Commercial Geothermal Heat Pumps – What Are the Benefits?
We have gone into what geothermal systems are before. But, to recap, these systems work similarly to other HVAC structures except geothermal utilizes the ground rather than air. What we haven’t discussed is how geothermal heat pumps (GHP) work in large buildings. Since incorporating green technology is getting more popular so are commercial geothermal heat pumps. Not only are they eco-friendly they also offer low operating costs. So, for this article, let’s talk about the three main benefits of incorporating GHPs into your building.
Benefit One – ROI
On our end, we are seeing an uptick in commercial growth for geothermal technologies. Specifically in military bases, apartment complexes, office buildings, warehouses, etc. It is particularly helpful in areas that experience constant or extreme heat. While Maryland might not see that way, our summers can be humid and hot. This can take a toll on outdoor HVAC equipment. That is why we see more developers looking for more sustainable solutions.
Why we specifically talk about return on investment is because initial installation costs are high. However, you make this up in a variety of ways. Geothermal heat pumps cost less to run (up to 20-50% less) and have higher efficiency. They also lower maintenance requirements and are long-lasting. Depending on the system, it can last 10+ years compared to conventional HVAC systems. Again, they also aren’t outside exposed to the elements which give them a longer lifespan.
Benefit Two – Tax Credits
If you are concerned about the upfront costs, they can be offset. As new and greener technology emerges, investment tax credits are available from the federal government. The credit can help with the additional costs of installing or retrofitting a commercial geothermal heat pump. However, it is decreasing as we write this. Initially, the tax credit was much higher but is decreasing by the year.
As of last year, 2019, it is estimated you could save over $300K in taxes over a 5 year period. This is based on installing a new geothermal heat pump into an office building with a total cost of $1M. There is a lot that goes into business energy investment tax credit, so we recommend you speak to your financial advisor. The main takeaway though is sooner is better than later.
Benefit Three – Lower Footprint
Last, but certainly not least, GHP help lower your operating footprint. Geothermal is being adopted at a higher rate to combat global warming and decarbonization efforts. They require no fossil fuels and produce significantly less carbon dioxide compared to traditional systems. As of right now, it is one of the best options available for the environment.
The U.S. Department of Energy (DOE) has said that around 40% of our country’s carbon emissions come from HVAC systems. That’s a lot. You are talking the same amount as cars and transportation. Now, while this figure combines residential and commercial, about 18% of that is commercial. In addition, energy consumption decreased around 30-50% with GHPs. Now, these seem like a lot of random percentages but it all adds up to less impact on our environment. This isn’t just attractive to business investors but also consumers. Combined with lower operating costs and tax benefits, it’s an attractive alternative.