DW and I have been thinking about geothermal heat (and cooling). Really, we entertained the idea four years ago when we renovated the house, but we couldn't justify the expense at that time.

If you're not familiar with geothermal heat, it's a heating system that collects energy from the ground, and transfers it to your house through an electric heat pump. No fossil fuels are used - except, of course, the fossil fuels that produce the electricity that runs the pump.

Geothermal also cools your house, with no additional equipment. You just reverse the heat pump when you want to cool the house.

Finally, geothermal can preheat water for your water heater. You do need to buy a second water tank, but the water enters the first tank at 110 degrees.

Geothermal is an efficient way to heat (and cool) a house (and water), but very expensive to install.

My first step was to do some investigating on the internet. I liked what I saw. I even found an on-line geothermal forum (I think there's a forum for everything). I got some basic questions answered there.

My electric co-op offers an energy audit for your house. The rep from the co-op was out on Tuesday. According to the energy audit, we would have a 70% savings in heating home costs, a 44% savings in cooling costs, and 41% savings in water heating costs.

A neat option offered by the electric co-op is that the electricity used to power the geothermal system is charged at a reduced rate - $0.065/kWh, our normal rate is $0.12/kWh. But, we would need to buy and install a second meter.

Then I called some contractors for bids. Two were out yesterday, and one will be out this afternoon. Of course, we haven't gotten a solid estimate yet, but one of the contractors did let us know that we would be looking at about $15K to purchase and install the system.

The lines that collect the heat from the ground can be installed either vertically or horizontally. Vertical installation is about 5K more expensive, because of the cost of the drill rig used to install. A home with limited space (close neighbors) would need a vertical installation. We have about three acres of available space around our house, so we can go horizontal. The lines need to be 120' long, spaced 7' apart, and about 7 feet deep. I think the first contractor (the one we're leaning toward right now) said we'd need five lines.

My next step was to set up an excel spread sheet with all of the above information. I used 15K as the initial price, and will modify that as bids come in. Right now, according to my spreadsheet, the geothermal system will pay for itself in year 10, and after 25 years (the expected life), we'd be ahead by about 26K. I ran a separate calculation for the water heater, because that's a separate decision. The water heater could pay for itself in eight years.

Oh, and this system would be eligible for a 30% energy efficiency tax credit.

I'm interested to see what the actual cost estimates will be. We're not going to jump into this right away. If we decide to go with geo, we'll spend the winter saving money for it, and have the install done next spring or summer.

Our existing oil furnace is eight years old. Expected life is 15 years. I dunno. Maybe we should use that for a few more years. The numbers we're looking at are $2,420 spent last year to heat the house with oil, and an estimated $732 per year to heat the house with geothermic.