Geothermal vs. Traditional HVAC – What’s the Difference?

Geothermal heating and cooling systems (GeoExchange) that use the earth as a heat storage are becoming increasingly common among residential and commercial real estate developers. 

Even though geothermal is a reliable, proven technology that has been around for over 70 years, many people still don’t know exactly how it works or how it compares to traditional HVAC heating and cooling. How does geothermal actually work? Do you need access to a hot spring to use it? Read on for the answers to these questions and more.

 
 

How does traditional HVAC work?

Conventional HVAC and geothermal systems share some similarities: they both move energy to where it’s needed in a multi-unit building. But don’t let the similar functions fool you: there are a few major differences that distinguish these two systems.

The most important differences boil down to the handling of the most crucial element: heat. In a traditional HVAC system, a boiler that is generally powered using a fossil fuel, such as natural gas, generates heat for the system. That heat is transferred to the building’s central water loop, which distributes it throughout the building. When the weather is hot, heat pumps or other equipment remove heat from the air and transfer it into the water loop, which then transports it to a cooling tower, often located on the roof, where it is dispersed from the system into the atmosphere.

What is geothermal energy and how does it differ from conventional HVAC?

Geothermal systems operate in a similar way to conventional HVAC systems to heat and cool your building. But unlike traditional HVAC systems, geothermal doesn’t use boilers or cooling towers, and contrary to a widespread misconception, you don’t need an underground heat source to take advantage of geothermal. In fact, you can install geothermal almost anywhere. Like we said previously, it all boils down to heat. When it’s hot outside, geothermal systems still use the same inbuilding systems to remove the heat from the air, just like conventional HVAC. The heat is transferred to the same water loop, but instead of releasing it to the air, the system stores it underground in a custom-built thermal borefield, using the earth like a thermal battery. In the winter, this borefield replaces the traditional boiler and provides heat to the central water loop that the building mechanical system uses to create heat to warm the units.

Geothermal advantages

Geothermal vs. traditional HVAC at a glance

While conventional HVAC and geothermal are both designed to heat and cool multi-unit buildings, there are a few important advantages of geothermal systems:

  • No GHG emissions: The lack of GHG emissions means your project complies with increasingly strict emissions targets, without resorting to expensive deep retrofits

  • Stable operating costs: Geothermal systems are not subject to fluctuating fossil fuel prices; you know what you’ll pay upfront for transparent operating budgets and predictable cash flows

  • Improved marketability: Studies have shown that consumers want to buy or lease in environmentally friendly buildings, and the lack of outdoor equipment means more room for premium value-added amenities, like rooftop patios, or additional energy-saving features, like green roofs

Two geothermal models for property development: DIY vs. energy as a service (EaaS)

Building regulations are becoming increasingly stringent, especially in Canadian urban centres. The Toronto Green Standard (TGS) Version 4, which will apply to new development applications beginning on May 1, 2022, establishes more advanced requirements for energy efficiency and greenhouse gas reduction and includes specific provisions related to the use of geothermal technology.

Now that you understand how geothermal works, you’re ready to look at options for using it on your next building project. There are two ways you could go about incorporating geothermal into your build:

Do-it-yourself, aka DIY

As the name suggests, DIY implies that developers manage all the aspects of the geothermal project themselves. In most cases, they might choose to hire a consultant, an engineer, and contractors to design and build the borefield for them. The developer (or future building owner) is responsible for the construction and system management and operation. While the DIY model appears easy and advantageous on the surface, inexperience and a lack of expertise can doom many promising geothermal projects. Often, the risk is higher than the reward.

Energy-as-a-Service (EaaS)

Energy-as-a-service (EaaS) means customers pay for energy without having to make an upfront capital investment in the necessary infrastructure or take on any of the risk associated to construction and operation of the system. With this model, developers entrust the design, construction, and maintenance of the geothermal system to a geothermal expert. The expert shoulders all the risk and responsibility and the developer gets the credit for meeting strict energy efficiency targets without the potential pitfalls of the DIY model.

Is geothermal the right technology for your project?

Geothermal is a mature technology that can be used almost anywhere to meet green building standards, boost building efficiency, and even increase property value. Best of all, there are business models that completely transfer the risk and liability for building and maintaining geothermal systems to experts who can ensure your project goes off without a hitch.

Diverso Energy a geothermal utility company that designs, builds, owns and operates geothermal systems for multi-family, office, and institutional buildings. We can help you integrate the optimal geothermal system for your project, reduce costs, maximize return and eliminate the risk. Want to learn more? Get in touch with us today.

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