Geothermal Heat Pumps (GHP) are a niche market. They shouldn’t be.
A Better Mousetrap?
Ralph Waldo Emerson never said “Build a better mousetrap, and the world will beat a path to your door.” The mousetrap that likely inspired the misquote was invented seven years after his death. Unfortunately, many people take it literally. GHPs have all the hallmarks of a better mousetrap: They do the job of heating and cooling a building more efficiently than any other option. Despite the larger up-front cost, they are a mature technology and usually the most economic option for buildings that can accommodate them.
Not only can GHPs cut energy costs for heating and cooling by up to 80%, they can also provide other benefits such as essentially free hot water when in cooling mode, lower reliance on fossil fuels, and the elimination of above ground outdoor equipment. These advantages have earned GHPs a small but dedicated cult of true believers, but not broad market acceptance.
The world has not yet beaten a path to the GHP door. Instead, GHPs have a slim and only modestly growing market share. The North American geothermal market was only $102 million in 2012. Frost and Sullivan projects it to reach $148 million by 2017. The entire market for climate control products was $13 billion in 2012, and they project it to reach $15 billion in 2017. That gives GHPs a 0.8% market share in 2012, growing to a 1% market share in 2017. While the GHP market is projected to grow at a 7.8% annualized rate, much of that is due to overall market growth. GHP’s market share is only expected to grow at a 4.7% annual rate.
Although that estimate of market share is biased downward because not all buildings can accommodate GHPs, this does not bias the calculations of annual growth rate in market share. Less than 5% annual market share growth is clearly not the type of market transformation many would expect from a “better mousetrap.”
I struck a few raw nerves when I asked if air source heat pumps are a threat to geothermal heat pump suppliers last month, despite the fact that I answered my own question with a “No.”
Except in moderate climates, super-insulated homes, or situations where the installation of a geothermal heat pump (GHP) would be particularly difficult, GHPs have the better economics. This is despite recent advances in air source heat pump (ASHP) technology, which led me to ask the question in the first place. ASHPs don’t provide hot water, while many GHP systems can. Also, as the recent heavy snows in the Northeast demonstrated, there are some advantages to having a heat exchanger which is not exposed to the elements (see pic).
Given all these advantages, why the raw nerves? I suspect it’s because geothermal heat pump sales continue to disappoint and proponents are looking for someone to blame.
ASHPs in Net-Zero Buildings
Another target of geothermal advocates’ ire is Marc Rosenbaum (who teaches the online Net Zero Energy Homes course in the Northeast Sustainable Energy Association’s Building Energy Masters Series.) He also raised hackles when he recommended minisplit air source heat pumps (ASHPs) for most single family net zero homes (I quoted Rosenbaum extensively in the previous article.)
He relates the story of the Putney School’s 16,000-square-foot Net-Zero Field House. The team designing this building modeled its heating costs using a GHP, and also using an ASHPs with additional solar photovoltaics sufficient to provide the extra electricity needed to run the ASHPs. They found that it was cheaper to expand the solar system to power the ASHPs than it would have been to pay the extra installation costs of a GHP. Furthermore, the price of solar has fallen significantly since the Putney Field House was built; the price of the ground loop for a GHP has not.
Nevertheless, Rosenbaum’s preference for ASHPs in highly insulated buildings does nothing to explain GHPs’ low market share growth rate. Net Zero buildings are the exception, not the rule, and have a far lower market share than geothermal heat pumps. When the heating load is very low, the operating cost advantage from the greater efficiency of GHPs is not enough to repay the additional installation costs. That is not the case in 99.9% of new and existing buildings today.