Overview

For the past four years, the U.S. Geothermal Heat Pump (GHP) industry has seen double-digit growth each year, fueled in part by the soaring energy prices for traditional fuels as well as the desire for reliable and clean energy alternatives. In 2007, total geothermal heat pump shipments surged 36 percent to 86,396 units (Table 4.1), while capacity shipped rose 19 percent to 291,300 tons (Table 4.2). While 2007 capacity growth was substantial, it was below growth in 2006, which was 53 percent. Total rated capacity of geothermal heat pumps shipped in 2006 was 245,603 tons, compared to 160,402 tons in 2005 (Table 4.2 and Figure 4.1). Despite costing more initially than traditional heating and cooling systems, the high efficiency and ongoing cost-saving potential of GHP has resulted in GHP becoming the heating and cooling system of choice for many consumers.

Figure 4.1 Geothermal Heat Pump Shipments, 2002-2007

Source: Energy Information Administration (EIA), Form EIA-902, "Annual Geothermal Heat Pump Manufacturers Survey." Chart data.

Industry Status

In 2007, there were about 17 known domestic manufacturers of geothermal heat pumps, including brand-name manufacturers[1] that shipped geothermal heat pumps manufactured by others under contract. Almost all manufacturers have their geothermal heat pumps tested and certified by the Air Conditioning, Heating, and Refrigeration Institute (AHRI) for their cooling capacities and their operating efficiencies. In general, geothermal heat pumps are rated based on one of the four standards by the AHRI. These standards are ARI-320 (ARI/ISO 13256-1 Water-Source Heat Pumps), ARI-325 (ARI/ISO 13256-1 Ground Water-Source Heat Pumps), ARI-330 (ARI/ISO 13256-1 Ground-Source Heat Pumps), and ARI-870 (Direct Geoexchange Heat Pumps).[2]

Out of 86,369 GHP units shipped in 2007, a total of 8,112 were ARI-320 rated, 66,863 were ARI-325 or ARI-330 rated, and 809 were ARI-870 rated. ARI-rated shipments increased to 75,784 units in 2007, while the number of other non-rated units shipped more than doubled to 10,612 in 2007 (Table 4.1).

The manufacturers reporting GHP shipments in 2007 also reported being involved in one or more of the following geothermal heat pump-related activities (Table 4.15):

• A total of 12 manufacturers were involved in the design of geothermal heat pumps or systems,
• 10 were developing prototype geothermal heat pumps only,
• 4 were developing prototype systems, which include pumps and other components,
• 12 were involved in wholesale distribution,
• 4 were involved in retail distribution,
• 3 were offering installation of their GHP products, and
• 2 were involved in the manufacture of system components.

Of the 17 manufacturers active in 2007, 6 are planning to introduce new ARI-320 rated water-source heat pumps, 6 are planning new ARI-325 rated ground water-source heat pumps, 8 are planning to introduce new ARI-330 rated ground source closed-loop heat pumps, and 1 is expecting to introduce new ARI-870 rated direct geoexchange heat pumps in 2008 (Table 4.13). These statistics indicate that increasing public demand for alternative energy systems has created business opportunities for the geothermal heating and cooling industry.

In 2007, direct employment in the geothermal heat pump manufacturer industry accounted for 1,219 person-years[3] (Table 4.14). Of the 17 manufacturers, 8 had 90 percent or more of their total company-wide revenues in geothermal heat pump-related activities, 1 had 50 to 89 percent, 4 had 10 to 49 percent, and 4 manufacturers had less than 10 percent (Table 4.16).

Direct use geothermal energy (e.g., low-temperature water from conventional geothermal sources for crop drying) and energy consumed by GHP both increased in 2007. GHP energy consumption increased 15 percent in 2007 to an estimated 32 trillion Btu, while direct use inched upward from 9.1 to 9.4 trillion Btu (Table 4.17).[4]

Geothermal Heat Pump Shipments

The total rated capacity of geothermal heat pumps shipped in 2007 was 291,300 tons, approximately 19 percent more than the 2006 shipments of 245,603 tons (Table 4.2). The average unit size shipped in 2007 was 3.37 tons, compared to an average unit size of 3.86 tons in 2006 (Table 4.1 and Table 4.2).

In 2007, water-source heat pump (ARI-320 rated) shipments totaled 15,667 tons, which is almost 50 percent less than water-source heat pump shipments in 2006 (Figure 4.2 and Table 4.2). The decrease occurred because one manufacturer classified its equipment differently in 2007 than in 2006.

Shipments of ground water-source heat pumps and ground-source heat pumps (ARI-325/330 rated) continued to dominate the GHP industry in 2007, accounting for 73 percent of the total shipments (Figure 4.2 and Table 4.2). The shipments of ARI-325 and ARI-330 were 212,739 tons, a 37 percent increase from the corresponding 2006 shipments.

Shipments of direct geoexchange heat pump (ARI-870 Rated) totaled 3,412 tons in 2007 (Figure 4.2 and Table 4.2).

Despite a doubling of unit sales, capacity of non-ARI rated heat pump shipments in 2007 rose only slightly more than 1 percent (59,482 tons) over 2006 shipments (Figure 4.2 and Table 4.2).

Figure 4.2 Geothermal Heat Pump Shipments by Type, 2003-2007

Source: Energy Information Administration (EIA), Form EIA-902, "Annual Geothermal Heat Pump Manufacturers Survey." Chart data.

Total Revenue and Average Price

The total revenue for shipments of geothermal thermal heat pumps was approximately $219 million in 2007 (Table 4.5). Revenue includes charges for cooperative advertising and warranties, but does not include excise taxes and the cost of freight or transportation.

The average price (dollars per ton) for water-source heat pumps (ARI-320 rated) was $735.60, ground water-source heat pumps and ground-source heat pumps (ARI-325/330 rated) was $781.08, direct geoexchange heat pumps (ARI-870 rated) was $1,002.36, and other non-ARI rated heat pumps was $636.50 (Table 4.5).

Domestic Shipments

As prices for electricity, natural gas and heating oil continue to rise, geothermal heat pumps for heating and cooling are becoming increasingly viable. During 2007, domestic shipments continued to surge rapidly, with rated capacity totaling 238,870 tons, an 11 percent increase from 215,166 tons in 2006 (Table 4.6).

During 2007, GHP shipments to domestic wholesale distributors, the largest customer category, totaled 130,275 tons or 55 percent of the domestic market share. Shipments to the second-largest customer category, installers, amounted to 102,241 tons, or 43 percent of the domestic market share (Table 4.10).

In 2007, domestic shipments to the residential sector accounted for 110,115 tons or 46 percent of the domestic market. Of the domestic shipments to the residential sector, 2 percent were ARI-320 rated, 89 percent were ARI-325/330 rated, 3 percent were ARI-870 rated, and 6 percent were non-ARI rated (Table 4.11). The commercial sector was the largest domestic market in the United States in 2007, accounting for 122,699 tons or more than 51 percent of the domestic market share. Ten percent of the purchases for this sector were ARI-320 rated GHP, more than 68 percent ARI-325/330 rated GHP, less than 0.2 percent ARI-870 rated GHP, and about 21 percent non-ARI rated GHP. The industrial sector, with less than 3 percent of domestic shipments, was the smallest domestic market.

Complete Systems

In general, geothermal heating/cooling systems provide space heating and cooling, as well as water heating. A complete geothermal heating/cooling system is defined as a unit with all the necessary functional components, except for installation materials. The system includes three principal components (listed below) and a device called “desuperheaters” which can be added to provide hot water when the system is providing heat or air conditioning.

• Geothermal earth connection subsystem: Using the earth as the heat source and heat sink, this subsystem consists of a series of pipes which are commonly called a “loop.” They carry a fluid used to connect the geothermal system's heat pump to the earth near the building to be conditioned.
• Geothermal heat pump subsystem: An electric heat pump that exchanges heat between the fluid and the air that conditions the building.
• Geothermal heat distribution subsystem: An air-delivery system that delivers the conditioned air to the building.

Of the manufacturers reporting 2007 shipments, the majority of these manufacturers sell only geothermal heat pump subsystems (geothermal heat pump units), and only two manufacturers reported selling complete systems. These systems accounted for 623 tons , or 0.2 percent of total GHP shipped in 2007 (Table 4.12).

Origin of Shipments

During the year 2007, there were no GHP import shipments reported. All GHP units (a total of 291,300 tons) were manufactured in the United States. The top five manufacturing states were: Florida, Indiana, Michigan, Oklahoma, and Texas, with 54 percent (157,958 tons) of the total shipped from Indiana and Oklahoma (Table 4.8).

Destination of Shipments

Exports of GHP shipments totaled 52,430 tons in 2007. The export market accounted for 18 percent of total shipments and was dominated by sales to Canada, with 61 percent (32,104 tons) of total exports (Table 4.7).

In 2007, a total of 238,870 tons of domestic GHP shipments went to all 50 States and the District of Columbia (Table 4.6). About 52 percent of domestic GHP shipments (124,152 tons) went to ten States: Florida, Illinois, Indiana, Kentucky, Maryland, New York, Ohio, Oklahoma, Pennsylvania, and Virginia, with 15 percent (36,470 tons) of the total shipments sent to Illinois and New York.

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