Michigan has had success recently with district and campus-scale installations of ground source heat pumps for facility heating and cooling. While still considered nascent compared to other sources of renewable energy, geothermal energy has significant potential, and market adoption of this technology could accelerate if policy, education and technical training headwinds are addressed. Come listen to three interesting and diverse perspectives of these issues from panelists who are in the trenches.

1. Michigan Energy Forum:
Drawing Energy from the
Netherworld - Geothermal
March 7, 2013
© Ann Arbor SPARK

2. Road to Economic Health
GeoUtility
Renewable & Efficient
Economically Sound
Eases the Path to Net Zero

3. The Economics of Geo
• $$$
• Saves 60-70% Energy Cost
• Maintenance drops by 60-80%
• Environmental
• Global warming emissions down by 70%
• Solar and wind needs drop by 60-70%
making Net Zero a real possibility

4. Utility District-wide
Notice the Scalability Systems:
A Sample District Geothermal System
Start with one here!
Perhaps another one here!

5. Geo-Thermal Utilities District-wide Systems:
A Sample District Geothermal System
As homes sign up! Geothermal system grows!

6. Geo-Thermal UtilitDistrict-wide Systems:
A Sample District Geothermal System
Full distributed system over time!

7. Geo-Thermal Utilities & District-wide Systems:
A Sample District Geothermal System

8. LONG TERM
Cost per unit goes down
Distributed loads are highly cost effective

9. Why Install a Utility System
• The DOE strongly advises Towns and
Cities to install GeoUtilities.
• Makes Geo available at low cost to all
• Lowers operational cost for business
and residential.
• Gas, oil and coal dollars stay and build
the community.

10. DETROIT
Let’s Look at a City – the Potential Impact

11. Background Information * Potential
Occupied Homes: 336,428
Probable energy bills (HVAC, DHW), annually per home $ 600
Total residential annual cost $ 201,856,800
Commercial, Institutional, etc $ 250,000,000
Total energy dollars leaving the City each year $ 402,000,000
Sixty percent of those monies should stay in Detroit with Geo
That represents a lower cost of living, several thousand higher paying jobs, and
a big step toward full energy independence.
Cost: potentially zero with revenue private funding, An investment of Billions

12. XXXX Corporate Center
Geothermal Utility Supporting:
Heating cooling system
Domestic hot water

13. Costs to Consider
Geothermal Savings
 The GeoUtility field  No gas piping
has an added cost  Roof penetrations and
flue pipes largely
 Geothermal bldg disappear
equipment is similar  Avoids a central
in cost to domestic hot water
conventional system and related
gas/electric maintenance
 GeoUtility income is
 There are offsetting separate income stream
incentives from
 Installation costs
government agencies recovered by system
and from utilities owner

14. Areas to be included
Space categories: Common Spaces:
 Small business center  First floor lobby
 Large business center  1st floor common area
 Health Plex  2nd floor common area
 Bldg Mgmt office
 3rd floor common area
 XX Units size A
 4th floor common area
 XX Units size B
 XX Units size C  5th floor common area
 XX Units size D  6th floor common area
 XX Units size E

15. Inclusions
Geothermal field design
and installation
Mechanical heating,
cooling, DHW system with
related:
1. Controls
2. Piping
3. Hot water tanks
4. Electrical wiring from local
disconnects by others
5. Permits
6. As built prints
7. Installation management
8. Performance warranties

16. XXXX Corporate Center
Geothermal Utility Pro Forma (Preliminary estimate)
Assumptions: Cardio 1140 Sq Ft 1
Business Center 2470 Sq Ft 1
Office 2470 Sq Ft 1
Events 3610 Sq Ft 1
Units, avg 1392 Sq Ft 92
Commons area 56832 Sq Ft
Total area 194,586 Sq Ft
Geothermal field tonnage 194.6
Geothermal system cost $ 813,369
Each average unit HVAC tons 2.0
GeoUtility billing / ton / month: residential units
Residential units 2.0 tons $ 27.50 $ 55.00
Cardio 1.5 tons $ 27.50 $ 41.25
Bus Center 2.5 tons $ 27.50 $ 68.75
Office 2.5 tons $ 27.50 $ 68.75
Events 7.5 tons $ 27.50 $ 206.25
Commons 30.0 tons $ 27.50 $ 825.00
Total annual revenue $ 75,240
Each buyer gets a one time tax credit of: $ 3,600
Each buyer gets a DTE credit of: TBD
System Owner:
Gross invest cost (less reduced construction cost) $ 813,369
Connection fee per owner $ 1,900
First year connection fees $ 174,800
Net investment cost $ 638,569
Annual gross revenue, yr one $ 75,240
Annual maintenance cost $ 11,286
Net first year revenue $ 63,954
Add Tax ded, energy tax credits, etc

