Geothermal advocates argue the heating and cooling systems are a good option for homes and businesses in urban and suburban areas.

Editor’s note: This story was updated to clarify the nature of the composite material used in the Unity Temple geothermal system.

The three-flat being gutted and rebuilt in a trendy neighborhood on Chicago’s North Side didn’t look much different from the other brick and stone buildings on the leafy street. But the rehab was notable because of the geothermal heat pump being installed in the small yard behind the building.

In rural areas of downstate Illinois, geothermal heating and cooling systems are a common feature, installed in more than half of new homes in some counties, according to the Geothermal Alliance of Illinois. But in urban and suburban areas in and around Chicago, geothermal systems are rare. The cost of labor and installation is much higher, there is little open space to install horizontal loop systems, and most people know little or nothing about geothermal and never considered it an option.

But geothermal installers and advocates and the utility ComEd want to change that. They argue that despite the higher installation cost and tighter spaces, geothermal is a good option for homes and businesses in urban and suburban areas, that can save people money on heating and cooling, reduce fossil fuel emissions and help the utility increase its efficiency.

While geothermal systems can cost tens of thousands of dollars to install, they can save about 50 to 70 percent on energy costs, geothermal experts say. The U.S. Department of Energy says geothermal heat pump systems usually are paid back in five to 10 years, with the in-home components lasting about 12 years and the pipes in the ground lasting more than 50 years.

While rural geothermal systems typically involve pipes placed underground horizontally in a large “field,” pipes can also be driven into the ground vertically for a much smaller surface footprint. That means geothermal can be installed under a small area of yard or parking lot, possibly even as small as a dining room table, as ComEd senior energy efficiency program manager Kelly Gunn put it.

And ComEd is offering incentives to help make the upfront costs of installation more affordable. The utility is planning to step up advertising of its residential geothermal incentive program, which has existed for two years, and it is running a new pilot program offering incentives for commercial geothermal — larger installations for businesses, hospitals, schools, and other institutions.

Building excitement around geothermal

The geothermal experts gathered around design engineer Mark Nussbaum inside the historic Frank Lloyd Wright-designed Unity Temple in the Chicago suburb of Oak Park marveled at the twisted maze of pipes packed into a tight crawl space. Nussbaum, principal with the local firm Architectural Consulting Engineers, specializes in designing and implementing geothermal systems in historic buildings, which pose special challenges since structures can’t be altered or damaged under preservation laws.

The temple did not previously have air conditioning, and geothermal — with nine pipes in a 500-foot deep vertical well — was the only way to make cooling structurally and financially viable. It also means lower energy bills for the foundation that runs the temple. By harnessing the temperature differential between the earth and air, geothermal systems use a heat exchange system to both heat and cool with much less electricity than would be needed for typical cooling or forced-air heating systems, and without burning natural gas as many Chicago buildings do for heat.

Nussbaum implemented the geothermal installation, completed last year, as part of a larger $25 million rehab of the aging temple. It took ingenuity to pack the system’s interior pipes into tiny spaces throughout the temple and to open air vents without changing the temple’s appearance. He also integrated the geothermal system with the building’s historic radiators, which are needed in order to reduce humidity on the walls.

“We call this the USS Unity Temple,” Nussbaum said, because the pipe-filled crawl spaces remind him of the ship machine rooms from his time in the Navy.

Kari Lydersen / Energy News Network

The fact that the Unity Temple geothermal installation was successful shows that geothermal can be retrofitted into almost any structure, Nussbaum said. “You can be as creative as you want to be. If I can get the pipe in the ground somehow, then I can connect it to my system. The only limit is your imagination.”

The Unity Temple system utilizes a type of composite pipe typically found in gasoline and chemical applications. The composite nature of the material enables it to be engineered for lower thermal resistance. This means less pipe, and fewer holes drilled, when compared to older plastic pipe systems says Lane Lawless, operations manager for the Oklahoma based company Rygan. He said the material is more expensive than conventional plastic but money is saved with less drilling.

“It’s ideal for urban locations because you don’t need to poke as many holes in the ground,” Lawless said.

Along with heating and cooling the building, the geothermal system is also used for hot water and to warm the pavement to melt ice outside. Along with warming sidewalks and terraces, the “rejected heat” that is emitted from geothermal systems can also be used to heat backyard pools or hot tubs, Nussbaum noted.

With Geothermal Alliance of Illinois executive director John Freitag, geothermal designer David Buss and Lawless in tow one day in September, Nussbaum showed off several more installations he’s designed in the Chicago suburbs. A historic 120-year-old fire station-turned museum in suburban Cicero now has geothermal for heating and cooling, saving the nonprofit that runs it money on energy bills, Nussbaum explained. The system is tucked under the front patio, decorated with bright flowers.

At a park nearby, geothermal was essential to achieving LEED platinum certification for the airy, attractive field house building, which has solar panels on the roof, highly energy efficient windows and is built with local ash trees that fell victim to the ash borer beetle epidemic. The geothermal system, about equivalent to a typical residential system, involves two 450-foot-deep vertical U-shaped loops.

