Faced with replacing a 35-year old oil furnace in their Ellicott City home, Baltimore Symphony musicians Robert Barney and his wife, Julie Parcells, decided on a geothermal heating and cooling system with a hefty price tag of $30,000.
But between tax credits from Howard County, the state and federal governments and hoped-for energy savings, they expect to recoup their cost in five years.
"I'm just really happy" with the system, Barney said. "I don't have anything burning in the basement. It's quiet, and I think oil is going to go way higher."
Homeowners like Barney and Parcells are fueling a local and national surge in the purchase of both solar and geothermal home energy units, according to government and industry officials.
Howard's energy incentive credit program will, for the first time, hit its $250,000 annual spending ceiling, up from $160,000 in credits in fiscal 2009, said Linda Watts, chief of the county Bureau of Revenue. The county allows $5,000 tax credits for geothermal or whole-house solar, and $1,500 for solar hot water. Howard already has 23 applicants waiting for fiscal 2011, Watts said, though that period doesn't start until next July.
The trend is being repeated across the Baltimore area and nationally, officials said.
Maryland granted $3.25 million worth of credits for 530 solar installations and 202 geothermal systems in the fiscal year just ended, said Department of Energy spokeswoman Christina Twomey. Funding this fiscal year will depend on federal stimulus money and Maryland's Strategic Energy Investment Funds, Twomey said. Maryland is one of 10 states participating in a Regional Greenhouse Gas Initiative in which they sell CO2 emission allowances to utility companies and use the proceeds to lower carbon emissions.
Harford County officials said the number of tax credit recipients climbed from 25 to 60 since last year. Anne Arundel has 33 applicants for fiscal 2010, which began July 1, up from 10 last year, said Walter Tolliver, the county's tax billing manager. Prince George's County just started a credit program, but in Montgomery County, which began its program one year ago, 55 people have qualified for $250,000 in credits, said Eric Coffman, the program administrator. Montgomery just approved a loan program to help people buy renewable energy systems. The loan stays with the property as a lien until it is paid off, Coffman said.
Baltimore City and Carroll County offer no tax credits, and Baltimore County offers them only for new homes, said Don Mohler, a county spokesman.
Daniel Ellis, president of the nation's largest manufacturer of geothermal equipment, said he believes that recent huge and sudden energy market fluctuations have convinced more people they'd be more secure with an independent heating and cooling system.
"People believe that anything that can go up that easily and go down that easily can go up again," he said, referring to last summer's spike in oil prices.
"All it takes is one storm in the Gulf" of Mexico to disrupt the oil market, said Ellis, president of Climate Master Inc., of Oklahoma.
Ellis said his business doubled from 2005 to last year, even before federal tax credits became available. Now, with no ceiling on federal credits, which cover up to 30 percent of the cost of whole-house geothermal or solar systems, the industry was up 40 percent in the first four months of this year, he said.
Solar systems are prospering too, according to Monique Hanis, spokeswoman for the Solar Energy Industry Association in Washington. Whole-house solar electric systems increased 81 percent in 2008, and smaller solar hot-water system installations went up 50 percent, she said. The federal credit program has given the industry a higher profile, she said. "More people are aware of it."
Maryland companies similarly report increased business. John Love, whose Severn company installed the Barney-Parcells' system last winter, said that despite the recession, he bought a new truck for his business and hired two more workers to keep up.
"In two years we've increased our residential business 50 percent. It's pretty dramatic," he said.
Barney said Love's firm hired a drilling firm to install a 450-foot-deep well for the geothermal pipes filled with an alcohol-based solution near their 2,300-square-foot home, built in 1972.
The major part of the system is invisible under the grass of the couple's verdant quarter-acre front lawn. In the basement, two water tanks sit side by side, attached by pipes and metal ducts to the fan and heat pump portion of the system. Love said the unit produces hot water in the first tank as a byproduct, and that is used to cut the cost of the household hot water tank by up to 75 percent. Since the rancher had baseboard heat, Love installed metal air ducts in the basement ceiling, joining them with ducts installed for central air conditioning.
"This area is perfect for geothermal," Barney said. Geothermal uses the year-round underground temperature of about 50 degrees to provide heat in winter and cooling in summer. The heat also helps warm hot water in two tanks in the basement.
Instead of paying $4,000 a year for oil, plus $6,000 for a new furnace, Barney and Parcells now pay only for electricity to run the system and the house's lights and appliances, but the monthly bills are significantly lower, Barney said.
Another Howard couple haven't had a trouble-free ride, however.
Bill and Lisa DeLong, who have lived in their West Friendship home for 22 years, paid $48,000 for a geothermal system in their 2,700-square-foot home on one and a quarter acres.
But the system's computer malfunctioned over the first several months, resulting in duplicate energy costs for a while. Those issues were solved, and the system is now running smoothly, he said.
Based on three months of trouble-free operation, he now thinks the system could take more than two decades to pay for itself, unless energy costs rise significantly. Still, he expects to recoup much of the purchase price whenever he and his wife sell their home.
"It is an amazing system. It's incredibly quiet," he said.