With solar becoming more popular, we get asked a lot which makes more sense? Solar or Geothermal? Both alternatives harness the power of the sun. Solar captures the energy of the sun by exciting electrons in silicon and capturing that energy in wires. Geothermal takes advantage of the solar heat stored in the ground, which is 50-55 degrees year round just a few feet below the surface. Here are some important factors to consider when making your decision.
Where do you live?
Although the technology has advanced in recent years, one thing is still necessary for solar panels to work efficiently – the sun. In predominantly rainy or cloudy climates, solar panels will lose efficiency and may provide unpredictable service. Climate will also dictate whether geothermal is a better option as the farther North you move, the more heat is needed during the winters. Because geothermal energy provides up to 500% efficiency compared to gas or oil heating, it’s highly recommended over solar power in colder areas. Coincidentally the farther South you live, the more sunny days you’ll have per year, which means you’ll both need less heat and have plenty of sun available which helps lean towards solar panels.
Here in southern Indiana we typically find that of the total cost to heat and cool your home, heating is about 65% with cooling about 35%. Therefore, geothermal would be a more viable option than solar.
There’s no two ways around it, the installation of a geothermal system is more expensive, especially in retrofits. A horizontal loop geothermal system will need about 400-600 feet of pipe for every ton of heating and cooling energy needed, and although the loops are interwoven, that’s still a lot of excavating. Plus, vertical loops can plunge to depths upwards of 400 feet.
In 2018, most homeowners are paying between $2.71 and $3.57 per watt for solar installation, and the average installed cost of solar panels before tax credits is $18,840.
Whats the Payback?
For geothermal, payback periods can be as short as four years. Solar payback periods in this region are often 2-3 times longer, or more.
In the Southwestern United States payback periods between the two technologies tend to converge more closely. The extra days of sunlight make the panels more efficient, and the heating bills are also much smaller.
The best way to calculate payback periods is by contacting a qualified contractor. Once you determine what your “out of pocket” cost is, after the 30% tax credit and any available rebates, you can determine what your payback is by using this simple (and roughly accurate) way to calculate it: