Actual Installation Cost For a Dandelion Geothermal System [2021]

9 min read · Last updated November 26, 2021

After purchasing our home in the summer of 2020, we got a lot more interested in energy efficiency. After tackling the easy fixes like LED lightbulbs, we began looking at renewable energy options to be more environmentally friendly and to lower our heating and cooling bills. We decided to have a geothermal heating and cooling system installed. I did a ton of research and eventually selected Dandelion Energy to install our system. We signed the contract at the end of October 2020. The system was completely installed by the end of January 2021.

This post is NOT sponsored by Dandelion Energy, but I will receive a commission if you get a geothermal heating and cooling system after clicking a link here. You will also receive a $500 rebate on your installation.

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During my research, I had a hard time finding stories from homeowners who had installed geothermal systems. I also couldn't find Dandelion Energy reviews from actual customers. I did find one video through Dandelion's website and one other website that provided details about the homeowner's changes in energy bills, but I couldn't find enough about the installation process or a real example of a geothermal installation cost. I decided to share my story to help others who are considering geothermal heat pumps.

Total installation costs for a 5-ton geothermal heat pump system

I'll get right to it and share our total geothermal installation costs.

Total geothermal cost including installation with ground source heat pump and closed loop system
Description	Cost
5-ton packaged geothermal system	$44,929.00
Aeroseal (duct sealing)	$2,850.00
Electrical panel upgrade	$3,000.00
Total Installation Cost	$50,779.00
Cash Discount	-$1,750.00
Custom Discount	-$2,000.00
ConEd Incentive	-$13,651.50
ConEd HeatSmart bonus rebate	-$3,000.00
ConEd Desuperheater incentive	-$150.00
Total Discounts and Incentives	-$20,551.50
Total Out of Pocket Cost	$30,227.50
Estimated Federal Tax Rebate	-$10,000.00
Estimated Total Geothermal System Cost	$20,227.50

We paid the upfront cost in 2 installments. We should get another $10,000 back when we file our federal taxes. I will update this post after we file to share more about that process. There are both state and federal tax incentives for installing geothermal systems.

What's included?

5-ton packaged geothermal system

$44,929.00

This is the price for the entire geothermal heat pump system. Here's what's included according to our sales contract:

Recover all refrigerant from existing air conditioner (if applicable)
Remove existing furnace air handler and outdoor air conditioner condenser unit
Cap but do not remove the existing fuel line and existing flue
Install Dandelion heat pump in the same location as existing heating equipment
Install buffer tank for domestic hot water preheating next to heat pump or the existing water heater, within 75 feet
Install expansion tank if a check valve or pressure regulator is present on the cold water supply pipe
Install thermostat in the same location as the existing thermostat
Provide all ground loop drilling and plumbing connections
Connect new supply and return plenums to the home’s existing ductwork
Provide 240V electrical circuits and breakers
Auxiliary heat will be provided as needed based on the system design

The included heat pump is listed as a 5-ton AAON WVA-060 (1.0) Packaged vertical water source heat pump.

Aeroseal (duct sealing)

$2,850.00

Our current ductwork was pretty old and needed a little pick-me-up. The sealing improved the efficiency by a pretty big margin. It took a whole day, but it was interesting to watch. They sealed off all of the registers and blew glue into the ducts to help seal up any small holes. Here's the official description:

Block off all registers and isolate HVAC equipment for one (1) individual air handler.
Protect personal property with coverings and air scrubber.
Connect Aeroseal equipment to ductwork and seal to Dandelion Design and Installation Standards.
Confirm successful sealing with pressure test.
Reconnect HVAC equipment and return system to normal operation.

This is an add-on service that we needed due to the age and state of our ducts. It's also something we could have said no to.

Electrical panel upgrade

$3,000.00

Our house only had 100 amp electrical service, so we had to upgrade our panel to accommodate the auxiliary heating system. We ended up getting a brand new line from the street, so I'm happy knowing the system is in good shape.

Their contract lists these included services:

Install new service entrance conductors from point of attachment (overhead utility connection) including new service head.
Install new 200A meter pan.
Install 200A main breaker panel box.
Install new grounding protection and label breakers as needed.
DOES NOT include trenching for underground utility service.
DOES NOT include any utility fees.
DOES NOT include any sheetrock repair.

Dandelion's electrician was really great. He was really friendly and knowledgeable, and he had obviously worked with ConEd a lot previously. We did not have any additional charges, and everything was done and approved quickly and professionaly.

I assume most homes already have 200A service, but other older homes may also need this upgrade.

Cash Discount

-$1,750.00

We got this discount since we paid for the system installation in full. Dandelion Energy does offer financing for their services, but we chose not to use it.

