Walking the Walk
An Interview with GEO President and CEO Douglas A. Dougherty, September 2012
Describe your prior career involvement with geothermal heat pumps.
In 1986, I joined Soyland Power Cooperative, a generation and transmission cooperative in Illinois. My job in marketing development led me to geothermal heat pumps (GHPs). At the time, there was no stocking distributorship in the state for any geothermal manufacturer—no dealer network and no training. I developed a for-profit business plan for a coop subsidiary that filled that void, which I oversaw from 1987 to 1995. We created a robust dealer network, and a successful market for GHPs in Illinois through the electric coop distribution system. I worked in executive positions for state government and ran a major industry association since then, but my heart remained with geothermal. When the GEO Board of Directors asked me if I would like to head up a new national association for GHPs, I jumped at the opportunity. I just wanted to be a part of it again, and was happy at the chance to be reengaged with the industry.
How does your prior association and political experience fit with GEO?
For the past 13 years, I ran a state association representing the telecommunications industry, and I think it tracks very well with my new position. My responsibilities as a state association executive included addressing public policy issues, testifying before legislative committees, and working at the cabinet level with the governor’s office and agencies. Geothermal is a different industry, and GEO has a national focus—but the legislative process is the same. I am comfortable working with legislators and legislative staff, and I know how to shape the issues and present them to legislators. That includes describing our industry; what our needs and desires are; and how public policy can be shaped to help our industry create jobs.
What are your thoughts about GHPs and our Nation’s energy policy?
The GHP industry clearly has a role to play in this country’s will to become more self-sustaining and environmentally friendly, and less dependent on foreign oil. It’s important to know that 40% of all the energy consumed in this country is for the thermal loads of buildings. We can significantly impact that energy dependency simply by installing GHPs. That’s a really big deal—especially considering how small a part of the heating and air conditioning market that we are right now. If the industry can expand to a million units annually over the next few years, it’s a tremendous opportunity that will create 100s of thousands of new, well-paid jobs. It’s exciting to represent an industry that can have such a significant impact on this country’s energy policy and use. That includes reducing the country’s carbon footprint; cutting peak electricity loads of utilities; and lightening strains on the transmission grid.
What lifestyle changes have you made since taking your position with GEO last March?
When you are in a position like mine, I believe you should “Walk the Walk.” I have made lifestyle decisions to be more energy efficient and reduce my personal carbon footprint. To replace my prior corporate vehicle, I bought a hybrid car (my new license plate reads “MOREGEO”), and I’ve retrofitted my home with a GHP system. It has cost me money, but the payback is there. My car will pay for itself over time, and I predict that my geothermal system will pay for itself in less than five years—probably closer to four. It makes sense, and I can tell my story as an example of how people can become more energy efficient and save money with GHPs.
Describe your home GHP heating and cooling system retrofit and its economics.
My first consideration was, did I have enough land area for the geothermal loop boreholes? Based on load calculations, I needed a 5.5-ton unit, so con-versely 5 boreholes 180-ft. deep for 1,800 ft. of 3/4″ loop pipe. We decided we could fit them in my side yard. The second consideration was get-ting a drilling rig in to do the job. There were land-scaping, trees, and my neighbor’s yard to consider, but we designed the system so that it could be done installed with minimal disturbance. Inside the house, we determined that most existing ductwork could be used, with a fairly significant redesign where it met my old furnace. This was probably the biggest “unknown” going into the project—how much of the existing ductwork we could use. Another big consideration was getting the GHP unit into my basement. We managed to get it down my basement steps with a lot of blood, sweat and tears. The job was completed in late-July, and the unit is working perfectly. My total cost for the loop, the unit and the installation is approximately $18,000. After a $5,400 federal income tax credit and a rebate of $2500 from my local municipal electric utility, my out-of-pocket cost will be around $10,000. I should save a little more than $2,000 per year on my heating and cooling costs, so I am predicting payback on a $10,000 outlay will be between four and five years. But If I include replacement for my 27-year old standard HVAC system that I would have had to do anyway, my payback is immediate.
What are your immediate and future goals for GEO?
We have a number of barriers to GHP industry growth, so GEO’s approach must be multi-faceted. Barriers include everything from consumer awareness to high upfront costs and the need for qualified dealers and installers. A very important consideration for growing our industry is the federal income tax credit for residential and commercial installations. We must retain it through 2016, and possibly extend it beyond that date. The industry would be on life support without it, which would also mean the loss of tens of thousands of jobs. Another challenge is encouraging investor-owned utilities (IOUs) to support the technology more than they have. We have many examples of electric coops being big proponents of GHPs, but IOUs have lagged in their support, financing and promotion of GHP technologies. From the federal government standpoint, we have made a lot of headway with a lot of agencies. Notwithstanding our challenges with the U.S. Department of Energy and its lack of a GHP Technology Program, we’ve seen many installations of GHP systems by the General Services Administration, the Department of Education, the Environmental Protection Agency, the National Park Service, and the Department of Defense. We’re very excited about government applications of commercial geothermal heat pump technology. We have to keep pushing agencies to employ GHPs, and I think that will have a “snowball” effect, not just for government but in private-sector applications as well. Five years from now, I’d like to see GEO impacting energy policy for GHPs at the state level. This goes hand-in-hand with our effort to nudge the IOUs into promoting the technology, which is more a focus for state-level activities. My ultimate goal for GEO is to have people working for us at the state capitol-level across the country.
What is your vision for the future of the U.S. Geothermal Heat Pump Industry?
I think that when the economy comes back, and we are building homes and commercial buildings at a greater pace, the GHP industry is poised to capture a much greater share of the heating and cooling market. I think we can go from 5% to 30% in only a few years. The only thing holding us back right now is the lack of new home and commercial construction. When building picks up again, the high adoption rate we currently see for retrofits will cascade over into the new building market. I’m very excited about the potential for growth in the GHP market, and I’m sure we are going to get there. It’s a great industry and a great technology, and I am very happy to be representing it. There is no downside to GHPs. There is no negative aspect. Everything about this industry is positive—job creation, renewable energy, energy efficiency—it’s all good, it’s all positive. Who wouldn’t want to represent an industry like that?