About geothermal · The financial case
The furnace you were about to buy never pays you back
Say your 13 SEER AC and 80 AFUE furnace are dying. The honest comparison is not geothermal vs doing nothing; it is geothermal vs the $13,000 conventional setup you would buy instead. Run both to year 25 and the answer stops being close.
The starting line
$5,500 is the real difference
A decent 16 SEER air conditioner with a 92 AFUE furnace runs about $13,000 installed. Call the geothermal system $25,000. Looks like double, until the 30% federal tax credit takes $7,500 off as a credit, not a deduction.
That leaves $5,500 between the two choices. Then the savings gap goes to work: the geothermal system saves $1,416 a year against the old equipment, the new conventional pair saves $162. The initial difference is repaid in 3 years and 10 months.
Figures from WaterFurnace's GeoLink Design Studio model: 2,500 sq ft home, $0.12/kWh, $1.50/ccf gas, 2.18% inflation. Sources: Jana Laboratories (2009), ASHRAE, US DOE. Maryland grants and REC income are not even counted here.
- $5,500
- true upfront difference after the federal credit
- $1,416/yr
- savings vs the aging system it replaces
- 3 yr 10 mo
- to recoup the difference
- 100+ yrs
- life of the buried loop, per Jana Labs
Year 25
One system's life, side by side
| Conventional | Geothermal | |
|---|---|---|
| New equipment | 16 SEER AC + 92 AFUE furnace | 41 EER / 5.3 COP |
| Annual savings vs the old system | $162 | $1,416 |
| Useful life | 15-18 years | 25 years |
| Break-even point | Never | 11 years, 1 month |
| Position at year 25 | $26,047 loss | $28,912 profit |
| Cumulative energy savings | $5,310 | $46,412 |
The 16 SEER pair never reaches break-even inside its own lifespan; when it dies around year 16 you are still five figures in the hole and shopping again. The WaterFurnace unit pays itself off just past year 11 and then prints $1,416 a year until replacement.
Year 50
The loop outlives everything, so round two is cheap
The buried loop lasts 100+ years, so the second geothermal system reuses it and costs a fraction of the first. The conventional path buys its third and fourth sets of equipment in the same window.
| Conventional | Geothermal | |
|---|---|---|
| Systems bought in 50 years | 4 | 2 |
| Position at year 50 | $79,466 loss | $87,056 profit |
| Cumulative energy savings | $14,414 | $125,988 |
Want this math for your address?
Your proposal includes the same 25-year model with your rates, your incentives, and the actual system price.
Contact
Talk to a person, not a phone tree
Question about your system, a strange noise, or just want a second opinion on a proposal you got elsewhere? Write or call, a geothermal designer answers both.
