Credit: U.S. Department of energy, Washington DC
As is custom, a series of incentives and earmarks were included in the bill, among them new incentives for geoexchange systems. The subsidies include a tax credit of up to $2,000 for a residential system, up to $6,667 for joint-occupancy properties and up to 10 percent of commercial-geoexchange-system value. These credits only are available for projects in which the heat pump adheres to Energy Star criteria and is “placed in service” between Jan. 1, 2008, and Dec. 31, 2016.
Geoexchange market stakeholders have reacted favorably to these new incentives. They particularly are encouraged that the U.S. Congress now has formally designated geothermal heat pumps as renewable-energy technology. In the ongoing discussion about sustainability and market transformation, however, it’s important to consider industry history and the context of these subsidies to understand why these incentives may be counter-productive. Architects and engineers, in particular, will wish to understand the technology better before specifying it.
U.S. MARKET CONTEXT
Credit: James Steinkamo, Steinkamp Photography/Legat Architects, Chicago
Based on preliminary figures from the Montrealbased Canadian GeoExchange Coalition’s industry survey, from 2006-08 heat-pump sales grew by up to 260 percent annually in Canada and between 30 and 40 percent in the U.S. with assumed negligible growth in Mexico. (Complete survey results will be available on CGC’s Web site, www.geo-exchange.ca, in spring.) Much of the difference in growth can be attributed to the approach taken by policymakers and the Canadian geoexchange industry’s implementation of a national quality program. During 2005-07, CGC built a voluntary, industry- driven quality program called the Global Quality GeoExchange Program. The program, which is built on North America's only government- recognized design and installation standard for geoexchange systems, CSA C-448-02, is required by the Canadian federal government and several provincial governments for contractors and designers to earn subsidies for their customers. The CGC quality program comes from a dedicated national industry effort to develop quality assurance and training relevant to Canadian geology and climate based on the standard.
This training is revised annually. In contrast, no body exists at this writing to raise the bar for the geoexchange industry in the U.S. Therefore, many U.S. project owners cannot easily access lists of fully and reliably qualified and pre-screened professionals or companies; be confident of their subcontractor’s reliability, professionalism or credibility; and may not NSF Certifi es First Geothermal Pipes to Canadian Standard Ann Arbor, Mich.-based NSF International, a public health and safety organization, has certified the first geothermal pipes to Mississauga, Ontario-based Canadian Standards Association’s C-448, “Design and Installation of Earth Energy Systems for Commercial and Institutional Buildings.” Barrie, Ontario-based Trinus Pipes & Tubes Ltd. and Burnaby, British Columbia-based Vanguard Pipe & Fittings Ltd. had to fulfill the requirements of NSF/ANSI Standard 14: “Plastic Piping System Components and Related Materials,” and CSA B-137.1, “Polyethylene Pipe, Tubing and Fittings for Cold Water Pressure Services,” in addition to the requirements of CSA C-448. The companies’ pipes will bear the CSA C-448, CSA B-137.1 and NSF-geothermal marks. To maintain NSF certification and demonstrate ongoing compliance, Trinus Pipes & Tubes and Vanguard Pipe & Fittings will be required to pass three unannounced audits annually. The companies now are listed on the NSF Web site, www.nsf.org. CSA C-448 is North America’s only government-recognized design and installation standard for geoexchange systems. NSF’s certification program was developed to incorporate the critical aspects of geothermal piping, including performance, physical, health effects and quality-control requirements. Third-party certification for geothermal piping systems provides regulators and users assurance that products are independently certified to meet requirements for geoexchange end use.
routinely receive complete system documentation. U.S. engineers, architects and owners who are victimized in an uncontrolled contracting situation have little recourse except for lawsuit. Even then, establishing a standard of care will prove difficult because of the lack of a default, nationally recognized standard. This uncoordinated approach in the U.S. renders geoexchange technology more risky to owners, architects and engineers who have no assurance of quality, competence, ethics, reliability, etc., from their geoexchange contractor(s). In fact, a lack of quality assurance, deregulated utility environment and low energy prices historically have limited the U.S. geoexchange industry.
HISTORY AND RECOMMENDATIONS
During the course of the past 35 years—essentially since the OPEC crisis of the mid-1970s—energy-efficiency programs have been introduced around the world by local, regional and federal governments, as well as large and small utilities. Where incentives for geoexchange have been introduced without a direct and firm link to a meaningful quality-assurance program, such as in Sweden in the 1970s and Canada in the 1980s, unqualified and/or incompetent contractors actually have harmed the technology’s medium-term adoption and long-term future. Badly or even wholly untrained contractors sold heat-pump systems to consumers—in some cases marketing the subsidy before the system—and created a set of high-profile failures. In Sweden and Canada, this led to a widespread assumption that geoexchange didn’t work or no contractor could be trusted. This assumption lasted almost 20 years in Canada’s case, abating only with time and the introduction of the national quality program.
Because no U.S. standard or geoexchange-quality program exists, it would seem that geothermal heat pumps may create unknown liabilities for U.S. professionals. Stakeholders can protect themselves in a number of commonsense ways, including the following:
1. Notify insurers the project will include a geothermal-heat-pump system and verify or negotiate insurer requirements and coverage.
2. Require contractors to have the Canadian national accreditation card. This card means the contractor has current training on standard CSA C-448-02 and provided background documentation, such as trade tickets and affidavits. (More information about program requirements and a list of Canadian-accredited professionals available to work in the U.S. is available at CGC’s Web site.)
3. Include prequalifications, such as previous experience designing/ installing geothermal heat-pump systems and a specific level of detailed training, in contract documents.
4. Solicit bids from three or more contractors, and require client references. 5. CGC’s U.S. members also may be used as a resource though membership is not directly related to or required for Canadian quality-program participation.
According to CGC case studies, when executed properly, geoexchange systems have proven to deliver heating and cooling at efficiencies as high as 1,200 percent whether electrically or gas driven. The technology also can help smooth utility-demand profiles, grow system flexibility and reliability, open useful mechanical room space, as well as generate significant energy and carbon savings. However, given the lack of current training and organized industry infrastructure in the U.S., specifying agents and owners are well advised to take extra caution when choosing geothermal or groundsource heat-pump technology.
TED KANTROWITZ is vice president of the Canadian GeoExchange Coalition, Montreal. Formerly with the city of Chicago’s Center for Green Technology, Kantrowitz has been involved in issues of sustainability and building in the U.S. and Canada since 2002. He can be reached at firstname.lastname@example.org or (514) 807-7559, ext. 34.