Is Geothermal Power Cost Effective?

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  • Written By: Luke Arthur
  • Edited By: Heather Bailey
  • Last Modified Date: 16 May 2020
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Using geothermal energy has become a popular way to heat a home in recent years. One of the big questions most people have about this type of system is whether or not it is cost effective. When trying to determine if using geothermal is worth it, a homeowner should look at the initial costs of the project, the ongoing costs, and future price increases.

Geothermal systems utilize at least two wells that are drilled into the ground. Hot water is pumped up through one of the wells and then pumped back down the other well. The heat from the water is used to heat the air inside the house. Many people prefer this type of heat because it is renewable and good for the environment.

One of the big factors to consider with this system is the initial cost. It is usually substantial. A homeowner is going to have to put a large amount of money into the purchase of the equipment and installation. It would not be uncommon for a homeowner to spend somewhere between $20,000 US Dollars (USD) and $30,000 USD to have the system installed. This is much more than the initial cost of comparable systems.

Another factor to consider with a geothermal system is the ongoing costs. Geothermal systems are going to have much lower ongoing costs than any other type of heating system. With geothermal, a homeowner should not have to worry about repairs or any other costs once the system is up and running. The homeowner will not have to pay an ongoing bill for natural gas to keep the house warm. Once the system is working, the homeowner can keep running it without much additional cost. This drastic savings can help make up for the large initial cost.

The last thing an individual should consider when thinking about geothermal power is the cost of future price increases. When a homeowner is relying on natural gas for heat, he or she is going to have to deal with price increases over the years. Natural gas is a limited resource and it is only going to increase in price.

If a homeowner is going to be living in a house for the long term, the decision to go with geothermal can be cost-effective. This is not something that should be done if the homeowner is going to move within a few years. It will take many years to make up for the large initial purchase.

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