Geothermal energy gets new mass-market push on Long Island

Geothermal energy systems got a new push into the mass market as startup Dandelion Energy this week formally launched a regional office and warehouse in Bay Shore to bring efficient, emissions-free heating and cooling to homes across the region.

But are Long Islanders ready for systems that require pipes 350 feet into the ground and cost upward of $45,000? 

Company executives at a ribbon cutting in Bay Shore Tuesday said new state incentives, low-interest loans and energy savings can help the new systems pay for themselves in a period of seven years or less, particularly with soaring fuel prices. 

“We think this can be a really big market for us — it’s the right time,” said Michael Sachse, chief executive of Dandelion, which has operations in Westchester County, Albany, the Boston region, and in Hartford.

Sachse said the company’s aim is to do for geothermal what local installers have done to advance solar power across the region over the past two decades.

Dandelion, with investors that include Bill Gates’ Breakthrough Energy, an investor-led fund that boosts new clean-energy companies, proposes a “one-stop shop,” for equipment, drilling and installation.

Sachse said he sees the more than 1 million Long Island homes that heat with natural gas or oil as his primary customers.

Dandelion is focusing on homes that use ducted forced-air heating, not those with water-based baseboard heating, and at least initially won't be selling to commercial customers. 

As of this week, 35 Long Islanders had signed contracts for Dandelion installations, Sachse said.

Geothermal systems use the earth's steady temperature of around 55 degrees to help heat and cool homes, with pipes traveling deep into the ground to transfer heat away from homes in summer and into them in winter.

The systems are two to three times more efficient and quieter than air-source heat pump systems, which draw outside air at fluctuating temperatures for the same heating and cooling process, officials said.

But the costs for geothermal are higher.

Bob Smith of East Hampton said he signed a contract a month ago for a new Dandelion system he's putting into his renovated home at a price tag of about $46,000.

But the systems, unlike heat pumps, are eligible for a federal investment tax credit of 26% of their overall cost, and a new state tax credit of up to $5,000. The federal investment tax credit is scheduled to drop to 22% next year.

PSEG Long Island rebates also will cut thousands of dollars off the cost, reducing Smith's overall cost to around half of that $46,000. He said he expects the system to pay for itself in five to seven years. 

Most customers will finance between $22,000 and $25,000 of the cost, after rebates and incentives, Sachse said, with payments of about $150 a month at 4.99% financing over 20 years.

Mike Voltz, director of PSEG’s renewable energy and efficiency programs, said rebates for average system can range up to $8,000 from the utility.

Voltz said while electric costs will go up, customers’ overall energy bills will decline and become more stable, as he said they have at his home equipped with geothermal heating and cooling.

“Geothermal is the most efficient way you can heat and cool your home, bar none,” said Voltz. “It’s environmentally beneficial, it’s clean and it’s operating costs are extremely low, particularly considering recent increases in natural gas and fuel oil prices.”

Installing the systems requires local building permits, and involves about a week of drilling, a day to install and connect underground pipes and two days of in-home work, Sachse said.

The systems are closed loop, meaning water and a special alcohol-based solution don’t enter the ground or aquifer.

Sachse said the systems are virtually maintenance free, with ground pipes expected to last 50 years and in-home equipment 15 to 20 years.

But the history of geothermal on Long Island has been spotty.

Newsday reported in 2019 that a company called Sherman Industry that had touted mass-market geothermal systems filed for bankruptcy, leaving more than 125 customers who'd paid some $8 million in deposits for systems in the lurch.

Court filings in 2014 accused the company’s former executives of lacking the “knowledge and ability required to properly install geothermal systems.” The executives denied wrongdoing.

By Mark Harrington

mark.harrington@newsday.comMHarringtonNews

Mark Harrington, a Newsday reporter since 1999, covers energy, wineries, Indian affairs and fisheries.