Save your building energy and money: Here's the drill on geothermal wells

By Virginia K. Smith  | October 29, 2014 - 1:59PM

Slowly but surely, green technology is making its way into NYC homes. In particular, geothermal wells have been gaining traction in buildings like Brighton Beach's eco-friendly Bright 'N Green complex, this ambitiously renovated Prospect Heights townhouse, and even the notorious—but eco-friendly!—home at 277 First Street in Park Slope, which spent a full decade under construction. Besides being a boon to the environment, geothermal wells can be a major money-saver, harnessing heating from underground to efficiently heat and cool both private homes and apartment buildings.

However, renovations—and the transition to newer technology—aren't always smooth. Last month, reports started circulating that Gramercy residents were incensed over noisy geothermal drilling on socialite Lauren Santo Domingo's townhouse, which jammed up neighborhood traffic and even took down a few trees. If you're interested in diving in (or drilling down) without upsetting the neighbors or breaking the bank, here's what you need to know:

What is a geothermal well?

First things first, the so-called "well" isn't a well in the traditional sense—you won't be at risk of falling down it, for one thing—but a series of underground pipes and heat pumps that circulate water from the ground to regulate the temperature in an apartment or office building, or a single-family house. At a certain point below the surface, the ground keeps a natural temperature of 55 degrees, and the system can adjust your building's temperature according to that natural baseline, explains David Magid, the renewable energy director for YouSaveGreen, a New York-based green energy contractor.

Will it work for my building?

Geothermal wells are more common (and far easier to install) in new construction buildings, where construction can be planned around them ahead of time. They're also more popular with business or apartment buildings than individual houses—but theoretically can be added anywhere. If you're trying to talk your condo or co-op board into geothermal—and they aren't sufficiently impressed by the savings—consider the case of the American Institute of Architects, which convinced the New York State Energy and Research and Development Authority (NYSERDA) to pitch in $85,000 toward the $100,000 cost of its wells.

Also, you should be prepared to have a lot of staff on site, whatever the cost. "Depending on the project, it may be able to get completed by a geothermal installer," says Magid, who works for one such firm, "or may require multiple parties such as engineering teams, a geologist, and other contractors."

"It can be very noisy and disruptive," he adds. "Proper planning and expectations prior to construction make for a smoother project, and it's important to find a correct spot for drilling, stay clear of trees," etc. 

For a project of this magnitude, you (or your building) will want to make sure the contractor has liability coverage, says apartment insurance broker Jeff Schneider of Gotham Brokerage, and have it stipulated in writing that you will be added as an "additional insured" to their policy. "In this scenario, suits against you for damage would be covered under the [general contractor's] policy," says Schneider. That way, if the neighbors get fed up and sue (it's been known to happen), you'll be covered, and have that much more time to bask in your newly cheap energy bills.​​

What's the installation like?

As you'd expect, setting up an underground labyrinth of pipes requires intensive drilling, and Magid tells us that a "closed loop" system—by far the most popular geothermal option for New York buildings—needs to go around 400 or 500 feet underground, depending on the project. 

Installing them in the city, where there are endless approvals and permits to procure, and a lot of underground interference (sewers, electrical systems, etc.), is much more complex than in less dense areas. As such, geothermals have been slow to catch on in NYC. "In the suburbs, the whole process could take just three months, but in New York City, it could be between one and three years," says Magid. One source of comfort: actual drilling only takes two to five days if planned correctly, Magid says, and the rest of the time is all in the planning phases or installation of systems inside the building itself. 

How much will I spend? And save?

To be sure, geothermal wells aren't for the faint of heart, but the savings can be big. With drastically reduced energy bills—the Times estimates that they can cut energy costs anywhere from 30 to 60 percent—expect the system to pay for itself in five to eight years, Magid says. This translates to lower bills for homeowners, more cash in your condo or co-op board's coffers (and potentially lower maintenance or common charges), and in the case of Bright 'N Green, no energy bills for residents. 

Still, the wells don't come cheap: they cost between $45,000 and $150,000, depending on the size of the home, Magid estimates. "The best way to describe the cost of geothermal is that all of the equipment cost and interior work is relatively the same cost, and standard equipment," he explains. "The exterior drilling can be compared to paying for your next five years' worth of your building's fuel in bulk." Still, with tax credits factored in, the Times has written that an investment can be recouped in as little as two years. ​

And make no mistake, you will get tax credits: NYSERDA offers incentives for wells in new and existing buildings. The organization also has "on-bill" loans with a low interest rate of 3.49 percent and a guarantee that your payments won't exceed your energy savings, so you don't have to wait to enjoy the cost-cutting benefits. 

What about repairs?

The exterior loops (the ones that are outdoors, but underground) last around 150 years, meaning you won't have to delve into costly repairs anytime soon (or ever).​ Even the equipment set up within your building comes with a 10-year warranty, and Magid says you can expect it to need service every 20 years or so.


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