Did I Get the Wrong Heat Pump: Geothermal vs Air Source

What if the most efficient way to heat and cool your home might not actually be the best choice for you? Geothermal heat

pumps are the gold standard for efficiency. They're also the most

efficiency. They're also the most expensive upfront investment that you can make in your home's HVAC system. So,

are they really worth it or should you just use an airsource heat pump instead?

I've been living with my geothermal system for 2 years now, and I've covered it extensively on this channel, but I wanted to dig deeper. So, I reached out to my friend Paul Baron, who installed an Airsource heat pump system in his

Connecticut home around the same time I was building mine. We're both in New England. We both have detailed energy

England. We both have detailed energy monitoring, and we both ditched fossil fuels completely. It's a perfect setup

fuels completely. It's a perfect setup for a realworld comparison. Here's the

thing, though. After crunching the numbers, this isn't going to be a straightforward geothermal winds or air source better story that you might expect. The actual data surprised both

expect. The actual data surprised both of us. I'm Matt Ferrell. Welcome to

of us. I'm Matt Ferrell. Welcome to

Undecided.

This video is brought to you by MicroEnter. And before we get into

MicroEnter. And before we get into pitting one system against the other, let's cover a few of the basics. Heat

pumps move heat instead of generating it through combustion or resistance heating. In summer, they move heat from

heating. In summer, they move heat from the inside of your home to the outside.

In winter, they pull heat from outside, amplify it, and pump it into the home.

That's why you can get 3 to 5 units of heating or cooling for every unit of electricity that you use. It's a very efficient system. And the difference

efficient system. And the difference between geothermal and air source is simple. Geothermal exchanges heat with

simple. Geothermal exchanges heat with the ground through underground pipes in a circulating fluid. Airsource systems

exchange heat with outside air using an outdoor condensing unit. Both beat

burning fossil fuels by a long shot. I

live in Massachusetts. Paul lives in Connecticut. In New England, winters are

Connecticut. In New England, winters are cold, electricity is expensive, and we both work from home. That means our systems run constantly. However, we made very different choices with what systems

we installed. I went geothermal when I

we installed. I went geothermal when I built my netzero home. Paul went

airsource when he gutted and renovated his 1990s house. So, let me walk you through what that meant for each of us.

My geothermal installation was part of a new build, which gave me some advantages. I drilled a single vertical

advantages. I drilled a single vertical well 400 ft deep in my backyard. A

closed loop tube runs down into the well and back up into the house, circulating fluid that exchanges heat with the earth. Once you get down to about 6 to

earth. Once you get down to about 6 to 10 ft below the surface in my area, the earth becomes a consistent about 50° F or 10° C. If you have room, you can go with a horizontal loop where they dig

across a large area of your property about 6 to 10 ft down. That's cheaper

than drilling vertical, but the process does require more space. The system

itself is a water furnace series 7, which has variable speed control. That

means it can ramp up or down to maintain precise temperature without constantly cycling on or off. One of my favorite features is the duper heater. It

captures waste heat from the compressor and uses it to preheat water in a holding tank. That preheated water feeds

holding tank. That preheated water feeds into my heat pump water heater. And as a result, I get hot water from heat that would otherwise be wasted. And overall,

I installed the water furnace system, a 400 ft well, an ERV, and a whole house dehumidifier.

Paul's situation was completely different. He bought an existing house

different. He bought an existing house built in the 1990s that was in essence designed to be leaky. Back then, homes were built that way to provide return air for gas burning equipment. His house

was doing eight air exchanges per hour.

