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Does Geothermal Raise the Electric Bill?

Published in Geothermal Energy Costs 4 mins read

While geothermal heat pump systems require electricity to operate their internal components, leading to an increase in your specific electric usage for heating and cooling, they typically lower your overall electric bill by providing significantly more efficient climate control than traditional HVAC systems.

Understanding Geothermal Electricity Usage

A geothermal heat pump system utilizes electricity to power its compressor, pump, and fan. These components are essential for circulating refrigerant and moving heat between your home and the stable temperatures of the earth. This means your electric usage will increase specifically for the operation of the geothermal system itself.

However, it's crucial to understand that geothermal systems don't create heat; they transfer it. This heat transfer process is far more efficient than the heat generation process of conventional furnaces or air conditioners, which rely on burning fossil fuels or converting electricity directly into heat.

How Geothermal Can Lower Your Overall Bill

The efficiency of geothermal systems often translates into substantial savings on your total energy costs, which is reflected in a lower overall electric bill. Here’s why:

  • Exceptional Efficiency: Geothermal systems typically have a high Coefficient of Performance (CoP) for heating and Energy Efficiency Ratio (EER) for cooling, meaning they deliver multiple units of heating or cooling for every unit of electricity consumed.
  • Reduced Energy Consumption: By leveraging the stable underground temperatures, geothermal heat pumps require less energy to maintain comfortable indoor temperatures compared to conventional systems that struggle against extreme outdoor air temperatures.
  • Seasonal Savings: Your electric bill will likely be lower in the summer than you paid previously, as geothermal systems are particularly efficient at cooling by dissipating heat into the cooler ground. The increased electric usage from the geothermal system's operation is generally offset by the significant savings from its efficiency.

Factors Influencing Your Bill

Several factors can influence the exact impact of a geothermal system on your electric bill:

  • Climate: The more extreme your local climate, the greater the potential for savings with geothermal due to its consistent performance.
  • Home Insulation: A well-insulated home will retain heat better in winter and keep heat out in summer, maximizing the efficiency of your geothermal system and further reducing energy needs.
  • Electricity Rates: Local electricity costs will directly impact the operational expense of your system.
  • Previous HVAC System: The amount you save depends heavily on the efficiency and energy source of your prior heating and cooling system. Replacing an old, inefficient electric furnace, for example, will likely yield more dramatic savings than replacing a newer, high-efficiency natural gas system.
  • System Sizing and Installation: A properly sized and expertly installed geothermal system is critical for optimal performance and maximum energy savings.

Geothermal vs. Traditional HVAC Energy Costs

To illustrate the difference, consider the fundamental approaches to heating and cooling:

Aspect Traditional HVAC System (e.g., Air Source Heat Pump, Furnace) Geothermal Heat Pump System
Primary Energy Use Electricity (for AC/Air Source HP), Natural Gas/Oil (for Furnace) Electricity (to move heat)
Heat Source/Sink Outdoor Air (variable temperatures) Stable Ground Temperatures (consistent efficiency)
Efficiency Level Varies significantly with outdoor temperature High, consistent efficiency regardless of outdoor temperature
Overall Bill Impact Often higher in peak seasons due to less efficient operation Often lower year-round, especially in summer due to superior cooling efficiency
Typical Savings Variable Up to 70% on heating and cooling costs compared to conventional systems

In summary, while there is an increase in the electricity consumed by the geothermal unit itself, the high efficiency of the technology often leads to a net reduction in your total monthly electric bill, especially when considering your home's overall heating and cooling needs throughout the year.