Contractors Who Dig Geothermal

Posted on:

May 1, 2013

Do you find variable-speed compressors exciting? You might if you were a groundwater geologist with a passion for geothermal.

“The most exciting thing to come down the line this past year is the advent of variable-speed compressors,” claims Jeff Persons, president, Geo Source One, Inc., Plain City, Ohio. “They allow for modulation of system capacity from around 20 percent up to a full 100 percent and the integration with zone controls for up to six zones on the system with compressor and fan CFM matching the requirements of the zones that are requesting heat or cooling. It means one of the highest energy efficiency ratios for air conditioning possible.”

He explains that contractors traditionally have faced limited choices in the size of circulation pumps, sometimes being forced to install pumps larger than the given situation required. “By using a variable speed pump, you can match the pumping volume with the machine you are using,” he says. “Over the life span of that pump, you are saving many hundreds, perhaps thousands, of dollars in operation expenses. That’s a nice innovation.”

Alan Givens, CEO, Parrish Services, Manassas, Virginia, agrees. “A variable-speed compressor reduces the utility consumption and lets us provide a greater level of comfort,” he says. “It’s a pricier offering, but most consumers are opting to go that route. Customers who buy geothermal are not your typical customers. They’re already buying something that’s fairly expensive. Most are willing to spend a 10 to 15 percent uplift on the cost of the equipment to get the latest and greatest.”

Jay Murphy, president, K&M Shillingford, Tulsa, Oklahoma, also gives kudos to improved drilling techniques. He estimates his company, which relies on geothermal for between 60 and 70 percent of its business, drills between 5,000 and 10,000 feet a day. “We’ve learned a lot over the years about how to drill the holes correctly. We learned that it’s very important for us to look at the design and what the earth temperature is going to be in five, 10, or even 20 years. We have models now that let us project what the temperature in the well field will be over time. That’s pretty incredible.”

The models first emerged almost a decade ago, he adds, but in recent years have become increasingly reliable.

Why Customers Buy Geothermal

Until recently, geothermal has accounted for about 30 percent of the business at Four Seasons Heating and Cooling, Inc., Dalton, Massachusetts, says Thomas Laureyns, president. The economic downturn, coupled with harder-to-obtain and less-attractive state and local rebates, have hurt business in his area, he explains. He’s hoping that utilities will jump back into a more robust rebate game this year. “The history of geothermal has always been based on incentives,” he says. “I’ve found with any kind of green technology, you really need incentives to get people to go forward.”

According to Persons, the rise of the geothermal industry can be traced to the late 1970s and early 1980s when consumers thought they could qualify for tax credits by installing geothermal…until an unfriendly IRS ruling destroyed that illusion. He believes the recent energy tax credits, available through 2016 for renewable energy sources, have helped stimulate business during the recession. “As we come out of this slump, I hope to see sales improve even more,” he says. “Right now we’re quoting on a lot of new construction projects.”

Linda Couch, chief operating officer at Parrish, who fields questions from potential customers when they call in, divides customers into camps: “They are either techno geeks who want the best and newest thing or very financially astute people who understand that even though this has a high upfront cost, there are ways to finance it that make you cash positive. To people who understand the time value of money and the power of investing, this is a no-brainer.”

Givens adds that between 12 and 15 percent of revenues in the Parrish’s HVAC division can be attributed to geothermal. “What’s unique about us is about 60 percent of the geothermal work we’re doing is going in and cleaning up geothermal jobs that have been done wrong. We’re doing more of that than we are putting in retrofit systems for consumers, because a lot of contractors that jumped on the bandwagon don’t fully understand what they’re doing. We don’t do any new construction. We’re all retrofit.”

K&M Shillingford, which has installed thousands and thousands of residential geothermal jobs, but now does more commercial, explains that word of mouth can be a powerful motivator in large installations, such a schools. “Once a school has it, every school they do thereafter in that district will be geothermal,” Murphy says. “That’s at least what’s happened here. Once they get those numbers and the savings becomes real, they all want it.”

Lessons Learned

Persons, who is the author of the 200+-page book Understanding Geothermal Systems, has seen many major improvements in the manufacturing of geothermal equipment since the 1970s, when he fi rst got involved in the field. He’s also learned a lot of lessons along the way, one of which concerns loop solutions.

“It’s a common misperception that you just fill a loop with water, add antifreeze, and it’s trouble free,” he says. “In reality, there can be chemical reactions between the minerals and your fill water. The inhibitors in your antifreeze can render that antifreeze corrosive and create problems with the system long term.”

His advice: “It’s best to understand a little bit about water chemistry and what kind of makeup solution is best for the geothermal equipment,” he cautions. “We write to specs that call for the use of distilled or deionized water mixed with inhibited antifreeze to protect the metals in the system. When you do that, you can walk away and forget these systems for the life of the home. You’ve assured yourself you have a clean loop with good antifreeze and the proper corrosion inhibitors to protect the pumps and the metals in the equipment.”

Other lessons learned by contractors include:

LEAVE THE DRILLING TO THE PROFESSIONALS. “One of the lessons we learned—and it was a very expensive lesson—is that you’re better off finding a good driller who is knowledgeable and will stick around than buying your own equipment and using your own people,” Givens says. After investing in a directional drill and a truck to haul it around, he recently sold both.

Murphy echoes a similar experience with his purchase of drilling equipment. “To fail miserably would be an understatement,” he says. “We’re heating and air people. We’re not drillers, which is a science in itself. Now we subcontract the holes, and drillers can do what they do best.”

ENSURE CUSTOMER EXPECTATIONS ARE REALISTIC. “Many times they think geothermal will be almost free to operate,” Laureyns says. “You have to educate them.”

When you are bidding on a retrofit to an existing home, you also need to thoroughly explain to prospects that their lovely landscaping could be demolished, Couch says. “Setting customer expectations is one of the key points to being successful,” she says. “If they want us to plant azaleas when we’re done, we will. We just roll it into the cost of the job. If you do nothing, you will leave their yard a disaster. People who have paid a lot of money will not be happy to see that. Tell them upfront, ‘This is what your yard will look like,’ and pull out a picture.”

Adds Givens, “You could put in the best operating geothermal system at a fantastic price and have a very upset customer unless you set their expectations.”

UNDERSTAND THE FINANCIAL PICTURE. “If you can’t help your customers walk through the financial aspects of this, you won’t sell it,” Couch says. “You don’t necessarily have to offer financing, but you need to be able to talk that language with them.”

Givens adds another note of caution to contractors, “You don’t want to get into this field if the only way you know to compete is to be the low-cost provider,” he insists. “You’ll either have very upset customers or you’re going to lose your shirt.”