connecticut as the example, the table compares installation and operating costs of a conventional air conditioner and fuel-oil boiler with those of a GHP. "Obviously, everything is more expensive than it was 12 years ago," noted Johnson. "But the story the table tells is that GHPs can be an even better investment now than they were in 1996."

She is quick to add that savings will differ throughout the country, depending on electricity rates, available incentives and the type of HVAC equipment the GHP is replacing. However, Johnson said, "The cost of energy really only goes in one direction over time, so the figures are likely to improve for GHPs across the board."

New emphasis on building integration

Other changes were driven in part by input Johnson received at workshops like the Geothermal Technologies workshop Western co-sponsored earlier this year. HVAC, she explained, is not just a stand-alone piece of equipment, but one component of the integrated system that is the building. "As more utilities launched GHP marketing programs, we discovered key factors that cost calculator tools didn't take into account," Johnson said.

Johnson gave a presentation on GHP Analytical Tools at the workshop highlighting the calculators that are included with the report. The calculators are MS Excel worksheets from the residential and the utility perspectives that compute the summary of benefits from information the user provides. The assumptions can be changed to match different scenarios.

Ductwork is a factor that the previous calculators assumed, but electric resistance heating systems, for example, don't require ducts to distribute heat.  A homeowner replacing that system with a GHP would have the added cost of installing ductwork to distribute the conditioned air. The new Residential Geothermal Heat Pump Calculator now includes scenarios for installing new ductwork and for tuning up existing ductwork. "The good news is that, even with ductwork, the GHP is still cost-effective," said Johnson. "Ductwork could add four to five years to the payback, but that's on a system with 25-year lifespan."

Including calculations for a ductwork tune-up is also part of the report's greater focus on building envelopes. "You can't understate the importance of the building envelope in an energy-efficiency plan," said Johnson. "It doesn't matter how efficient your HVAC system is, if the building is leaky and poorly insulated, it's going to waste energy."

Part of new energy future

Utilities and municipalities coping with load growth and tougher regulations for powerplants are increasingly embracing the GHP as a conservation tool.  The Colorado Governor's Energy Office (GEO) recently contracted with Market Development Group to create a database of GHP installations and case studies throughout the state.

The GHP database is intended to give GEO a detailed picture of how many systems are operating in the state, and in what kind of facilities. "The goal is to determine how GHPs fit into the state's overall renewable energy strategy," said Johnson. "The database will also be a resource for utilities and vendors."

Joanie Matranga of GEO plans to provide an update on the database during her presentation at the Colorado Utility Efficiency Exchange, Oct. 15-17, in Aspen Colo. Her presentation will cover GEO's efforts to engage state utilities in achieving the goals of the Governor's New Energy Economy.  Those efforts include programs promoting demand-side management measures, such as widespread deployment of GHPs, as a means to contain rising wholesale power costs.

Utilities can request a copy of the updated Geo Heat Pumps: Leading Energy Utility Marketing Programs and calculators from Randy Manion, Western's Renewable Energy Manager. "GHPs offer utilities an excellent opportunity to shape and control their loads, while strengthening customer relations," said Manion. "And the report is a great resource for starting a GHP marketing program."

Resources

Geothermal heat pump fact sheet

American Public Power Association

Geothermal Technologies Program

Market Development Group

GHP Analytical Tools (356 kb .ppt)

Colorado Governor's Energy Office

Colorado Utility Efficiency Exchange

People

Katherine Johnson

Randy Manion

Related articles

Energy Services Bulletin, June 2008
Geothermal workshops to focus on technologies

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