1Ponca CityDevelopment Authority

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What is Geothermal Energy?

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A Renewable Resource

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An Unlimited Energy Source from the Earth:

150 ft.or more

100 ft.40 ft.

Small Yard Space = Large Heat Source

Lots of

Energy Available

40 BTUs Per Cubic Foot

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Source of Geothermal Energy:

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…one method for capturing geothermal

energy is through the use of

Geothermal Heat Pumps…

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Geothermal Heat Pumps…

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…transfer this stored energy & use

temperature differences above & below the

earth’s surface to heat & cool buildings…

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Geothermal Heat Pumpsare one of the Most Effective

& Deployable Methods of Energy Transfer

According to the EPA (1993), geothermal heat pumps produce the lowest CO2

emissions, including all source effects, of all available space-conditioning technologies.

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Heat Pumps Are All Around Us…

Air conditioners & air-source heat pumps transfer heat from inside houses to the air outside

Refrigerators transfer heat from food into the kitchen

HEATHEAT

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Basic Geothermal Operation:

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A geothermal heat pump circulates water through a sealed underground piping loop where it is naturally warmed (or cooled) by the earth

…using Heat Pump Technology

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The Earth is the Source of Heat in Winter…

Outdoor air design temperature:-5°F72°F

60°F

A geothermal heat pump transfers underground heat into the building to provide heating

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…and an Efficient Place to Reject or Store Heat in

Summer…

Outdoor air design temperature:95°F75°F

60°F

A geothermal heat pump transfers heat from the building into the ground to provide cooling

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Geothermal Energy & Heat Pumps:

• HistoryRapid growth in 80’s & early 90’s

• Energy costs declined

• Utility de-regulation

• Current Return to rapid growth

• Energy cost/availability issues

• Environmental concerns

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Geothermal Heat Pump Historical ARI GSHP Shipments 1983 - 2007

50,000

25,000

01983 20073

22004

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Market Growth Drivers:

• High Cost of Energy– Fuel switching (propane to electric)

– 50% increase in electric costs

– Increased demand

• Environmental Concerns– Global warming/climate change

– Air quality

– Limits on new generation

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Consumer Concerns:

- Rising fossil fuel costs

- Environmental concerns

- Limited energy supplies

- National security

(Both Fossil Fuel & Electric)

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Geothermal Heat PumpsMajor Market Barriers:

• Lack of Awareness – both consumers & institutions

• Perceived initial cost premium• Loop installation & infrastructure development• Retrofitting current systems• Perceived reliability issues

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Major GHP Improvements:

• No defrost cycle with GHP making system more dependable & energy efficient

• 410a refrigerant provides warmer air temps during heating mode in the home

• 410a refrigerant transfers heat better than R22 keeping compressor cooler & lengthening equipment life

• Quieter than conventional systems

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Energy Issues:

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Geothermal Heat Pump Industry Opportunity: Significantly Lower U.S.

Energy Demand

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“Built Environment”HVAC:

= 70% of all electric energy consumed

Idaho Energy National Lab

Residential + Commercial + Institutional

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Residential Energy Usage:

• Heating & air conditioning

• Lighting

• Domestic hot water

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HVAC Energy Use ComparisonsReduces energy consumption by 50%:

Conventional HVAC - Home Geothermal HVAC - Home

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Geothermal Heat Pump Efficiency:

1 unit of energy from the grid

Plus:3-5 units of “free” energyfrom the earth

Yields:4-6 units of energy for the building

400 - 600% Efficient

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Geothermal System Components:

• Heat Pump• Ground Loop

– Deep (150’-250’) Vertical Loop or – Shallow (6’-8’ deep) Horizontal Loop

• Hot Water Heater

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Incentives

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http://www.dsireusa.org/Index.cfm?RE=1&EE=1

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Geothermal Heat PumpResidential Tax Incentives:

Federal Income Tax Credit: 30% of total GHP system cost Credit capped at $2000 for 2008 Credit unlimited for 2009 thru 2016 Can be used to offset AMT tax Can be combined with solar & wind tax credits Can be used in more than 1 year – carry forward

Eligibility: Home must be located in U.S. Includes houses, cooperatives, condos, mobile homes Does not have to be main home GHP must meet Energy Star requirements Placed in service between 1/1/2008 & 12/31/2016

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Geothermal Heat PumpBusiness Tax Incentives:Federal Income Tax Credit:

10% of total GHP system cost Credit not limited Can be used to offset AMT tax Can be used in combination with subsidized financing Can be used in more than 1 year

Accelerated Depreciation: 5-yr MACR depreciation for entire GHP system Eligible for bonus depreciation in 2009 (50% writeoff 1st yr)

Eligibility: Building located in U.S. Original use begins with taxpayer Does not have to be your main home GHP must meet Energy Star requirements Installed between 10/3/2008 & 12/31/2016 Can be used by utilities

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Geothermal Heat PumpOther Stimulus Incentives:

Small Business: $250,000 in Section 179 expensing for 2009 5-yr NOL carry back for business under $15 million in sales

Schools: $22 billion in tax-exempt construction bonds $39.5 billion in additional funding to local school districts

Energy: 30% tax credit ($1500/yr cap) - home efficiency upgrades in 09-10 $2,000 energy efficient home tax credit for builders $1.80/ft2 energy efficient commercial building tax credit $6.3 billion - energy efficiency & conservation grants $5.0 billion - weatherization assistance $4.5 billion - upgrade Federal building energy efficiency $6.5 billion - military bases to modernize & improve efficiency $4.0 billion - improve public housing & upgrade efficiency

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Value of Residential Incentives in Ponca City:

Element $/ton capacity

Ground Source Heat Pump Installation ~$6,000

30% Federal Tax Credit ($1,800)

PUCA/OMPA W.I.S.E. Rebate ($800)

PCUA/OMPA OK Comfort Program ($1000)

Climate Master Discount (5-10%) estimate ($300)

Total Reductions $

%

($3900)

65%

Your Cost $

%

$2100

35%

Typical Energy Bill Reduction 50%

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Who Benefits?Win-Win for All Involved:

• YouThrough reduced monthly electricity cost, ~50%3 – 5 year payback

• PCUA/OMPAIncreased winter demand & improved load factorDecreased expensive summer peak demand

• Better utilization of existing generation assets• Environment

Reduced overall electricity demandReduced CO2/GHG emissions

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Items Requiring Consideration:

• Locating wells or loops• Location of existing utilities• Property boundaries• Utility setbacks or covenants• Service upgrade• Backup power• Water heating

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Geothermal Heat Pump Take Aways:

• Most efficient way to heat & cool • Classified as “renewable energy resource”• Reduce electricity consumption & cost ~50%• Win-Win for all involved• Outstanding incentives available now• Reduced CO2/GHG emissions• Environmentally & economically friendly• Comfortable

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What You Can Do Now?

• Obtain a design with “Manual J” load calculation & cost estimate:– Stolhand– Ward’s– Hutchinson

• Submit rebate application to PC Energy• Investigate loan options:

– Local banks & CUs– ClimateMaster

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