3 month Natural Gas price trend. (Y-axis scale is cost/million BTUs)

This graph above, courtesy of CNN, shows the three month upward trend in the cost of natural gas in the United States.  One of the country’s largest natural gas facilities in the Southern United States saw prices spike from $1.85 per million British thermal units to $3.14/MBTU.  That is a 70% jump in cost in just three months!  What’s causing this extreme movement in the price of this fossil fuel?

Analysts are pointing to the elevated summertime temperatures prompting more and more people to turn on their air conditioning units to beat the heat.  Couple this heightened cooling demand with decreasing production in natural gas and it becomes apparent that natural gas is just as volatile of a commodity as oil.  As natural gas prices fell to meet the cost of electricity, exhibiting a 10 year all-time low, utilities switched to using natural gas to fire power plants and oil companies then directed their attention to extracting more profitable oil.  So the natural gas reserves dwindled and the commodity traders pushed the price higher and higher.  On Tuesday natural gas was trading at a seven month high.

Will the price of natural gas continue to rise or will the price come back down as summertime temperatures abate with the coming winter?  Either scenario could play out.  What this situation further demonstrates is that fossil fuels are merely market driven commodities.  Renewable energy, on the other hand, is far less susceptible to the energy markets.  After all, the sun is providing us constant, free energy.  Once you make a capital investment in photovoltaics, solar thermal, geothermal heat pumps or wind turbines you are buffering yourself from high market volatility of fossil fuels.  In fact, as fossil fuel prices increase your investment becomes more lucrative and your return on investment becomes shorter.

If you are on the fence about investing in renewable energy systems think about these few factors before opting out.  1. The Federal government is offering 30% tax credits through 2016.  It would seem logical that they continue the program after 2016, but we can’t be certain.  2. Fossil fuel markets are volatile and unpredictable.  The price of fossil fuels has been on a roller coaster ride in the last ten years.  It is likely prices will continue to creep upwards.  3. Returns on your renewable investment can be as high as 20% depending on the system type and design. The financial return on renewables is more reliable than the stock market or hedge funds.  Renewable energy systems are a risk-free, long-term investment, especially considering the recent spike in what everybody thought was a stable value of natural gas.

Geothermal specialist THB Energy Solutions is nearing completion of a 33 ton ground source heat pump installation in Big Sky country with solar hot water assistance.  Pictured above are evacuated solar tube collectors which provide free domestic hot water for the entire home and help out with the ground source heat pump system.

What’s great about this particular renewable energy system design is that we use the extra solar heat from the evacuated tubes to boost efficiency rates of the closed loop ground source heat pump loops.  Any time there is an excess of heat coming through the solar thermal collectors instead of releasing that extra energy to the air we can store it in the ground heat exchanger.  More sunshine equates to greater thermal storage for use in the upcoming winter.  So even if your hot water tank temperature demand is met and the sun is shining you will still be able recoup money on your solar thermal investment.  Pretty cool, right?!

When you boil it down the homeowners are getting the most bang for their solar buck.  The geothermal heat pumps are capturing solar energy stored in the ground and the solar thermal panels are capturing active solar energy.  And not only will the homeowners recover 30% of the total geothermal and solar thermal costs, they are also increasing the efficiency of their heat pump system by dovetailing the two systems for optimal performance.  When you add in tax credits from the state of Montana the whole investment becomes a no-brainer.

Sinking Geothermal Loops for High Efficiency HVAC

Whereas the leading dual stage units boast a Coefficient Of Performance (COP) of 4.7 in testing conditions, these variable speed heat pumps achieve a a COP of 5.3.  That means for every 1 unit of electrical energy used to run the heat pump they provide 5.3 units of energy!  Engineers have successfully adapted technology to increase efficiency levels by 13%.   This can mean huge long-term environmental and monetary savings for consumers.

