Let’s take a detailed look at the economics of replacing an existing heating and cooling system with a geothermal system by running the numbers for a fairly typical situation:

Geothermal Financing

Current scenario:
A 2-story, 2400sf home with full basement; central air conditioning (SEER 12), propane-fired furnace (93% efficient) and hot water heater; occupied by family of four. From a thermal standpoint, the house is well insulated and sealed with above average windows and doors. Fuel costs are propane $2.47/gal (the NYS 10-yr average), electric $0.10/kwh.

Proposed upgrade:  
Geostar Magnolia Plus 5-ton dual-capacity ground-sourced heat pump with 5-speed ECM blower (380% average heating efficiency, SEER 21 average cooling efficiency) connected to a horizontal ground loop; 2-tank hot water system with heat pump desuperheater which provides 50% of hot water demand. Total system cost: $23,000





Estimated Annual Operating Costs($)


So the average monthly energy savings is (2080/12=) $173.

As the system qualifies for the NYSERDA GSHP Rebate Program, a $7500 grant reduces the net cost to $15,500.

Let’s take a look at a couple of the many options that we offer for financing 100% of the net cost:

Option #1:

20-year term, unsecured loan, effective APR of 7.79% →

  • monthly payment of $128
  • net cash flow is (173-128=) $45/month or $540/year for the term of the loan

Option #2:

12-year term, unsecured loan, effective APR of 5.85% →

  • monthly payment of $150
  • net cash flow is (173-150=) $23/month or $276/year for the term of the loan

Option #3:

15-year term, home equity loan, effective APR of 4.10% →

  • monthly payment of $115
  • net cash flow is (173-115=) $58/month or $696/year for the term of the loan

Both options result in immediate positive cash flow. After the loan is satisfied, net annual savings rises to $2080… and this is probably conservative as we’ve assumed no rise in propane costs over time.

BOTTOM LINE (in this example): Your geothermal system is not only affordable, it actually pays for itself and then some while you’re retiring the loan; thereafter, the savings is HUGE!  All the while, you’re enjoying a more comfortable heating & cooling system with a much smaller carbon footprint. PRETTY COOL!

An even cooler scenario is if the system cost is folded into a mortgage (e.g. new construction). Read our related blog post: Folding a Geothermal Installation into a New Mortgage.

Lake Country Geothermal, Inc. services the Finger Lakes and Greater Rochester NY areas, including Albion, Auburn, Avon, Batavia, Bloomfield, Branchport, Brighton, Bristol, Brockport, Caledonia, Canandaigua, Clifton Springs, Clyde, Cohocton, Conesus, Churchville, Dansville, Fairport, Farmington, Gates, Geneseo, Greece, Groveland, Hamlin, Hemlock, Henrietta, Hilton, Honeoye, Honeoye Falls, Ionia, Interlaken, Irondequiot, Kendall, Keuka Park, Leroy, Lima, Livonia, Lodi, Lyons, Macedon, Marion, Macedon, Mendon, Mount Morris, Mumford, Newark, North Rose, Ontario, Ovid, Palmyra, Pavilion, Penfield, Penn Yan, Pittsford, Port Byron, Prattsbugh, Pultneyville, Red Creek, Riga, Rush, Savannah, Scottsville, Seneca Falls, Sodus, Shortsville, Spencerport, Springwater, Victor, Walworth, Wayland, Webster, Weedsport, Williamson, Wolcott, Wyoming.

Financing an Existing Home Installation

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