The nonprofit organizations that Nussbaum often works with cannot take advantage of federal tax credits for commercial geothermal, worth 10 percent of the installation cost through 2022. Nonprofits installing solar often enter third-party ownership agreements where a for-profit entity can reap tax benefits and pass them on. But such arrangements are rare in geothermal.

Still, Nussbaum said, nonprofit organizations are attracted by the energy savings over the long-term and other benefits of geothermal, like a quiet system that needs little maintenance, poses no safety risks (like gas-fired heaters) and lasts for decades, and the environmental aspect.

A geothermal system is crucial to achieving a true net-zero building, Freitag said — “It’s the most environmentally friendly system available and it lasts forever.”

Making it work

Under ComEd’s pilot program for commercial geothermal incentives, institutions can receive a $1,000 rebate per “ton” of installation. A ton is a measure of refrigeration capacity equivalent to 12,000 BTU/hour, with the term originally derived from the heat of burning a ton of coal. A large geothermal system might range from 10 to 50 or more tons, while a home’s system would typically be four to five tons. The pilot program was launched this year and applications are open through February 2019, while construction must be completed by June 2019.

So far only one participant has registered for the program, but ComEd senior emerging technology program manager Mark Milby, who oversees the program, said several others are interested and he hopes many more enroll as the utility gets word out. ComEd has long offered incentives for commercial geothermal installations, Milby explained, but they were based on a complicated process of calculating energy savings that dissuaded most customers from applying. He said the utility is working hard to design a more user-friendly incentive through the pilot program.

“We’ll see if this moves the needle in terms of number of installations,” he said. “By offering incentives like this, are we able to tip the scales in [commercial customers] choosing geothermal over a standard system that’s less efficient?”

Among other things, ComEd wants to let businesses and institutions know that they don’t need much outside space to do geothermal.

“If you plan it into the building from the beginning [space is] really not an issue, and in a retrofit, typically it can be done in a parking lot or any exterior part of the property, like where there’s landscaping,” Milby said.

ComEd’s residential geothermal incentive program offers a rebate of up to $1,000 per ton up to $6,000. Since the program launched in June 2016, a total of $237,700 has been paid out in rebates, Gunn said. The average rebate is about $4,000, meaning roughly 60 homes have received rebates. ComEd is now also offering rebates when geothermal equipment inside the home needs to be replaced, with pipes already underground. Homeowners can also access a federal tax credit currently worth 30 percent of the installation cost, ratcheting down and phasing out by 2022.

Along with offering rebates, ComEd works with customers to choose a geothermal installer that is certified by the state alliance and to help the customer figure out the system that is best for them, given multiple design and size options. In a few months, Gunn said, the utility will send out mailers to homes that seem particularly well-suited to geothermal.

Since geothermal systems mean less energy used for heating and cooling, increased installation will help ComEd meet the energy efficiency goals that are mandated under the state’s 2016 Future Energy Jobs Act, Gunn said. And increasing geothermal is part of the company’s vision for becoming a “utility of the future.”

“It will help us reduce overall load — that’s the biggest piece of the pie, and there are a lot of other great benefits,” Gunn said. “Having contractor education, job creation, also opportunities for customers to have different systems available for them — all these energy efficient options. It goes even beyond energy savings — it’s the market transformation we want to be a part of.”

Overcoming challenges

As Freitag and Mike Vdovets, executive vice president of Geothermal Energy Solutions, stood in the gutted second floor of the Chicago residential building and looked out at the yard where Vdovets’ company was installing geothermal, they lamented that many HVAC contractors in Chicago are untrained in geothermal installation. While there is no mandatory certification needed to install geothermal, the state alliance and ComEd are trying to ensure customers work with experienced installers with the alliance’s certification.

That is especially important, they said, since geothermal in the Chicago area is still relatively unknown, and they don’t want stories of bad experiences to poison the well of potential new customers.

“It’s really important with geothermal that people work with experienced dealers that have well-trained, certified installers,” Freitag said. Among other things, that helps ensure people get the right-sized system.

“Oversizing means a lot more installation expense for the customer, and the systems won’t provide proper dehumidification in the summer cooling season. Undersizing means that the geo system won’t meet the heating or cooling needs of the facility properly.”

Geothermal is significantly more expensive in the Chicago area than in rural downstate Illinois, including parts of ComEd’s service territory outside the city. That’s because it’s expensive to drill the geothermal wells in the city, in part because of the difficulty of moving heavy equipment through city streets and high prevailing union wages.

But Freitag and other geothermal backers say the investment is worth it, for businesses, nonprofits, homeowners and owners of multi-unit buildings — who can pass the energy savings on to their tenants as an incentive to rent, or charge their tenants fixed energy rates and keep the savings themselves.

In central Illinois where Freitag lives, he said it’s common for neighbors to discuss their geothermal systems. But in areas with little geothermal penetration, spreading the word is harder. Unlike with solar energy, people usually won’t even know when their neighbors install geothermal.

“There’s nothing to see, you don’t have the keeping up with the Joneses” effect, said Freitag. Nonetheless, “we’re making inroads here, I think [in northern Illinois] we’ll be doing it more and more.”