Custom Discount

-$2,000.00

I actually don't remember what this discount was for. It's only listed on our contract as Custom Discount.

ConEd Incentive

-$13,651.50

This is the geothermal incentive provided by our power company, ConEd. I was surprised to find out that this was paid directly to Dandelion by ConEd and we didn't have to do anything at all to claim it.

This is obviously a local thing, and I found out recently that ConEd has one of the best geothermal incentives in the country. I believe many of the state incentives for geothermal heating and cooling systems are provided directly through utility companies. Check with your own power company to see what kind of incentives they offer.

ConEd HeatSmart bonus rebate

-$3,000.00

This additional incentive from ConEd was a limited time offer. Our sales rep at Dandelion actually got in touch to let me know exactly when we would need to sign the contract by to take advantage of this offer. As I mentioned above, check your local power company's website to see what kind of geothermal incentives they offer.

ConEd Desuperheater incentive

-$150.00

ConEd adds this small bonus for any geothermal installation that includes a desuperheater. The desuperheater is included in the total geothermal system installation cost above.

Dandelion lists the minimum features for the desuperheater in the contract as:

Electric resistance water heater
Minimum rated storage volume of 50 gallons
Minimum energy factor (EF) of 0.92 or greater
Minimum 6-year limited warranty for the tank and component parts

What is a desuperheater?

A geothermal desuperheater is a secondary water heater that is installed along with your geothermal heat pump. Any heat generated by the heat pump during the heating or cooling processes is used to warm water in the desuperheater water tank. That water is then used as the intake for your regular water heater, so it never has to heat water all the way from cold. It saves on energy costs for heating water.

What is the average cost of installing a geothermal heat pump?

The estimates for a geothermal heat pump system cost on Home Advisor are a little all over the place. They give a range of $3,704 and $17,424 with an average of $10,455. But then they go on to say "A ground source heat pump can cost as much as $30,000 to install or more." They aren't clear whether those prices are before or after incentives. They also don't say what size heat pump is included which varies based on your home's size.

Dandelion Energy's website is a little more clear, "Dandelion Geothermal starts at just about $18,000 – $25,000 for a 3 – 5 ton heat pump system which includes all installation costs after state and federal incentives are applied."

That falls right in line with what we ended up paying. Our system with a 5 ton geothermal heat pump cost just over $20,000 after all incentives. Our $30,000 upfront cost should be offset by an estimated $10,000 in federal incentives.

What kind of tax incentives are available?

Federal geothermal tax credit

According to EnergyStar.gov, the renewable energy tax credits for fuel cells, small wind turbines, and geothermal heat pumps now feature a gradual step down in the credit value:

26% for systems placed in service after 12/31/2019 and before 01/01/2023
22% for systems placed in service after 12/31/2022 and before 01/01/2024

We expect to see that 26% incentive when we file taxes this year. I'm still a little unclear as to whether we can take 26% of the total system cost ($50,779.00) or just the out-of-pocket cost ($30,227.50). As I said above, I will update this article when that happens to share what the experience is like.

How do geothermal heat pumps affect your utility bills?

We haven't had our system installed for a whole year yet, and we don't have years of data to compare because we had our geothermal system installed during our first winter in the house. However, from what we've seen so far, the monthly energy savings look pretty great.

Geothermal heating cost

The geothermal heating system doesn't use any natural gas or oil at all. Our previous furnace was natural gas. We still have a natural gas stove and water heater, so that's not completely off our utility bill yet. Geothermal heat pumps leverage sustainable energy from the ground. The heat pump then uses electricity to warm the air to the desired temperature above what the ground provides (~55F). Geothermal heat generation does require more electricity than a gas or oil heater, so you will see an increase in electrical usage, but obviously a HUGE decrease in oil or gas cost.

I'll write a more in-depth article about our energy bills soon, but for now, let's look at a direct comparison of our most recent bill with the same time last year.

Natural Gas vs Geothermal Heating Cost Comparison
	Oct 1 - Nov 2 2020		Oct 1 - Nov 2 2021
	Usage	Cost	Usage	Cost	Savings
Natural gas usage	90 therms	$155.24	15 therms	$57.51	$97.73
Electrical usage	867 kWh	$190.51	1129 kWh	$229.30	-$38.79
Total Savings					$58.94

It's worth noting that fluctuating heating fuel costs will alter these differences even more. In 2020, our natural gas was billed at 31 cents per therm. In 2021, that was up to 66 cents per therm. The delivery charges went up significantly as well. If we had paid for natural gas at the higher rate this year, our gas bill would have been over $215, so really, we saved more than just $60.

Geothermal cooling cost

Geothermal is more energy efficient at cooling your home than a standard AC unit, so your electric bills should go down a decent amount during the summer months.

