Building a Unified Front
New Geothermal Exchange Organization Board Chairman
Steve Smith Talks about His Vision for the Industry—and GEO
Where do geothermal heat pumps fit into the national energy picture?
The benefits of geothermal are its efficiency and reduced need for oil, propane and natural gas for home heating, and for electricity generated with coal, natural gas and nuclear energy. The best way to reduce energy use is through efficiency. Geothermal gives us that option, with more efficient use of energy for heating and cooling buildings, which are our biggest energy consumers. In doing so, geothermal can help us work through the soft economy with good jobs; build our industry so it can stand on its own; and help with national goals for renewable energy use and energy independence.
What is the biggest challenge to increased use of geothermal heat pumps?
I believe the biggest challenge to selling more residential and commercial geothermal systems is lack of consumer and building owner education. It’s unfortunate there are so many heating and cooling systems being replaced or retrofitted—and new homes and buildings under construction—where geothermal isn’t even considered. That’s a product of poor education on our part of homeowners, builders, developers and of the architecture and engineering community.
We have very talented people in this industry who can give a very honest assessment of the benefits of geothermal vs. conventional heating and cooling systems in many different situations, especially for commercial applications. If they were given the opportunity to help every building and homeowner understand the pros and cons of geothermal over conventional systems, I truly believe our industry would explode well beyond our current 1-2% market share to 10% and possibly even 20%.
How should the geothermal heat pump industry meet that challenge?
The industry needs to emphasize marketing. There are too many times when homeowners simply don’t even know about the geothermal option. A homeowner calls a contractor wanting a heating and cooling system replaced or for a new home. Either the contractor is shy about bringing it up, or doesn’t think the person is interested in a geothermal system. But these are great sales opportunities.
If they take the time to educate the homeowner on how geothermal heat pumps work and how they save money—to serve their “client” as a “consultant”—they will build trust that lands them the job. When I buy something, those who gain my trust will get my business. They don’t have to be the cheapest. These “lap leads” are lying right there within the contractor’s reach, even if a customer didn’t originally call or ask for a geothermal system.
Many in the heating, ventilation and air-conditioning (HVAC) industry are “doers.” They consider themselves technicians who install and service the equipment, but feel inadequate at selling. The fact is, someone who knows geothermal technically can best explain how it works with enthusiasm and sell it with passion. It’s confidence in selling that needs to be built among our contractors, so sales training is very important in meeting the challenge of client education, marketing—and more installations.
Contractors should discuss all the benefits of geothermal heat pumps, because they don’t know what pushes a customer’s “hot” button. For some, it’s “renewable,” or “ecologically sound.” And for others it might be that geothermal saves money on energy bills, or that it’s comfortable and not visible like an air source heat pump. You never know what will make a client light up. That’s how you present value to a potential customer, plus emphasizing that it really doesn’t cost more to own geothermal—it costs less in the long run.
Discuss GEO’s work in Washington with Congress and with the Administration.
To me, public policy is all about what happens at the local level for our members, but we have to begin at the federal level. The residential and commercial tax credits are the biggest thing right now. Without the tax credit—thanks to GEO—this industry would have had a very hard time during the recession. Do I believe we need them forever? Absolutely not. But we do need the tax credits through 2020, with a phase-out after that. Let the economy build; let it get solid footing. We didn’t have tax credits before 2008, and we won’t need them later. However, we need a planned extension to 2020 followed by a gradual, planned phase-out.
GEO staff is doing a great job working with our advocacy team in Washington looking after the tax credits, and on promoting their extension. Other important issues include extensions to business tax breaks important to the business, and making sure that geothermal heat pumps are included in energy efficiency legislation. They’re also working to include geothermal heat pumps as an option for utilities to comply with an upcoming U.S. Environmental Protection Agency rulemaking on carbon pollution from coal-fired power plants.
What about GEO’s work at the local, state and regional levels?
GEO’s not just about lobbying for the industry in Washington. The geothermal heat pump industry’s future lies at the local level, even as we maintain our presence and seat at the table at the national level. Regional or state geothermal associations have a very important role in helping this industry grow.
GEO is working hard with them to forge a unified force from the ground up to move this industry forward. GEO staff is doing a fantastic job of assisting those organizations with local issues touching every-thing from energy efficiency rules, renewable energy standards, to regulation of geothermal drilling and ground loop installations. It all comes back to effective education—of legislators, local leaders and regulators.
Even with its talent and capabilities, GEO is now only touching the surface of what can ultimately be accomplished at the state and local levels, because at the moment we have limited manpower and finances. But more important than our financial needs is our membership numbers. The more members we have, the more power we gain in public forums. With greater membership, GEO will show strength in numbers in various states, which sends a powerful message to locally and nationally elected officials.
What is the importance of GEO to the geothermal heat pump industry?
GEO gives my company and the industry a “stage” that we have never had before. Col-lectively, as a group of manufacturers and trade associates, that gives us a seat at the table, and a platform from which we can tout the benefits of geothermal heating and cool-ing systems for the country and the world.
Other renewables, like solar and wind, offer a lot of benefits to the environment, and they are given due credit by the government, the news media and the public. But geothermal heating and cooling systems, which work 24/7, 365 days per year, aren’t given the credit they deserve in reducing the energy consumption of homes and buildings. Geothermal is not recognized as it should be for the positive environmental role it plays in cutting the need for additional power plants and transmission lines, and for reducing load on the electric grid.
GEO gives the geothermal industry the opportunity to speak with one voice. We have a big job to educate lawmakers and decision-makers at federal and state agencies about the benefits of geothermal instead of getting lost in the shuffle. With GEO, we speak through the Board of Directors, our staff and our advocacy team in Washington, DC, as well as through our support of state geothermal groups and allied organizations. We also work with other industry organizations to help coordinate our activities, because it’s more effective than everybody running around doing their own thing.
Why should a company involved with geothermal heat pumps join GEO?
I’ve been in the industry for 30 years, so I’m a veteran. It’s often hard for a business to support something that they don’t see a return from on a daily basis. All the different businesses involved in geothermal heat pumps—architects, engineers, distributors, dealers, contractors, drillers—have to understand that we need to speak with one voice if we are to knock down our market and institutional barriers.
The geothermal heat pump industry at the current time is splintered. For us to grow beyond our 1-2% market share of HVAC demand, we must speak with one voice as a unified group of geothermal industry stakeholders, locked arm-in-arm. Even though we may have some disagreements among ourselves over what is being said or done, we have to march together under common principles. Opposing views are easily overcome with a common goal that is far bigger than all of us individually. We believe in strong advocacy, outreach, partnerships, training and R&D. And I truly believe that voice is offered by GEO. Any other solution is far behind it.
I urge all the players in the geothermal heat pump market to become GEO members and participate in our agenda for the industry. Remember that the little guy standing alone has no voice, but if he is a member of a unified group like GEO, he gains strength and clarifies his message. We need to preserve our tax credits, gain recognition by government and other industries, and deal with harmful regulations at the local level. Supporting GEO is very important for all the reasons I have noted, but it is even more important for the years ahead, to ensure continued growth and a prosperous future for the geothermal heat pump industry.
What’s your vision for the future of GEO and the industry?
I look forward to my new leadership role with GEO over the next two years. My focus as Chairman of GEO will be on bringing together the unified front I’ve discussed; to help grow our membership; and to build local, regional and state support to win support for our issues. I can promise our members and the industry that we will continue working hard to knock down the market and institutional barriers to increased use of geothermal heat pumps—and in the process gain increasing awareness of and respect for our technology.