He may as well have been leaving the windows cracked open all the time. So

Paul didn't just install a heat pump. He

completely transformed his house. After

enough air sealing, the house went from 8 air exchanges per hour to8. This also

meant removing the natural gas line, meter, furnace, and all the other such hardware that goes along with that. Paul

also removed all the baseboard heating, water loops, and attic duct work. He

designed a completely new system from scratch. The old system had single

scratch. The old system had single registers at each door with short duct runs. If you close a door, it relied on

runs. If you close a door, it relied on return air going under the door. In his

previous home, which was nearby and built by the same builder, Paul's office used to climb to 85° F or 29° C when he was working with the door closed. For

this home, to combat this, he designed proper duct work for each room with dedicated air returns. He installed two Bosch airs source heat pump systems, two outdoor condensers, two air handlers, an

ERV, and a whole house dehumidifier.

Now, before we get to the performance data and costs, I need to talk about something else that both Paul and I experienced. Finding qualified

experienced. Finding qualified contractors who understand modern heat pump systems and efficient homes is not easy. One of the first contractors I

easy. One of the first contractors I contacted created a wildly complicated and overengineered design that would have been very costly. Paul had one contractor literally walk out of his house partway through the consultation.

The guy looked at Paul's requirements for efficient sizing and properly designed duct work for each room and said he couldn't handle it. He literally

didn't just walked away. The installer

he did go with oversized the system even after Paul had explained that he was air sealing the house with arrow barrier, improving the insulation and replacing all 32-year-old windows with new triple

pane windows. Paul's saving grace was

pane windows. Paul's saving grace was that both Bosch units had a dip switch that let them operate as two-ton units instead of three-ton units. That dip

switch probably saved thousands in operating costs by preventing the systems from short cycling. The point is this stuff matters. Bad installation can ruin even the best equipment. And there

aren't enough contractors who really understand these newer high efficiency systems yet.

After 2 years living with my geothermal system, there were a few things that caught me by surprise. But before we get into the surprises, let me tell you about something else that can help your HVAC experience in a fun way. That's

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And thanks to MicroEnter and to all of you for supporting the channel. All

right, let's get into a few of the things that caught me by surprise. The

biggest one, I never touched the thermostat, like ever. In every house I've ever lived in before, I had thermostats on timers or smart thermostats that adjust things on the fly. Drop the temperature when you're at

fly. Drop the temperature when you're at work, raise it before you go home. But

geothermal systems, they actually don't want that. The ground loop provides a

want that. The ground loop provides a powerful buffer with high thermal inertia. It absorbs and releases heat

inertia. It absorbs and releases heat gradually thanks to the Earth's stable underground temperatures. This makes the

underground temperatures. This makes the system slower to ramp up or down in response to big temperature changes. And

that sounds like a downside, but it's actually a benefit. The result is highly efficient constant temperature that also reduces wear and tear on the equipment.

The system isn't cycling on and off or trying to play catch-up. Paul's

experience is different. His air source system operates more like a traditional HVAC setup, but with two air handler speeds and a variable speed heat pump that likes to run most of the time. It's

generally blowing air that isn't super hot or cold. Mine does the same thing.

While it can respond somewhat faster to demand changes that has pros and cons, but that leads to something Paul found surprising. The similarity in the

surprising. The similarity in the experience was actually a surprise to me when you talked about not setting back or changing your thermometers much.

That's true here, too. Now, I do have zoning, so one room might be 3° warmer on purpose than in an adjoining room, but I leave it. If I set it back, it gets too fancy and it's got to catch up in the morning. And whether it's

geothermal um ground source or air source heat pump, you don't really want to mess with your temperature much if you're only leaving the house for 4 or 8 hours, that is nothing like a regular

house or how my houses used to be.

And here's something that both Paul and I deal with that most people don't.

Humidity control in spring and fall is tricky. Your air conditioner

tricky. Your air conditioner dehumidifies the air as a side effect of cooling. Cold coils make moisture

cooling. Cold coils make moisture condense out of the air. In May or October, though, when it's 70° F or 21°C outside and it's comfortable inside, the

AC isn't running, but it can still be humid and uncomfortable. That's why we both have whole house dehumidifiers.

