Geothermal: Long Islanders spend, save on heating, cooling homes

Daniel Gontcharenko and his partner, John Daidone, installed solar panels on their Riverhead house a little more than five years ago to harness the sun and battle high electricity costs. Then they went further, using the power of the earth to provide heating and cooling.

They installed a geothermal system — a pricey but environmentally friendly technology that pipes fluid through the ground to generate heat in the winter and cold in the summer. Their system cost $45,000 in 2018. However, Gontcharenko, 63, a director of client services for a marketing firm, said they received PSEG Long Island rebates and tax credits totaling $23,000, so their actual cost was $22,000. He and Daidone, 62, a technical writer and editor, like living in a house that provides its own power, heating and cooling.

"In the five years that we've been in our home, we only had two months when we had to pay a small electric bill," he said. "Environmentally, it makes us feel good that our home energy costs aren't contributing to carbon emissions."

Gontcharenko and Daidone are two of a steadily growing group of Long Islanders who have installed geothermal systems in their homes. Despite high upfront costs, experts say geothermal's popularity is heating up.

What is geothermal and how does it work?

Geothermal systems replace traditional HVAC systems powered by electricity, gas or oil, according to Mike Voltz, PSEG-Long Island's director of energy efficiency and renewables.

Water blended with antifreeze typically is piped underground where groundwater temperatures range from 45 to 60 degrees, he said. It is run through a compressor and heat pump system to heat or cool, depending on the time of year.

You have a hot and a cold side. A refrigerator is cold inside. Put your hand on the back of the refrigerator, it's warm.

— Mike Voltz, PSEG-Long Island's director of energy efficiency and renewables

"There's a ground loop of pipe with water at a constant temperature underground," said Billi Roberti, president of Green Choices Consulting, a renewable energy consultant in Huntington Station. "In the winter, it's warmer than the air. It feeds the heat into the heat pump. In the summer, it's cooler than the air."

Voltz compared the process to a refrigerator. "You have a hot and a cold side. A refrigerator is cold inside. Put your hand on the back of the refrigerator, it's warm."

Systems need a certain amount of contact with the ground for what is usually 1½-inch diameter polyethylene pipe to reject and absorb heat from the soil. Because Long Island ground often includes sand, it can be "relatively easy to drill," Voltz said.

Geothermal systems typically involve digging wells, usually 200 to 250 feet deep, according to Voltz. Thomas Beague, 60, a dentist who lives in Westbury, said his geothermal system includes five 300-foot-deep wells. "That itself is a nice cost," he said of wells, for which he paid at least $8,000 each.

Jack Rosebery, an architect based in West Sayville, said more geothermal "wells" are being dug than drinking water wells.

"Most of the wells they do nowadays are geothermal," said Rosebery. "Larger homes out east are going more to geothermal wells and electric heat pumps to bring energy usage down and also get the cost savings and rebates that are offered."

How much does geothermal cost?

"When people find out the upfront cost, they're concerned," Roberti said. "Like any other investment, you have to lay out money, before you get it back."

Systems vary in cost depending on features, how a home is currently heated and cooled, square footage and insulation, according to Zachary Fink, president of ZBF Geothermal Commack.

At ZBF, Fink said, installing a geothermal system for a 2,000-square-foot house costs between $55,000 and $70,000, before incentives, if the house needs ductwork installed. Additional thermostat zones, humidifiers and other factors can increase the installation costs. ZBF's systems generally start at $45,000 for houses that have a single unit and pre-existing ductwork.

Incentives typically cover 40 to 50% of the installation costs for single-family residential houses, Fink said. A system installed in someone's primary residence, in PSEG Long Island's service territory, qualifies for a 25% state tax credit up to $5,000, a 30% federal tax credit (with no cap) and a PSEG Long Island Geothermal Rebate.

"There are lots of incentives to encourage clean, energy-efficient technologies," Voltz said.

Jim Felakos, a 53-year-old attorney, said it used to cost almost $5,000 a year to heat and cool his 2,600-square-foot ranch in Mattituck. Today, he spends virtually nothing. He and his wife, Liz Sieczka, a 55-year-old doctor, installed a geothermal system about four years ago. It cost $48,000, including $32,000 for the geothermal units and $16,000 for the wells. But that was before $14,000 in tax credits and $8,000 in PSEG Long Island rebates of $2,000 per ton.