I expect to see this new line of heat pumps pick up momentum in the next few years when the cost comes down a bit.  You are going to pay a premium for this new technology at first, but once engineers tinker around with designs a little longer we will see the price come down and become approachable for even the most modest residential applications.  In the meantime, we can expect commercial juggernauts to be the beta testers for these heat pumps and allow the heat pump industry to work out the economies of scale.

Single-stage or two-stage heat pumps might still be the best solution for your particular project when you investigate the return on investment.  Don’t write off any options for heat pumps when talking with your geothermal contractor.  But there is no doubt that these variable speed heat pumps will deliver the highest environmental savings.  If, and when, we implement cap and trade policy to account for the externalities of energy I anticipate these new units to become the global standard.

Don’t sit back as your heating and cooling bills continue to increase.  Pick up a phone and call around to local geothermal contractors.  Ask them if your home is a viable candidate for a geothermal heat pump system and get a quote.  You might find that by taking out a small loan you will generate large savings for your household.  As we approach the presidential election in a few months it might be prudent to take advantage of the existing federal tax credits for renewable energy systems before they come up for debate again and potentially expire at the end of 2016.

China, the ever-progressive country that it is, requires just such measures.  If you intend to put in for permits to build a new structure in certain areas of the country, you better include solar thermal panels in your plans.  Without this energy efficient technology in the plans you will not be issued a building permit.  Not only do the owners and tenants save on utility costs, but it creates industry jobs which spurs local spending and helps boost the overall economy.  Not bad, right?

Well, Montana does offer tax credits for homeowners and businesses that add solar thermal or photovoltaics or geothermal heat pumps to their buildings.  They aren’t insignificant amounts of money to save on taxes, but they are often overlooked in the design phase while decisions to save money on upfront building costs are discussed.  In reality, spending a few thousand dollars on a solar thermal system will yield huge savings over the life of the system.  It’s a no brainer.  Take out a little extra on your mortgage loan and let that investment pay for itself in 3 to 5 years.  You get the benefit of putting some extra money in your pocket with all the utility savings while reducing your carbon footprint.

Yes, we do have renewable energy tax credits in Montana and through the federal government to help offset these energy system investments whether you are building from the ground up or retrofitting an existing building.  Consider taking advantage of these monies when you are making building improvements or designing a new home or office.  Nobody is telling you that you HAVE to do it – but consider the long-term economic benefits of before you throw the idea out the window.  I think you will be happily surprised.

Currently we have four geothermal heat pump projects in various stages of construction.  Our largest is a 24 ton system which will deliver heating and cooling simultaneously in a new home in the Yellowstone Club.  Our latest project is in a home near Moonlight Basin which will get an 8 ton water-to-water vertical geothermal installation.  We have a 6 ton water-to-water heat pump going in just over the hill in a gorgeous house in the Club at Spanish Peaks.  Additionally, we are installing a 4 ton water-to-air horizontal system just north of Bozeman.

We also provide design analysis work for new construction projects to help homeowners determine what the most cost-effective heat pump design is for their particular home and needs.  Since we’ve been installing and designing heat pumps full time for over two years we know just about all there is to know when it comes to heat pump systems.  Whether you have any questions about how geothermal heat pumps work, if they are an option for your home, or if you would like a free quote then please send us an email or give us a call.  We’re here to help save you money and help reduce your impact on the environment.

THB Energy Solutions is installing the first wells of a 24 ton geothermal heating and cooling system in Big Sky, Montana.  This system will provide high efficiency radiant heating and forced air conditioning to combat the harsh Montana climate.  Located on the Southern exposure of Lone Peak, we anticipate enormous environmental and monetary savings from this new construction installation.

Check back on the blog for more updates on this project and many more.  We have four systems in various stages of construction right now!

Renewable Portfolio Standards require utilities to produce a specified amount of electricity from renewable energy sources.  Each state has the ability to set its own RPS goals.  The state of Maryland, in particular, requires 20% of all retail electricity to come from renewable energy by 2022.  Because geothermal heat pumps use renewable energy stored within the earth to offset the amount of energy needed for heating and cooling, they actively reduce the energy demand placed on the grid.

