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Secretary Chu Announces Nearly $50 Million of Recovery Act Funding to Accelerate Deployment of Geothermal Heat Pumps

Announcement follows tour of manufacturing facility in Fort Wayne, Indiana

WASHINGTON – During a visit to Fort Wayne, Indiana, where he toured a manufacturer of geothermal heating pumps (GHPs), U.S. Energy Secretary Steven Chu today announced nearly $50 million from the American Reinvestment and Recovery Act to advance commercial deployment of the renewable heating and cooling systems, which use energy from below the Earth’s surface to move heat either into or away from the home or building. The expanded manufacturing and installation of GHPs could aid in the creation of new jobs while reducing the use of fossil fuels.

“The heat from the Earth represents a significant energy resource that can be tapped to reduce emissions contributing to climate change.” said Secretary Chu. “Expanded use of GHPs in the United States will create new jobs for engineers, manufacturers and technicians while at the same broadening our nation’s clean and renewable energy portfolio.”

Geothermal heat pumps, also called ground-source heat pumps, can be more efficient than the air-source heat pumps more commonly found in commercial and residential applications today. GHPs can substantially reduce building-related electricity demand while providing lower utility bills and lower maintenance costs to users.
DOE today is announcing opportunities for geothermal heat pump projects in three areas:

  1. Innovative Technology Demonstrations: Cost-shared technology demonstration projects that retrofit/incorporate a minimum of 50 tons of heating and cooling capacity and can be deployed in various geological conditions and climate zones in either residential communities or commercial buildings. Selected projects will incorporate innovative business and financing strategies, and focus on technological improves to speed marketplace deployment.
  2. Life Cycle Cost Tools: Projects that will assist in determining project feasibility by gathering and analyzing data related to system costs, performance, and installation techniques which will help decrease life-cycle cost applications for GHPs.
  3. National Certification and Accreditation: A national certification and accreditation program for the GHP industry designed to increase consumer confidence in the technology, reduce the potential for improperly installed systems, and assure product quality and performance.

Read more information on this and other DOE Funding Opportunities under the Recovery Act.

Geothermal Heating and Cooling Technology Is Poised to Support Economic Recovery and Long-Term Energy Goals

WASHINGTON, DC–(Marketwire – February 24, 2009) – The federal economic stimulus package is intended to create and save 3.6 million jobs and jumpstart the economy with economic recovery tax cuts and targeted investments. In addition to putting money back in the pockets of consumers and businesses, the package also includes provisions that will help achieve long-term goals, such as improving energy efficiency in both the public and private sectors.

Among those provisions, the plan calls for a disbursement of $6.9 billion to state and local governments for energy efficiency upgrades and the reduction of carbon emissions, which amounts to an average of $100 million to each state. By investing a portion of this $100 million in rebates or low interest loans to homeowners who replace their old fossil fuel or electric furnaces with geothermal heat pumps, the country would definitely make progress toward the goals of the stimulus package. States that have invested in similar programs were able to create hundreds of “green collar jobs” while significantly increasing energy efficiency and reducing carbon emissions.

Green Jobs

An additional state $2,000 rebate on the purchase of a geothermal heat pump — or the availability of low interest loans — could generate an additional 200 heat pump sales every month in a typical state, or 2,400 geothermal heat pump unit sales at the end of the first year. Further, every 18 heat pump installations can create one new job. By the end of the first year that means 133 new green collar jobs can be created (2,400 units divided by 18 installations per job). At $2,000 per unit, the total cost of a job creation/energy efficiency rebate program would be $4.8 million over the course of a year.

Every geothermal heat pump requires 24 hours of manufacturing labor and 32 hours of installation labor. Small businesses involved in the installation include heating and air-conditioning contractors, electricians, plumbers, excavators and drilling machine operators. These businesses have the capacity and technical skills to begin installing green geothermal technology in more homes immediately.

Reduced Carbon Footprint

In addition to creating jobs, a rebate program and the ensuing installation of geothermal heat pumps would cut an average four metric tons of carbon emissions per year per unit, due to the high energy efficiency of geothermal heat pump technology. This means that for the average unit life of 24.4 years, 97.6 metric tons of emissions could be eliminated over the lifetime of each unit, and 234,240 tons over the lifetime of every 2,400 units sold through a state rebate program.

A recent paper published by Oak Ridge National Laboratory estimated that aggressive deployment of geothermal heat pumps could achieve 35 to 40 percent of a recommended carbon reduction path for the U.S. building sector.

If every state takes at least five percent of the funding available through the energy efficiency portion of the stimulus package and invests it in a geothermal heat pump incentive, there couldn’t be a more cost effective, greener way to put people back to work, save fossil fuel, reduce carbon emissions and save homeowners thousands of dollars per year for the next 24 years. It’s the stimulus that keeps on stimulating.

Economic Recovery

The stimulus package funding is critical to a U.S. heating and air-conditioning industry that has been hit hard by the recession. The collapse of the residential new construction market and the lack of consumer financing have slammed the industry over the past two years, and heating system sales were down to levels not seen since 1970.

Geothermal heat pumps are built by manufacturers in the United States at domestic plants in nine states, and geothermal systems are operating and saving energy in all 50 states and are being exported around the globe.