Mine runs mainly in May, June, September, and October. I have it plugged into a smart outlet so I can turn it off completely in winter and summer when it's not needed. Paul has an April Air unit with similar setup and

his runs during those same shoulder months of the fall and spring. It's one

of those things that adds to the total system cost but makes the whole house much more comfortable year round.

Both Paul and I have energy recovery ventilators or ERVs because our houses are so airtight and both of us regret how they're integrated with our HVAC systems. An ERV brings fresh air into

your house while recovering heat or cooling from the exhaust air. It passes

stale inside air through tiny vents on the way out. Parallel to those vents, fresh outside air passes through as it comes in. Heat moves from the hotter

comes in. Heat moves from the hotter vents to the cooler vents. In summer,

you're pre-cooling hot outside air. And

in winter, you're preheating cold outside air. In both of our cases, the

outside air. In both of our cases, the ARV is tied to the air handler. It only

runs when the HVAC system is already running for heating or cooling. The

problem is in spring and fall the HVAC might not run for hours. Nothing's

needed for heating or cooling, but people are still breathing, cooking, and living inside the house. Paul's

situation is even more complicated. His

Bosch system is a high efficiency unit that gets its SER 20 rating, partly because it's great at removing heat, but it sometimes leaves the coils a bit wet.

If he runs the air handler after a cooling cycle ends, he may be blowing humid air into the house. Because his

ERV is tied to the air handler, he's left without a choice. If we were doing it all over again, we'd both install independent ERVs with their own duct work and controls. They'd run based on

CO2 levels, bathroom humidity, or a timer completely separate from the HVAC system.

All right, let's talk the numbers, cuz this is what I'm sure many of you are actually here for. Both Paul and I have detailed energy monitoring systems because we both use SPAN panels, which are smart electric panels. We can both

see exactly how much electricity our HVAC systems use broken down by individual circuits. So there's no

individual circuits. So there's no guessing, no estimates, just real data.

For a fair comparison, we're looking at just the core HVAC components. That's

the air handlers and the outdoor units.

For Paul, that means his two air handlers and two outdoor condensers. For

me, it's my geothermal unit. We're

leaving out the ERVs, dehumidifiers, and other accessories. Here, we're just

other accessories. Here, we're just measuring just the stuff that actually heats and cools the house. The grand

total for just heating and cooling.

Paul's home for 1 year is 12,571 kwatt hours of energy. Mine for the same time frame is 2,393 kwatt hours. If we normalize the cost

kwatt hours. If we normalize the cost per kilowatt hour to something like 30 per kilowatt hour, which is roughly where it sits for me, then we're looking at something kind of shocking. That

would cost roughly $3,771.30 30 a year for Paul versus $717.90 for me. My running cost is 19% of Paul's

for me. My running cost is 19% of Paul's yearly total. Remember that's per year.

yearly total. Remember that's per year.

However, a huge caveat is that we both have solar with battery storage. So much

of our actual cost is free sunshine. We

also both participate in virtual power plants or VPPS with our home batteries.

So, we get paid several thousand a year by the utility. I've got videos on all of that if you're interested. Also, my

house is a little more airtight and insulated than his house, so I retained my heated and cooled air better, but more on that in a minute. Here's where

it gets even more interesting. Paul made

significant improvements to his system during his first year. He shortened the duck work runs in the attic, reducing the distance that heated and cooled air has to travel. That single change improved his system efficiency by about

15%. Think about that for a second.

15%. Think about that for a second.

Optimizing the duct work design made a double-digit difference in energy use simply by moving air more efficiently over shorter distances and reducing energy losses. And Paul's not done. He's

energy losses. And Paul's not done. He's

still upgrading. His basement still needs insulation. The attic hasn't been

needs insulation. The attic hasn't been properly insulated yet after the duck work changes, and there are more efficiency gains coming. Meanwhile, my

system performance has been pretty stable since installation because everything was optimized from the start.