"Between geothermal and solar, we are paying next to nothing for heating and cooling, and we no longer have an oil bill," said Felakos.

The federal government offers a 30% investment tax credit allowing 30% of a system to be deducted from taxes, and New York State offers a 25% tax credit capped at $5,000. PSEG Long Island offers between $1,000 and $2,000 per ton rebates, depending on the equipment's efficiency, with a typical system at 4 tons, generating $4,000 to $8,000 in incentives, according to the utility.

"By offering incentives, we can encourage customers to put in more-expensive upfront systems that are more energy efficient," Voltz said.

PSEG Long Island at Psegliny.com maintains a list of contractors approved for rebates for installing geothermal systems. "I generally recommend you get three written quotes," Voltz said.

After hiring a contractor, it's important to get building permits for wells and heating and cooling system. Felakos, who has a GeoComfort unit, brought in a geothermal installer and a plumber, since the general contractor didn't know about the technology.

They had to wait to schedule drilling and laying the pipe outside. While installation can go smoothly, Felakos said the newly installed piping sprang a leak. "It took a little while to get that leak fixed," he said.

How popular is geothermal heat, cooling on Long Island?

Solar energy spread like wildfire, but geothermal's popularity has had a slower growth. While it leads to savings further down the line, it remains relatively rare due to high upfront costs, according to Voltz.

PSEG Long Island said only 88 home geothermal systems were installed across Long Island last year. But that's up from 64 in 2021, 55 in 2020 and 76 in 2019, and there are signs that geothermal is slowly growing more common. The utility does not install geothermal systems, but tracks installations because they say that these systems lead to energy savings that impact the electric grid.

The Inflation Reduction Act extended the geothermal tax credit for 10 years on the residential side — and Fink said the industry has seen interest surge for both residential and commercial parties since the IRA passed.

"I feel that geothermal has reached the point that we no longer need to explain and justify the technology," Fink said, adding that it has reached an acceptance that it works. He predicted geothermal installations will skyrocket in the near future."

Others who went with geothermal and paid high upfront costs said they are reaping the benefits.

Matthew Dwyer, 65, a Nassau County employee, and Kathleen Dwyer, a retired Hofstra University administrator, rebuilt their Long Beach house after it was destroyed in Superstorm Sandy.

"I researched solar and geothermal," Matthew Dwyer said. "They made sense to me economically and from a civic responsibility perspective. Solar is obvious. Geothermal is so underutilized."

Low maintenance, environmentally friendly, protected from the elements

It's so refreshing not to give utilities big, fat checks every month.

— Matthew Dwyer

Felakos and Sieczka like the relief of a system that, once installed, is usually low cost and low maintenance.

"It just does its thing," Felakos said. "We don't have to do anything."

Once geothermal is installed, it typically requires little maintenance. Beague is glad to no longer have maintenance costs for central air, with compressors exposed to the rigors of weather. "Weather-wise, the units are protected better in the house," he said.

Although many residents with geothermal believe they benefit economically, they often also cite the environment. "We were renovating the house," Felakos said. "Probably the primary reason was we could afford to do it for the environment. It would, over time, pay for itself."

Gontcharenko said monthly electric bills for their house are usually around $15, covering the basic service charge. According to PSEG Long Island, the basic service charge is $0.48 per day, or $14.40 for a 30 day month.

"There are no maintenance costs," he said. "Four times a year, I clean the removable filter with a hose. That's it."

The American Institute of Architects' Long Island Chapter in 2018 gave an award to Bouler Pluger Architects for their work on Gontcharenko's house due to "outstanding use of residential sustainable design."

Voltz said it's not only good for the environment, but also quiet for the homeowner. "You don't have that box outside with a fan going," he said. "It's water moving through underground pipes."

Still, equipment, stored everywhere from basements to garages, is indoors and not entirely silent. "I don't find it to be too noisy. We used to hear the air conditioner," Felakos said. "Part of the unit is in the attic. We hear it come on, but it's not substantial."

Dwyer, meanwhile, is happy with both solar and geothermal, nearly eliminating monthly expenses that he once took for granted.

"It's so refreshing not to give utilities big, fat checks every month," he said.