If you’re a district official and your new or existing schools need new heating or cooling systems, there’s never been a better time to explore investing in sustainable, affordable geothermal energy.
The reason? There are big, but still not widely appreciated, opportunities under the 2022 Inflation Reduction Act that provide federal tax credits to help pay for clean energy infrastructure. While certain grant programs like the Department of Education’s Renew America’s Schools Program are getting close to having 100% of their available funding committed, the Inflation Reduction Act tax credits will continue to make geothermal a compelling option for schools that meet certain criteria.
Geothermal energy systems use the soil, bedrock and groundwater under your school. Drilled wells allow heat exchange with the underground.
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For heating, we extract a small amount of heat from underground, concentrate it and move that to help warm buildings to comfortable temperatures. For cooling, we remove heat from the buildings and exchange it with the cool underground.
Geothermal or ground source heat pumps provide heating and cooling using the ground as a heat sink, absorbing excess heat when the aboveground temperatures are warmer, and as a heat source when aboveground temperatures are cooler.
Using the steady, constant temperature of the earth as a source for providing heat to buildings in cold months and cooling in warm months can save owners 25% to 40% compared to the cost of traditional HVAC systems.
For a school that will be in place for many years, educating generations of children and teens, the economic timeframe of geothermal energy is compelling: After a payback period that can take a few years, the system can take a giant bite out of school districts’ annual heating and cooling costs for decades to come.
According to the U.S. Treasury department, school districts that meet various “underlying requirements” can claim clean energy tax credits, including investment tax credits and production tax credits for many purposes beyond geothermal energy. These include buying electric school buses and other clean energy vehicles and chargers, installing rooftop solar panels, or installing a microgrid with solar and energy storage.
While these tax credits historically have been available only to for-profit businesses and certain other entities, the Inflation Reduction Act expanded their availability to K12 public schools and other tax-exempt and governmental entities through what are known as “elective pay” or “direct pay” provisions.
Because of the much longer lifetime of geothermal systems compared to conventional heating/cooling systems, solar panels and electric vehicles, geothermal is an especially compelling use for the available tax credits, potentially maximizing overall financial benefits for school districts compared to other kinds of clean energy investments.
If your existing boiler/furnace and electric-powered AC still have decades of life in them, keeping them operational for peak use to reduce the size of the geothermal wellfield you need to drill can make the economics even more favorable. By installing a hybrid geothermal system, you avoid the big expense of drilling extra wells to meet a peak demand for heating or cooling that may occur only five or 10 days per year.
Finally, it’s important to go through the exercise of thinking decades into the future about where you might need or want to expand your school buildings, adding a new wing, gymnasium, theater or other facility. Your successors in the school district will be glad if they never have to bear the expense—and hassle—of removing a geothermal wellfield from an area that had long been identified as usable for expansion.
Geothermal systems run solely using electricity, which often can be generated by renewable sources such as solar and wind. And if you can get a federal subsidy to the initial capital cost, it can be a slam dunk: Long-term, reliable and sustainable geothermal heating and cooling for your school buildings at an affordable price.