Efficiency-wise, heat pumps are at their best in mild weather. They lose more and more of that efficiency the colder the weather gets. In the summer, both

weather gets. In the summer, both systems perform well. Air conditioning

is basically the same operation for both geothermal and air source. My geothermal

system has an advantage because the ground is cooler than the outside air, even on a 95° day or 35° C. But the

difference is not dramatic. Winter is

where things get interesting. When it's

20° Fahrenheit or7° C outside, my geothermal system is exchanging heat with 50° F or 10° C ground. That's a

much easier lift than Paul's air source system trying to extract heat from that cold outside air. His system has to work harder and occasionally needs to run defrost cycles. And defrost cycles are

defrost cycles. And defrost cycles are when the outdoor unit temporarily reverses to melt ice buildup on the coils. During defrost, the system isn't

coils. During defrost, the system isn't heating your house. Most modern systems use backup resistance heating during defrost to keep things comfortable. The

problem is that's effectively running an electric space heater, which isn't super efficient. Paul noticed this in his

efficient. Paul noticed this in his first winter, especially on those humid but cold days when ice would form up on the outdoor units. He connected the defrost signal wires that the HVAC contractor failed to bother with. Now

the heat pump can tell the air handler to turn on the heat strips during this defrost cycle. Paul's wife no longer

defrost cycle. Paul's wife no longer needs to wonder why the AC is on in the middle of winter, sometimes several times a day during singledigit cold snaps. I don't have to deal with those

snaps. I don't have to deal with those defrost cycles at all. The ground

temperature is stable, so there's no ice buildup, reversing cycles, or backup heat needed.

So, let's talk about what you really want to know. Is geothermal worth the extra money? Now, my total system cost

extra money? Now, my total system cost before incentives was around $99,000.

After incentives, it came down to about $75,000. Paul's total system cost was

$75,000. Paul's total system cost was about $69,000.

Yes, I spent almost $100,000 before incentives, but after that 30% federal tax rebate on the core parts of the system, it came in at $75,000. That

includes all the duct work and labor for a new house. So, keep that in mind. As

for Paul, his number of $69,000 includes completely removing and redoing all the duct work, as well as the ERV. And my

system includes the ERV as well. If you

were to focus in on just the cost of the main system without all the new duct work, like you're doing more of a system swap, you'd subtract about $21,000 from mine and probably about $21,000 or so from Paul's. However, that's a very

from Paul's. However, that's a very rough guess because of the labor cost estimate. That would mean the systems

estimate. That would mean the systems would be around $48,000 for Paul's and $54,000 for mine. My system was projected to cost about half as much to operate each year compared to an equivalent airsource system that I

looked at for my specific house. Now,

these operational savings would have been roughly $1,000 in annual savings.

At that rate, the payback period for my specific setup would be about 14 to 15 years. But here's where things get

years. But here's where things get complicated. If I compared my

complicated. If I compared my operational costs to Paul's, which was around the equivalent of $3,000 a year, my system would pay off its premium compared to his system in about 2 years.

So, why the huge difference between the comparable Airsource quote that I got for my house versus Paul's airsource system? Why is one a $1,000 a year

system? Why is one a $1,000 a year savings versus $3,000 compared to Paul's? A lot of that, I think, can be

Paul's? A lot of that, I think, can be chocked up to the differences between the high R value of my home's insulation. We're talking about much

insulation. We're talking about much thicker walls with minimal thermal bridging and air tightness compared to Paul's house. The bottom line, I think

Paul's house. The bottom line, I think my house's construction and design is doing a lot of the heavy lifting there.

However, Paul's system is still improving. That 15% efficiency gain from

improving. That 15% efficiency gain from better duct work already happened. More

improvements are coming when he finishes insulating. His operating costs could

insulating. His operating costs could drop further, which could reduce more of that gap. There's also longevity to

that gap. There's also longevity to consider. A geothermal ground loops can

consider. A geothermal ground loops can last 50 years or more. The indoor

equipment might need replacing after 20 to 25 years, where airsource outdoor units typically last 15 to 20 years before replacement.

