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 $2.57/gal, electric $0.10/kwh.

Proposed upgrade:  
Geostar Magnolia Plus 5-ton dual-capacity ground-sourced heat pump with 5-speed ECM blower (365% average heating efficiency, SEER 20.5 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 gross price: $23,155

Estimated Annual Operating Costs($)


So the average monthly energy savings is (2281/12=) $190.

But it gets better. This installation should be eligible for the 30% Federal Tax Credit (which was reinstated in Feb 2018). That amounts to an additional savings (at tax time) of $6945, bringing the net initial investment down to $7835.

The Year 1 ROI – return on (net) investment – is (2281/7835=) 29%. Pretty darn good versus the alternatives to investing your money!

But let’s say you don’t have the ready cash and have to finance the $7835…

So let’s take a look at a couple of the many financing options that we offer:

Option #1:

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

  • monthly payment of $64*
  • net cash flow is (190-64=) $126/month or $1507/year for the term of the loan

Option #2:

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

  • monthly payment of $76*
  • net cash flow is (190-76=) $114/month or $1371/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 $2281… and this is probably conservative as propane prices historically rise faster than electricity rates.

If you opt to finance with a home equity loan (APR 4.4% for 15-year term*) from your bank, monthly payments will be $58* and your net annual cash flow, $1581.

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.

*Loans provided by EnerBank USA, Member FDIC, (1245 Brickyard Rd., Suite 600, Salt Lake City, UT 84106) on approved credit, for a limited time. Repayment term is 240 months. 4.99% fixed APR. Minimum loan amounts apply. The first monthly payment will be due 30 days after the loan closes.

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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