Including geothermal heat pumps in this new bill serves many functions.  It enables Maryland to more fully account for its renewable energy resources in an attempt to achieve its RPS goals.  Additionally, it will stimulate the economy by increasing heat pump installations and reducing the upfront cost of these systems.  We will likely see a reduction in statewide carbon dioxide emissions and electrical prices should come down due to reduced peak demand on the electrical utilities.

This is an incredible win-win for consumers, the environment and the geothermal heat pump industry.  Consider taking a moment to encourage your state representative to put this same bill into law.

Solar Energy International, innovative energy educators based in Colorado, tapped THB Energy Solutions to contribute content to their iBook on renewable energy.  We jumped at the opportunity to offer our knowledge and passion for geothermal heat pumps to the greater community.  We will provide a chapter on the basics of geothermal heat pumps for those looking to start their research on this great renewable energy technology.

We will keep you updated as to when the book becomes available to the public.  In the meantime, jump over to the SEI website and explore what great educational courses they have to offer on solar photovoltaics, solar thermal and wind power.  The whole team at SEI is wholly dedicated to the ideals of sustainability.   Lectures and workshops are offered across the United States and abroad for those people interested in learning more or getting NABCEP certified.

This renewable energy project continues the legacy of energy pioneering that was started by the Ball brothers when they operated a glass manufacturing company in the early 1900s.  Ball State received $50 million in state appropriations and federal stimulus funding to complete phase one of the project.  Now they are looking towards phase two and completion of the geothermal system.  This project has a been a boon on the local and state level – creating approximately 900 jobs while saving money and the environment.  Like many campus environmental initiatives, this is being done because of its environmental and societal benefits, not merely because it will save money.

Ball State will drill between 3,700 and 4,000 vertical wells across the campus for the geothermal system to function properly.  They will circulate geothermal energy through three pump centers which will distribute both warm and chilled water throughout the campus buildings.  Since buildings are occupied at differing times this geothermal system simply move energy between the buildings to keep efficiency levels very high.  Whereas in a normal campus building you would open the window if a room became too hot, this geothermal heat pump system will extract heat from that warm room and either put in a room which is too cold or put the heat back in the ground for later use.

Geothermal systems are feasible for any size home or building, not just for the large commercial project.  Heat pumps are becoming recognized across the United States as the premier choice for climate control.  Since heating and cooling accounts for roughly 50% of all home energy expenditures, it makes sense to use this proven technology to reduce that portion of the building energy consumption by 70 percent.  Not only are homeowners saving more and more money on utilities as the cost of fossil fuels increase, they are decreasing their carbon footprint and using the generous 30% federal tax credit to help offset the cost of their geothermal systems.

Ball State is proving to the United States that geothermal heat pump systems are a viable alternative to traditional heating and cooling systems on a very large scale.  By saving money, decreasing environmental impact and creating jobs I would say that this project is an complete success.

Geothermal Energy Expo 2012

Geothermal heat pumps garnered a fever pitch among renewable technologies at the 2012 Energy Now expo in Worcestershire, UK.  Hailed as the “up-and-coming” renewable technology, geothermal heat pumps grabbed the focus of attention from solar, wind and anaerobic digestion.  Not bad for an underdog.

The UK, as with most cultures, developed their infrastructure around cheap fossil fuels.  And now that fuel prices are soaring the UK is seriously reviewing its energy usage patterns.  Geothermal heat pumps are capturing everyone’s attention for their ability to use the earth for heating and cooling homes and offices.  This technology is such a big win since it allows use of renewable energy all day and all night.  Small solar power projects, in contrast, can only effectively harness renewable energy during the daytime.  Geothermal heat pumps heat and cool with efficiency rates up to 500% thereby significantly reducing demand for fossil fuels while significantly lowering costs and carbon emissions.

Read more coverage here.