Economic feasibility:
Geothermal energy systems have been recognized as being one of the most energy efficient heating and cooling systems in the world. Many countries have started to notice to potential of geothermal energy as a means of producing a portion of the entire countries power needs. In places like Iceland and New Zealand which sit along active margins make them great locations for utilizing geothermal energy.
Today there are at least 21 countries that have developed geothermal power production or have been attempting to develop the resource.
[14]The overall cost effectiveness of using geothermal energy depends tremendously on the following factors:
- Resource Type (steam or hot water)
- Resource Temperature
- Reservoir Productivity
- Powerplant Size
- Powerplant Type (dry, flash, binary, hybrid)
- Environmental Regulations
- Cost of Capital (initial investment)
- Cost of Labor
The first three factors influence the amount of wells that have to be drilled based on the plants intended capacity. Based on the typical cost for production wells one well ranges from $100-400/kW. The next three factors influence the initial capital cost of the operation and the last two factors deal with the cost of keeping a plant operational.
Capital and Operations & Maintenance costs for small Binary Geothermal Plants. [15]
Even though capital costs might be higher than other forms of energy production, geothermal energy does not require any fuel and as a result it is immune to fluctuations in the cost of fuel.
When looking at residential applications the initial capital cost on average for a 10kW (3 ton) thermal capacity system is around $14,000 USD. On average this initial investment cost can be recuperated within 2-10 years were as large commercial systems will recuperate initial investment costs within 1-5 years of installation.
Comparison to Other Methods of Energy Production:
How does geothermal energy stack up against other methods of energy production?
[16]Geothermal has been ranked as the least expensive method for energy production by Credit Suisse with a maxiumum cost of $59 per MWh and a minimum of $22 per MWh. Coal by comparison has a minimum cost of $46 per MWh more than twice that of geothermal energy. Looking at it from a consumer standpoint when buying electricity geothermal energy cost about 3.6 cents per kWh were as coal cost roughly 5.5 cents per kWh. This makes geothermal a entising alternative to other non-renewable methods of energy production.
Longevity:
The average lifespan of a geothermal heat pumps is around 25-30 years with good upkeep and maintenance. The loop fields generally have warranties of around 25-50 years and the piping itself should last for at least 50-200 years.
Incentives:
In the United States the Government offers tax incentives for the use of renewable energy systems like geothermal energy. Incentives are offered at both the state and federal level. For the state of Alaska there is a state rebate program that offers a $10,000 incentive for any energy efficient home improvements made. There are also several property tax exemptions available for people who utilize renewable energy systems.