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Habitat for Humanity's geothermal home is paying off

Laurel Andrews
Habitat for Humanity's construction site in North Pole, summer 2012. The geothermal unit slashed utility costs by 50 percent in its new three-bedroom, two-bathroom home. Courtesy Habitat for Humanity

Geothermal heat is keeping Habitat for Humanity’s new home in North Pole toasty at half the cost of a regular water boiler, delivering savings directly to the family who moved into the house in January. 

Now, the non-profit has another geothermal project on the table. With high heating fuel prices in the Interior, and a federal tax rebate in place until 2016, is geothermal a viable heating source for Interior Alaska on a large scale?

A house delivering savings

Habitat for Humanity is a nonprofit organization that constructs homes for families in need. The family then buys the house from the organization, paying it back on a 20-year loan with no interest.

Part of the organization’s building standards are that the costs to live there cannot exceed 30 percent of a family’s gross income. “The heating part of it is huge,” executive director Jay Pruce said. “That’s what puts (families) in sub-standard housing.”

Geothermal heat pumps, also known as ground-source heat pumps, work by extracting heat from the ground through a closed-loop system of pipes called a heat-exchange system. The systems can be installed either horizontally or vertically in the ground, and rely on electricity to run. For a house to be outfitted with geothermal, it needs to have either forced air or radiant heat systems.

Ground-source heat pumps used to heat homes are different from geothermal power derived from underground hot springs such as that used at the Chena Hot Springs resort east of Fairbanks. However, the term "geothermal" can be applied to both systems.

Habitat for Humanity's geothermal unit slashed utility costs by 50 percent in its new three-bedroom, two-bathroom home.

Habitat for Humanity was able to see savings unfold immediately. The organization completed two homes of similar size and insulation side-by-side in North Pole in 2012. The first uses oil heat, the second, geothermal. Both houses were vacant during a two month period, and set to the same thermostat temperature.

The first house ran through 256 gallons of heating oil in two months, costing $985 with the price of fuel at roughly $3.80.

The house running on geothermal cost $467 during the same period. With the geothermal home, “include the fact that all electric charges are [accounted for] … the savings are more like 60 percent overall,” Pruce wrote.

“Very cool,” he concluded.

Constructing the house with a geothermal unit was championed by Darrell Russell, president of the volunteer board of directors for Habitat for Humanity and the owner of Denali Builders.

Russell has used geothermal heat pumps in place of water boilers in the West Pointe subdivision in Fairbanks with good results.

“There’s no fuel oil, no carbon footprint, nothing,” he said. The inside unit is about the size of a dishwasher, and makes less noise than a water boiler.

And, you can “pretty much do it everywhere,” Russell said, although the valley floor is a better location to construct geothermal than surrounding hills, which are rocky and need more work done to install the units.

Geothermal heat does require an investment, however. For Habitat for Humanity, the system cost $20,100 to install. The family will get a 30 percent tax rebate on the geothermal unit, thanks to a federal incentive in place until 2016. That rebate of around $6,000 scales back the investment cost to $14,000. But given the price of heating fuel, the investment pays off “almost immediately,” Pruce said. He expects the investment to completely pay for itself in 18 months, far quicker than Habitat’s initial estimate, which calculated a payoff in 3½ years.

One of the “latest and greatest” water boiler designs would have cost about $12,000, Pruce said.

Greater uses for Alaska?

Geothermal heat pumps are sparsely used in Alaska, unlike the Lower-48, where the systems are utilized for both heating and cooling. About 35 percent of homes running on geothermal systems are located in the southern U.S. Other Arctic regions, however, use geothermal heat pumps on a much larger scale. In Sweden, more than 30 percent of homes are heated with geothermal, according to a Cold Climate Housing Research Center (CCHRC) report.

About 50 residences across Alaska were using ground-source water pumps as of 2011, CCHRC reports. Weller Elementary School in the Fairbanks North Star Borough is one of the more high-profile buildings equipped with geothermal heat pumps.

Whether geothermal is an economic option depends on both the price of heating fuel and electricity. Geothermal may not be viable in rural Alaska, for instance, where electric prices are also soaring.

Anchorage may not benefit from installing geothermal systems, either. “A heat pump isn’t as financially attractive in Anchorage as it is in Fairbanks or Juneau” thanks to cheaper supplies of natural gas in Alaska’s largest city, said building science research director Collin Craven of the Cold Climate Center in a 2011 video.

In 2011, CCHRC found that ground-source heat pumps are “marginally economical” in Fairbanks, given the cost of heating oil to electricity. Yet as heating oil costs continue to squeeze home owner’s wallets in the Interior, it may become a more attractive option. Heating oil delivery costs on Wednesday were quoted between $3.52 to $3.96 from Polar Fuels and Sourdough Fuel in Fairbanks.

For the most part, the 2011 studies still stand, Craven said Wednesday. However, the Cold Climate Center had to make “assumptions that were a bit conservative," in the studies. He expressed interest in Habitat for Humanity’s side-by-side housing comparison, and said that field studies such as Habitat's would yield good information for future consideration.

For now, geothermal is “not the best choice for every scenario, but I’m glad to see people evaluating it as an option,” Craven said. “We definitely need more options on our plate.”

Habitat for Humanity plans to install geothermal in its new lodge in Fairbanks being constructed this year -- a new lodge that will house the offices, meeting rooms and a restore operation that will resell donated building materials for “pennies on the dollar,” Pruce said.

Moving forward, Russell also plans to install geothermal units in “everything that I’m planning,” in Fairbanks.

“I’m very much sold on geothermal,” he said.

Habitat for Humanity will evaluate whether to use geothermal in future homes on case by case basis, Pruce said. “Economics change. But we definitely want to be in a position to use the technology to keep the cost down.”

Contact Laurel Andrews at laurel(at)alaskadispatch.com

Correction: This article originally reported that 35 percent of homes in the southern U.S. ran on geothermal systems. This has been corrected to read than 35 percent of all geothermal units in the U.S. exist in the southern U.S.