Maryland SB 652 Comments

Maryland SB 652 Renewable Energy Portfolio Standard Renewable Energy Credits – Geothermal Heating & Cooling

Senate Finance Committee

March 6, 2012

Mr. Chairman, and Members of the Committee,

The Geothermal Exchange Organization (GEO) firmly believes that Geothermal Heat Pumps (GHPs) and the thermal energy that they harvest from the earth should be included under the State of Maryland’s Renewable Energy Portfolio Standard (REPS). That mandate requires covered electricity retailers to supply a specified share of their electricity sales from qualifying clean energy resources.

Buildings consume 73% of the nation’s electricity. Every building in America sits on the ground, and the ground is always cooler than outdoor air in summer and warmer in winter. Conventional equipment for controlling the temperature and humidity of a building, or supplying hot water and fresh outdoor air to breathe, must exchange energy (or heat) with the building’s outdoor environment.

GHP equipment that exchanges energy with the ground instead of outdoor air provides the same amenities (space conditioning and hot water), but consumes far less non-renewable energy (electricity and fossil fuels) while doing so. With current 30% (for residential buildings) and 10% (for commercial buildings) federal tax credits, state financial assistance like that offered by Maryland and various support programs offered by utilities, payback (cost recovery) for the consumer (depending on the structure) can be in some cases be immediate, and certainly no longer than 3-5 years. 

GHPs should be included in any REPS. A GHP is a distributed technology that captures a thermal form of renewable energy from the Earth, and it is available everywhere. Under a CES, utilities earn one credit for every megawatt-hour (MWh) of retail electricity sales from approved technologies. They can do so for less cost than any of those sources by providing building owners with access to GHP systems that exchange heat from the ground to buildings. GHPs use the only renewable energy resource that is available at every building’s point of use, on demand, that cannot be depleted, and is affordable in all 50 states.

Heat pumps used in GHP systems efficiently move heat back and forth between the building and ground as needed through underground piping called ground heat exchangers. Although heat pumps consume electrical energy, they move 3 to 5 times more energy between buildings and the ground than they consume while doing so. Ground heat exchangers outlive the building and many generations of heat pumps, and are akin to other utility infrastructure (poles and wires, underground natural gas piping).

With GHPs, the distributed, thermal renewable energy resource utilized is already at point of use, compared to the majority of wind, solar and other renewable generation resources that are in remote locations and require enormous hidden transmission investments to bring to market. With GHPs, the distributed, thermal renewable energy resource is available on demand, unlike wind and solar which are intermittent and may not be available when needed, requiring enormous hidden power flow management investments to bring them to market.

GHPs are the least-cost means of earning REPS credits, and they are proven to avoid more retail electricity sales during utility peak load periods. In other words, utilities that harness this distributed, thermal renewable energy resource at a scale large enough to earn REPS credits will also improve their annual load factors. Higher annual load factors provide a downward pressure on electricity prices. GHPs are the only REPS technology with the potential to reduce electricity prices everywhere in the near-term. Inclusion of GHPs in a REPS would go a long way toward mitigating electricity price impacts of solar, wind and other costly technologies within an entire REPS portfolio.  A review of existing studies also shows that broader use of GHPs can avoid millions of MWh of retail electricity sales and attendant pollution.

Measurement and verification of the GHP contribution can be accomplished in a relatively straightforward manner. The U.S. Department of Energy could be directed to develop the methodology, and vet it at the American Society of Heating, Refrigeration and Air-Conditioning Engineers (ASHRAE) and among utilities.

Again, GEO urges inclusion of thermal technologies – specifically Geothermal Heat Pumps – as an accepted technology available for credits under Maryland’s Renewable Energy Standard mandate.


Douglas A. Dougherty – President and CEO
GEO – The Geothermal Exchange Organization