Chair of IGSHPA’s Board of Directors, Jack DiEnna, just wrote an article on how the GSHP industry should be viewing the opportunities presented by recent U.S. executive orders. The article has been added to this blog to provide a perspective for members.
President Trump on the day of his inauguration signed two Executive Orders. The first “Declaring a National Energy Emergency” which stated, “the United States has the potential to use it’s unrealized energy resources domestically, which would create jobs and economic prosperity for Americans forgotten in the present economy.”
The second Executive Order “Unleashing American Energy” states that “It is in the National Interest to unleash America’s affordable and reliable energy and natural resources. This will restore American prosperity and ensure that an abundant supply of reliable energy is readily accessible in every state and territory of the Nation.” The ground source or geothermal heat pump industry is a forty-year-old NEW renewable technology that uses the natural resource of the earth’s thermal energy, in conjunction with a small amount of electricity, to provide heating, cooling and water heating to facilities throughout the US.
The US Department of Energy (DOE) states that building energy use accounts for 36% of all primary energy used in the US and that 40% of the total energy used in those buildings is for space conditioning (heating & cooling) and water heating.
The main purpose of this document is to show the value of utility or third-party ownership of the ground heat exchanger (GHX) to legislators, regulators and interested third-party owners to raise the awareness of the benefits. The utility or third-party owner would experience a greater value in owning this “renewable thermal asset” one that could also become a non-wire, non-pipeline alternative (NWA-NPA) for utilities to provide to their customer base.
The primary reason for lower-than-expected GSHP market growth is the expectation that building owners will finance the “GSHP infrastructure” or the outside-the-building portion of the GSHP system, the ground heat exchanger (GHX)
The ground heat exchanger (GHX) is a sustainable asset and will outlive the building and many generations of heat pumps. It is the same as utility infrastructure (poles, wires and underground gas piping) but has the added bonus of adding to a utility’s renewable portfolio.
This begs the question, why do we expect building owners to finance the GSHP infrastructure but no other utility infrastructure. The outside portion of the GHP system can be half or more of the overall GSHP system cost, if this cost were excluded, GSHP systems would have about the same price or lower than conventional alternatives.
There are numerous studies from the National Labs that point to the value of the GSHP system.
In 2006 the National Renewable Energy Laboratory (NREL) produced the technical report titled “Geothermal, the Energy Under Our Feet” (https://info.ornl.gov/sites/publications/files/Pub24734.pdf).
The study states that GSHPs have an estimated developable resource of 15 quads* of energy and 1.8 quads of avoided power.
In 2008, Oak Ridge National Labs (ORNL) stated that an aggressive deployment of GSHPs could account for a savings of 3.4 to 3.9 quads* annually.
In 2010, ORNL in an assessment of the National Benefits from retrofitting existing single-family homes with GSHP technology (https://info.ornl.gov.//ssites/publications/files/Pub24734.pdf).
It would yield savings of 4.2 quads* in primary energy, a 45.1% reduction in primary energy consumption in existing single-family homes. It would also account for a reduction of 271.9 million metric tons of CO2 emissions and a 45.3% reduction in CO2 emissions related to space heating & cooling and water heating in single family homes.
It would account for a savings of $52.2 billion in energy expenditures, a 48.2% reduction in energy costs and a reduction of 215.9 GW in summer peak electrical demand, a 56.1% reduction in summer peak demand.
It also pointed out that conventional space conditioning and water heating equipment usually have a 10 to 15-year service life which means that homes built in 2000 are now most likely to need service or retrofit.
In another report by ORNL in 2016 on the use of GSHPs in commercial buildings states that if nationally deployed GSHPs would significantly decrease energy consumption, energy costs and emissions related to space conditioning and water heating for small commercial buildings and individual commercial building spaces.
Applied nationally to all appropriate commercial building spaces, GSHPs could save .84 quads of source energy.*
In another report conducted by ORNL as part of the DOE Vision Study in 2023 the results indicated that GSHPs have the potential to save 6.7 quads of primary energy, avoid 433.3 million tons of CO2 emissions and reduce energy costs by $80.4 Billion annually. This is in addition to reducing peak demand on the grid and creating millions of jobs.
Finally, in the latest DOE report, “Pathways to Commercial Liftoff, Geothermal Heating and Cooling” January 2025 (https://liftoff.energy.gov/geothermal -heating-and-cooling/), stated that a national-scale mass deployment of GSHPs could result in reducing wholesale payments for electric grid services by at least $300 billion through 2050. This study considered deployment to 43% of commercial and institutional and 78% of residential floor space.
This report also stated that because less grid infrastructure investment is required with the large-scale deployment of GSHPs, it would reduce the cost of power for all grid consumers, even those who do not have the technology installed.
Every one of the reports mentioned recognizes the value that GSHPs deliver and should be the catalyst that would allow utilities, Electric, Gas or Water, to own the ground loop as a renewable asset. This would take the ground heat exchanger out of the project and remove the high first cost, one of the major barriers of this technology and add to the utility’s renewable portfolio.
An increase in installations of ground source/ geothermal heat pump technology provides more work for the trades, (HVAC, drillers etc.).
The designation of a ground heat exchanger (GHX) as a qualified Distributed Energy Resource (DER) would assist in deferring or avoiding utility investments in distribution equipment and infrastructure by providing “contracted” GHX installation services to the end user (heating & cooling) through utility owned assets.
There is also an opportunity to recognize the renewable storage value of the earth, which is not dangerous and does not take up any room in the facility and it can become part of the utility’s “storage” portfolio.
The major benefit of the ground heat exchanger, as noted in the recent DOE Report “Pathways to Commercial Liftoff”, becoming a non-wire – non-pipeline alternative (NWA – NPA) asset is that it provides for the deferral of larger capital projects that can save the utility investors or owners and their customers $$$ while supporting a stronger grid, reducing emissions, lowering peak demand and creating jobs.
(a large geothermal project touches 22 job classifications, 90% of which are in trades, 10% are design professionals, sales etc.).
This would have a major impact on a gas utility that is getting constrained in extending their gas lines. This technology offers an option that has zero onsite emission and allows them to deliver cooling as well as heating to the facility.
Allowing a utility to own the ground heat exchanger, (the underground infrastructure) can and will enable this technology to become a major weapon in the strive for Energy Independence. It would also support a stronger electric grid, reduce the cost of energy in buildings and create jobs.
In a recent report from the Government Accountability Office (GAO) it was determined that half of the K-12 school districts in the US had aging HVAC systems that needed to be replaced.
A Pre-K to 12 School utility application can also become a Networked Geothermal “Anchor Tenant” system which uses the open area (athletic fields, parking lots, etc.) for the ground heat exchanger which would provide heating, cooling and water heating to, not only the school facilities but to the surrounding community as well.
The ground source/geothermal industry is fully prepared to support utility involvement with trained individuals and continue to develop a stronger infrastructure needed to sustain the initiative through workforce development using the training curriculum already established by the International Ground Source Heat Pump Association (IGSHPA).
*One quad is equal to 293 billion KWH, 183 million barrels of petroleum, 38.5 million tons of coal or 980 billion cubic feet of natural gas (World energy consumption in 2010 was estimated at 524 quads of energy).
Please call me if you have any questions or need further information- 610-659-4998.
John (Jack) DiEnna, Executive Director
Geothermal National & International Initiative
(and IGSHPA Board Chair)
