B-Green Collaborative Green Energy e-Magazine: Interview with Melissa Aho, President of Ultra Geothermal, Inc.

Published February 22, 2010

In January, B-Green Collaborative published an article titled “Geothermal Your Home?” in which we discussed using geothermal systems to efficiently condition residential living space. To complement that article, we recently sat down and spoke with Melissa Aho, President of Ultra Geothermal, Inc. in Barrington, New Hampshire, a leading residential geothermal installer for New England. What follows is a summary of that interview.

B-Green Collaborative: Can you start off by telling us a little bit about Ultra Geothermal, such as how long you have been in the geothermal heat pump (GHP) business, the states you do business in, your basic GHP business strategy, and the mix of your business between residential and commercial?

Aho: Ultra Geothermal, Inc. is proud to be represented with employees that have been leaders in the heating and cooling industry for over 20 years. Initially, Ultra Heating & Cooling was a traditional HVAC company, and geothermal system installations made up only a small part of the business. That changed dramatically over the course of the last 5 years, and 3 years ago we became solely a geothermal company – or, as we like to say, an “all-green” company that does not install any fossil fuel systems. This was when we had taken on a company name change to become Ultra Geothermal, Inc. Two years ago we installed about 200 geothermal systems, and presently our installations number 2 to 3 per week. In all, we have installed about 700 systems in New Hampshire, northern Massachusetts and southern Maine.

Our goal is to provide customers with a quality geothermal system, specifically suited to the New England climate and geology. Much of the information available today about geothermal in the U.S. is based on applications in the southwest and midwest regions of the country. New England geothermal installations, however, present some unique challenges. Due to more extreme winter temperatures, heat pumps need to be sized according to heat loss, not heat gain. In addition to this, shallow soil conditions and an abundance of rock and ledge make vertical loop systems the clear choice over horizontal loop systems.

Nearly all of Ultra Geothermal’s installations are residential, typically ranging in home sizes of 1,500 to 5,000 square feet. However, we have installed geothermal systems in a number of very large 15,000 to 20,000 square foot residences. The few “commercial” projects we have been involved in are really more of a residential nature in terms of size and design. High quality residential installations are our specialty, and we will continue down that path in the future.

B-Green Collaborative: The EPA has said that GHPs are “the most energy-efficient, environmentally clean, and cost-effective space conditioning systems available”. Do you use claims like this to market your products? What other aspects about GHPs do you use to generate interest in their installation versus more traditional heating and cooling systems?

Aho: What the EPA has said is true – geothermal systems are without question the most efficient, clean and economically viable systems available for providing buildings with warm air in the winter and cool air in the summer. While this claim is part of our marketing strategy, there are other important selling points we make to our customers. Geothermal systems do not combust any fossil fuels, so there are no dangerous chemicals or fumes involved. These systems also run allergen free, providing a healthier environment for homeowners and their families. The components of a geothermal system are inside the home and underground, making for better aesthetics and these systems are quieter in operation than conventional HVAC systems, both inside and outside the home. Finally, geothermal systems run at efficiencies of 3.5 – 5.0 COP (Co-Efficient of Performance), which is similar to saying 350% to 500% efficient. This results in heating and cooling bills that are 25% to 70% lower than conventional systems.

B-Green Collaborative: What types of installations do you most typically do for residential applications – open loop, closed loop horizontal, closed loop vertical? What do you see as the major advantages of one or more of these installation approaches?

Aho: As I stated earlier, we focus on vertical systems which are much better suited to New England’s climate and geological characteristics. Homeowners have the choice of either open loop or closed loop vertical systems.

An open loop standing well column system takes advantage of a drilled well to move thermal energy from the ground into the heat pump (heating mode) or from the heat pump to the ground (cooling mode). Water is pumped from the well to the home through a polypropylene well pipe, using a variable speed, constant pressure pump and control package which saves electricity and prolongs the life of the well pump. Here in New Hampshire, in heating mode, the water entering the heat pump from the open column well system is at a temperature of approximately 50° F. The heat pump extracts thermal energy from the water by passing it over a refrigerant circuit, and then a heat exchanger is able to use the excess heat to provide hot air or hot water. This is used to warm the residence either through forced-air or radiant floor distribution systems. The water is then discharged back to the well at approximately 35 – 40°F. The “chilled” discharged water makes contact with the wall of the well as it travels down and is warmed back to about 50° F by the time it re-enters the well pump that is placed at the bottom of the water column. This becomes a cycle that supplies thermal energy to the home during the heating season. In the summer this process works in reverse, letting the earth become the heat sink and using the cooler water temperatures within the well column to cool the home.

For forced-air systems, a cooling mode is possible as the heat pump extracts thermal energy from the warm air in the residence and transfers it to the 50° F well water which then re-enters the well at approximately 60° – 65° F. The discharged water transfers heat through the walls of the open column well and returns to about 50° F by the time it re-enters the geothermal heat pump through the well column.

A closed loop vertical system utilizes bore holes drilled to depths of 100 to 500 feet into which u-bend loops of polypropylene pipe are placed and then connected to a header pipe system about 4–8 feet underground. Within the closed loops, an antifreeze and water solution is circulated and runs through a heat pump to extract (heating mode) and discharge (cooling mode) thermal energy from and to the earth much in the same fashion as the open loop system I just described.

Here in New Hampshire we are seeing the glycol and water solution in a closed loop system to have entering temperatures between 36° and 39° F, considerably cooler than the open loop system. What this means is that open loop systems sometimes are able to have the ground source heat pump sized smaller than closed loop systems to deliver the same BTU performance, which translates into less up-front costs. In addition to this, the installation costs of a closed loop ground source are usually slightly higher than open loop systems since they require the drilling of more holes in most cases.

The running costs for closed loop and open loop system generally balance each other out since the circulator pumps require significantly less electricity (usually around 1 amp per pump module), whereas the well pump on an open loop system can use on average 4 amps per hp of pump. Closed loop circulator pumps may need to be replaced every 7 to 10 years at a cost of roughly $400 to $500. Open loop pumps have a life expectancy of up to 25 years, but cost $2,000 to $5,000 to replace, depending on the size. Also, closed loop systems require virtually no maintenance, whereas open loop systems require periodic cleaning by the owner of accumulated mineral deposits and incoming sediment from the well. While this is an easy and quick process, it does require someone to be there to perform the maintenance.

So, as you can see, there are pros and cons to both open and closed loop vertical systems. Ultra Geothermal, Inc. works closely with our customers to help determine what makes the most sense for them.

B-Green Collaborative: How much of your residential business is in retrofitting existing systems to GHP versus new construction GHP installations?

Aho: Our retrofit vs. new construction mix has varied over time. In 2008, when fuel prices went through the roof, I would estimate we installed 60% retrofit systems and 40% new construction systems. In 2009, new construction installations represented about 65% of our total business. Going forward, the mix will depend a lot on fuel costs, particularly heating oil, and what is going on within the residential new construction industry.

B-Green Collaborative: Information we have seen regarding GHP systems suggest they generally cost around $2,500 per ton of capacity ($7,500 for a typical 3-ton system). Are we correct in assuming the above cost estimate is for ground to air systems where all necessary ductwork is already in place as a distribution subsystem?

Aho: The costs you cite are low and are likely outdated. A geothermal system for a new home costs about 20% to 30% more than a high quality, high efficiency fossil fuel system, not including the possible need for a dedicated well for an open loop system or a closed loop piping installation. For retrofits in existing homes, the cost of geothermal can vary significantly based on construction type, current heating and cooling distribution systems, insulation, and the potential for well or bore hole drilling as noted above.

There is no “typical” system size and cost, but we have found that, in very general terms, we size heat pump requirements on the basis of one ton per 500 to 600 square feet of living space depending very strongly on the type of insulation within the home. Using this general rule of thumb, you can see that a 1,500 square foot home would require a 3 ton heat pump capacity. However, Ultra Geothermal goes through an intensive analysis of heat gain and heat loss when designing and pricing each new system. In essence, on the basis of things like window size and type, ceiling type, and insulation R-values throughout a home, we are able to determine exactly the BTU’s needed to provide a comfortable environment for each prospective customer. A general idea of cost would be roughly around $18,000 to $22,000 for a typical 2000 – 2500 square foot home here in New England.

Payback on a geothermal system is difficult to predict in each case. For a homeowner currently using fuel oil for heat, the prospect of up to 40% – 70% annual savings in fuel bills could easily translate into a very reasonable payback period. If a homeowner is considering geothermal versus a high efficiency natural gas system today, it might be a breakeven proposition. In that case, the decision would need to take into consideration the other benefits of geothermal that I noted earlier. The bottom line is that while the initial investment of installing geothermal may look high, there is a payback in the form of reduced fuel bills, no fossil fuel consumption, potential eligibility for rebates and tax credits, less maintenance and repair than conventional systems, and potential increased value of your home.

B-Green Collaborative: Has Ultra Geothermal had any success in installing GHP systems utilizing existing hydronic baseboard distribution subsystems? If not, do you anticipate technological improvements in the near term that will make this possible? What about radiant floor heating systems?

Aho: It is not currently possible to use geothermal with an existing hydronic baseboard heating system. You cannot take 50° F groundwater and convert it with a heat pump to 150 – 180° F, which is what hydronic baseboard heating requires, nor do I see the technology making this possible in the future.

Ultra Geothermal does install radiant floor heating systems, though only in new construction applications. That is because you cannot get the radiant tubing to where it needs to be without essentially gutting an existing structure.

B-Green Collaborative: Is the current 30% federal tax credit for installation of qualifying GHP systems having a positive impact on your business? Are there state incentives as well that help increase interest in these systems?

Aho: Of course, the 30% federal tax credit makes considering a geothermal installation more attractive, but it hard to say just how much impact it has had or will have on Ultra Geothermal’s business. The fact that it is presently an uncapped tax credit could be a huge selling point to a consumer who may be making the choice between a high efficiency natural gas system versus a geothermal system. I think the more people become aware of this tax credit opportunity and learn about its specific applicability to geothermal installation decisions they may be contemplating, it will help drive acceptance of our technology.

Massachusetts currently has a geothermal tax credit, and I know New Hampshire is presently considering one. Also, Public Service of NH offers a $7,500 incentive for EnergyStar new home construction with geothermal installations. For more information on the rebates and incentives you can visit our website at http://www.ultrageothermal.com/

Original story published in
B-Green Collaborative Green Energy e-Magazine