Paul and I both face something called the spark gap problem. That's the

difference between the cost of electricity and the cost of natural gas in your area. New England has some of the most expensive electricity in the continental United States. That makes

heat pumps less economically attractive here than in cheaper electricity markets. If you live somewhere with

markets. If you live somewhere with cheap electricity, heat pumps are no-brainer. But Massachusetts and

no-brainer. But Massachusetts and Connecticut, you need to be smart about it. Proper insulation, good duck work

it. Proper insulation, good duck work design, and efficient equipment all matter more here. This is also why Paul's 15% efficiency improvement from his duck work is such a big deal. That

directly translates to lower electricity bills in a high-cost market in our area.

There's also heat pump electricity rate incentives that are run by the utilities that you can sign up for to get cheaper rates.

So, which should you choose? Well, kind

of depends on your situation, your timeline, and your priorities.

Geothermal makes sense if you're building new or doing a major renovation. When you're already tearing

renovation. When you're already tearing everything up, the incremental cost is manageable. For instance, it could be

manageable. For instance, it could be rolled up into the mortgage like I did.

US data shows payback periods ranging from 3 years to a decade. You also need space for a vertical well or horizontal ground loop. Companies like Dandelion

ground loop. Companies like Dandelion Energy have compact drilling rigs that fit in tighter lots. If you have room for a horizontal loop, you'll save significantly compared to the $18,000 that I paid for drilling. For me,

geothermal was the right choice. I was

building new with a long-term mindset.

My system is performing better than projected, and I'm on track to easily recoup the costs over the decades that I plan to live here. Air source makes sense for almost everybody else. Modern

cold climate units work down to -15° F or colder. If you already have decent

or colder. If you already have decent duct work, installation costs drop dramatically. Airsource also offers

dramatically. Airsource also offers flexibility. Paul has two systems for

flexibility. Paul has two systems for redundancy. If one fails during a winter

redundancy. If one fails during a winter vacation, the house won't freeze. That

peace of mind matters when you've eliminated all fossil fuel backup. For

Paul, retrofitting with good air source equipment was the right call. The

upfront cost was comparable once you factor in all the renovation duct work.

And he's getting excellent comfort with efficiency that's way better than any fossil fuel burning furnace. On top of that, we're both mostly powering our systems with free sunshine. And over

time, the grid power that our homes are using in winter is becoming more and more renewable. One of the key takeaways

more renewable. One of the key takeaways was that there's a lot you can do to make your home more energy efficient with proper insulation, windows, and so on, just as Paul found out.

>> But now that I have it all figured out and working, oh man, it feels good. I

understand it all. I totally get it.

Everything's tuned right. It just it's quite comfortable. And now my electric

quite comfortable. And now my electric bills next winter, they are going to be less than the last two.

>> The real winner isn't one technology or the other. It's the heat pump concept

the other. It's the heat pump concept itself. Moving heat instead of burning

itself. Moving heat instead of burning something is fundamentally more efficient. Whether you move that heat

efficient. Whether you move that heat from the ground or from the air is kind of a minor detail compared to the leap from combustion to heat pumps. So, if

you're ditching your gas furnace or oil boiler, don't get too hung up on geothermal versus air source. Focus on

equipment that's suited to your climate and properly sized for your home with good insulation, quality installation, and finding a contractor who actually knows what they're doing. Get those

fundamentals right and either technology will serve you well. At the end of the day, heat pumps rock no matter which kind you choose. What do you think? Are

you team geothermal or team airsource?

Are you still burning dinosaurs in your basement? Jump in the comments and let

basement? Jump in the comments and let me know. And be sure to listen to my

me know. And be sure to listen to my follow-up podcast, Still to be Determined, where I'll have the full conversation with Paul, coming out soon.

Thanks as always to my patrons for your continued support and for helping to keep the channel going. Keep your mind open, stay curious, and I'll see you in the next