17. XXXX Corporate Center - GeoUtility System
Ten Year Pro Forma
Revenue Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Yr 8 Yr 9 Yr 10 10 Yr Tot
Gross $ 75,240 $ 76,745 $ 78,280 $ 79,845 $ 81,442 $ 83,071 $ 84,732 $ 86,427 $ 88,156 $ 89,919
Maint $ 11,286 $ 11,512 $ 11,742 $ 11,977 $ 12,216 $ 12,461 $ 12,710 $ 12,964 $ 13,223 $ 13,488
Net $ 63,954 $ 65,233 $ 66,538 $ 67,868 $ 69,226 $ 70,610 $ 72,023 $ 73,463 $ 74,932 $ 76,431 $700,278
Cummulative $ 63,954 $129,187 $195,725 $263,593 $332,819 $403,430 $475,452 $548,915 $623,848 $700,278
Rate inflation 2.00%
Annual depreciation assuming 20 year straight line $ 40,668
Tax credit estimated at 10%, first year only $ 81,337 If apts, much higher
Each condo buyer receives approx tax credit of $ 4,000

18. Why ? ?
• Supports grants and incentives
• The GeoUtility becomes a separate revenue
center
• The facility is a green energy complex
• LEED points if desired
• Lower purchase cost for buyers or tenants
• Lower utility bills
• Very low maintenance costs

19. Michigan Business and
Industries
Incredibly, Michigan is poised to be America’s foremost
Technology provider:
 Geothermal Innovations
– Jim Hardin; jhardin@geoii.com
– Lilli Hardin; lhardin@geoii.com
Geo Net Zero for training and installation certification
– lawrence@geonetzero.com
US Farathane heat exchange material development and
manufacture in partnership with Geo Innovations
JaanTechnologies, automated installation equipment.
– sbaird@jaantek.com

20. GEOTHERMAL ACCREDITED
INSTALLER TRAINING &
APPRENTICESHIP PROGRAM
• New level of reliable installations
• International Ground Source Heat Pump (IGSHPA)
-Accredited Installer
-HDPE Fusion Hands-On Procedures
-IGSHPA Membership
-Required for many public projects
• DOL Apprenticeship Program (Pending in Washington, DC
Office)
-Michigan ? ?
-Gii4 Heat Exchanger exclusive training
-Potential Employer Benefits using Apprentices

21. Manufacturing
• Made in the USA
• Material: PE-100
(HDPE)
• Manufactured: 20-
foot lengths
• End Cap and
Header
• Assembly joined
using traditional
heat fusion process
(IGSHPA and ASTM
standards)

24. Happenings
• In the NE USA a 650 unit complex using a central geo field
• In Ohio the second large Citywide GeoUtilityTM is moving forward
• In MI a 17 story residential system with GeoUtilityTM is progressing
• In MI the largest ever geo system is in fast track analysis stage
• In Ohio a University is looking at a campus wide GeoUtilityTM
• In the NE USA a 3000 unit complex is now in review stage

25. Strategic Energy Solutions Presents:
Kevin Bouchey, CGD, LEED AP
Proven Track Record:
At Strategic Energy Solutions, we have
two of only nine Certified Geothermal
Designers (CGDs) in the State of
Michigan. We have been designing &
implementing geoexchange HVAC
systems since 1998, and have
successfully completed numerous projects.
• Designed 52 Projects
• Installed 34 Projects
• Performed 45 Feasibility
Studies

26. The Economics of Good Design
• Payback is in the hands of the
engineer
• Very competitive first cost
• Minimize annual operating costs
• Fees paid to qualified engineers
and consultants can easily pay
for themselves in reduced
construction cost and operating
costs

27. Geothermal Economics – Simple Payback
Example Project: 60,000 Sq. Ft. Commercial Office Space
• Premium Cost GHX = $6.00/SF
• Energy Savings = $0.60/SF/Year
Payback:
• 10 Years Energy Savings Only
• 6.2 Years 10% Federal Tax Credit
• 5.8 Years EPAct Tax Deduction @ $0.60/SF (up to $1.80/SF)
• 1-3 Years 5-Year MACRS Depreciation

28. Thank You
If you have any questions or
comments, please feel free to
contact Kevin at:
KBouchey@sesnet.com
248-399-1900 x211

29. Next Michigan Energy Forum:
Energy Policy
April 4, 2013
© Ann Arbor SPARK