Manager's Column
Authored by: Richard Fowler
Should I spend money on a ground source heat pump (GSHP) or a solar unit?
First off, a ground source heat pump (also called geothermal), if laid out horizontally, is about 75% solar and 25% core earth heat. So, it is a “renewable” energy source. GSHP’s don’t create heat in the winter, they move heat from the ground to the house. The loops are placed 4-6 feet in the ground and at that depth the temperature is 57° year-round, much like the temperature in a cave stays constant year-round. It does the same thing in the summer, only in reverse, moving cooling from the ground into the house. The largest solar collector battery in the world is Mother Earth herself. This year (2021) is the last year for the Investment Tax credit of 22% on GSHP. So, if you were thinking about installing a GSHP, you’re going to want to take advantage of this tax credit.
*NOTE: the Inflation Reduction Act passed in September of 2022 increased the tax credit on GSHP's to 30% through 2032.
In addition to the 22% tax credit, Howard Electric Cooperative and Associated Electric Cooperative have combined to offer an $850/per ton rebate on ground source heat pumps. So, for a 4-ton unit, that’s $3,400 off the price of the unit. For a typical $20,000 unit, that’s a $4,400 tax credit plus a $3,400 rebate. The payback for that investment is usually 9 years or less because the energy savings are 60%. Geothermal requires no outdoor equipment and works 24/7. It is the most energy efficient heating and cooling system available. Over 170 of Howard Electric’s members have a GSHP system. Both the Fayette School and the New Franklin School also have a GSHP system.
Currently 25 of Howard Electric’s members have solar. The average price of these solar units is $27,400. Solar panels were, just this year, given an increase in their investment tax credit to 26%. We have seen quite a variance on what these solar units will generate, some good and some not so good. We encourage you to contact our office and allow us to share some anonymous data we have collected from solar units on our system.
Why doesn’t Associated and Howard Electric Cooperative offer rebates on solar units like they do on GSHP units?
In order to keep your rates as low as possible, we offer rebates on high energy efficient appliances. This includes a GSHP unit because they lower the KW demand, which in turn delays the building of the next power plant.
Associated Electric Cooperative builds enough power plants to take care of Missouri Cooperative members on both the coldest and hottest days of the year. Ground source heat pumps reduce that peak compared to electric strip heat and therefore do delay the building of the next gas fired plant, plants that cost 100’s of millions to build. Associated could add a million solar panels to their generation mix and it wouldn’t delay the building of the next gas plant because the sun doesn’t shine when Associated is peaking on the coldest day in the winter months.
Factoring in cloudy days, solar panels typically generate about 18% of the time in Missouri. Ground source heat pumps use the earths stored solar heat 100% of the time and they are completely immune to weather conditions.
There are no toxic materials in the ground source heat pump loops, whereas solar panels often contain lead and cadmium (a carcinogen). A tornado in California broke 200,000 solar modules at Solar Farm Desert Sunlight contaminating the groundwater with Cadmium. When a hurricane hit Puerto Rico last September, 40% of the islands solar panels were destroyed. Solar panels are not recommended for regular landfill disposals.
If you decide to go with solar panels and the solar salesman uses your Howard Electric bill to calculate what your savings would be, keep in mind that built in to your rates is a $32 availability charge that solar cannot offset, and there is a demand charge, which cannot be offset with solar.
So, what are the benefits of solar?
The biggest benefit is built into our net meter laws which require utilities to credit back to our members a kWh charge at retail rates, up to the amount the house uses. Some members have purchased a big enough unit to cover all the kWh’s the house needs, so for them, they simply pay the service availability charge, the demand charge and any taxes that are due. When the solar salesman is calculating his perceived savings for you, please give us a call if you want a second opinion of potential savings. Solar panels will not eliminate service charges or demand charges and far too often solar salesmen over promise on savings. Ultimately, if you want to take advantage of solar power 24/7, the most efficient and cost savings way to do that would be thru a ground source heat pump.