Here is a year-over-year comparison for July after we had our geothermal system installed. The cooling costs were definitely reduced with geothermal.

Standard AC vs Geothermal Cooling Cost Comparison
	Jul 6 - Aug 3 2020		Jul 6 - Aug 4 2021
	Usage	Cost	Usage	Cost	Savings
Electrical usage	1537 kWh	$349.84	885 kWh	$212.98	$136.86
Total Savings					$136.86

Note that the 2021 bill is for 1 day longer. I have not compared average temperatures or looked at all of the cost differences for electricity supply and delivery charges. On average though, we have noticed a good downward trend in our energy bills.

Obviously these numbers can be skewed by other things in our home; I did adjust out the wattage of some computers we only had running during one year, but I didn't not alter any numbers for other appliances. We probably have more energy efficient lightbulbs this year compared to last, but we also have another television, an additional refrigerator and freezer in our basement, etc.

I plan to run a full year of comparisons including other changes we've made in the home as soon as I can.

How do you maintain a geothermal heat pump?

Just like any forced-air heating or cooling system, geothermal heating and cooling systems have air filters that need to be changed. Dandelion Energy recommends changing them every 3 to 6 months.

The whole system needs a basic inspection every 5 years. Standard HVAC systems generally require yearly maintenance, so this should be an additional cost savings.

The ground loops are underground, so they don't require any maintenance.

How long does a geothermal heat pump last?

Geothermal heat pumps last significantly longer than conventional HVAC systems. They generally last 20 to 25 years. Standard AC units last only 10 to 15 years, and furnaces 15 to 20 years.

This brings an added savings as well. Over a 25 year period, you would have to replace an AC unit twice and a furnace at least once. Compare that to just one installation of a geothermal heat pump system.

The ground loop system is expected to last 50 to 100 years.

How much does a geothermal heat pump cost to replace?

A geothermal heat pump costs more to replace than a standard furnace, but don't forget that it replaces your AC unit as well.

On average, 5-ton geothermal pumps range from $5,000 to $7,500. Compare that to a gas furnace at $1,500 to $3,000 and an AC unit at $1,750 to $2,250. These costs are all estimates for unit only, no installation.

That means over a 25 year period, you would have to install 2 or 3 AC units and 2 furnaces, but only 1 geothermal heat pump. Going with the minimum costs for each unit and only 2 AC units, that would cost $6,000 for AC and furnaces and $5,000 for the heat pump. That would be 4 installations for the standard HVAC equipment and only one for the heat pump, which I assume would be less.

What is the pay-off period for a geothermal heat pump?

This will vary from household to household based on electricity and heating fuel costs, the age of the current AC and heater, the type and state of ductwork, and any other necessary home upgrades.

For our household, we calculate our pay-off period to be under 10 years. Our total cost after all incentives and tax credits is right around $20,000.

We needed a new AC unit ASAP. The national average cost to replace an AC unit is around $5,500, but we are in Westchester, NY where everything is more expensive. Let's assume that would be closer to $6,500.

We expect to save an average of $50 per month on utility bills. That adds up to $600 per year.

This is an assumption again, but I think inspection costs for the system will be about the same as an inspection for a standard HVAC system, but they happen only every 5 years. That is a savings of $200 a year 4 out of every 5 years.

Our furnace was nearing it's end of useful life. We anticipated needing a new one in about 5 years. It looks like replacing a gas furnace runs from $3,443 - $7,338 for New York. Again, due to our location, I would assume we would be on the higher end of that, so let's say $7,000.

Geothermal System Pay-off Period
Year	Energy Savings	Equipment Savings	Maintenance Savings	Year Savings	Total Savings
1	$600	$6,500	$200	$7,300	$7,300
2	$600	$0	$200	$800	$8,100
3	$600	$0	$200	$800	$8,900
4	$600	$0	$200	$800	$9,700
5	$600	$0	$0	$600	$10,300
6	$600	$7,000	$200	$7,800	$18,100
7	$600	$0	$200	$800	$18,900
8	$600	$0	$200	$800	$19,700
9	$600	$0	$200	$800	$20,500

Overall, we are extremely happy with our decision to install a geothermal heating and cooling system. We are excited to be more energy efficient while saving some money in the long run. It just makes so much more sense to me to leverage sustainable energy rather than burn fossil fuels to heat and cool our home. The installation experience was pleasant overall.

It's so nice not having our big air conditioning unit right next to our patio, and the heat pump equipment in the basement has pretty much the same footprint as before with less maintenance.

We had a great overall experience with Dandelion Energy despite a few minor issues at the end. I would definitely recommend a geothermal heating and cooling system!