While the 2011 AHR Expo at the Las Vegas Convention Center offered numerous educational sessions, AHR attendees and HARDI members packed the session, Commercial Ground Loop Water Source Heat Pump Systems. The presenter, Alan Niles, commercial sales manager, WaterFurnace International, reviewed the basic design and installation of a commercial ground loop water source heat pump system and discussed the impact of key project-specific variables that affect ground loop design.

Federal Tax Incentives

Niles spoke to a standing-room-only crowd about the benefits and misconceptions of commercial ground loop water source heat pump systems. One of the key benefits that he outlined were various federal tax incentives available to consumers. The Energy Property Tax Credit allows a credit of 10 percent of the total system cost with no limit, or a 10 percent grant that is available in lieu of the tax credit. Consumers can combine with either the solar and wind tax credits; this program remains available until 2017.

Consumers also can take advantage of several other tax deductions. The Energy Efficient Commercial Building Property tax deduction remains effective until 2014. This is a deduction of up to $1.80 per square foot of the entire structure. To qualify, the building envelope, indoor lighting and HVAC and hot water system need upgrading and must meet or exceed 50 percent energy savings, compared to the minimum ASHRAE 90.1-2001 design.

If the consumer only upgrades the HVAC system, and it meets or exceeds 16.66 percent energy savings, then a tax deduction of $0.60 per square foot of the entire structure applies.

An additional deduction, ‘Accelerated Depreciation,’ allows for 100 percent of the first-year depreciation, if the system's installation occurs between Oct. 10, 2010, and Jan. 1, 2012. If it's not installed in that time frame, the consumer still gets to take 50 percent of the first-year depreciation, with the balance on a five-year depreciation, beginning in the first year of service, as long as it's installed the following year, 2013.

Niles explained that wholesalers really need to research this information and become familiar with it because manufacturers may not know or don't fully explain all the tax incentives available. [Ed. Note. It also is wise to have an accountant who is familiar with the diverse and complicated IRS deductions related to energy-efficient buildings.]

Hidden Costs

Niles also discussed the three most important topics to understand when starting a commercial ground loop design. To design a commercial ground loop, one must examine the following:

  • from the ground — the thermal conductivity of the soil.

  • from the building — the monthly or daily heating and cooling loads.

  • from the equipment — the energy efficiency of the water source heat pumps.

Niles demonstrated what happens when someone designs a commercial ground loop without knowing the correct thermal conductivity of the soil. He pointed to a geothermal company that guessed the thermal conductivity was 1.0btuh/ft./ °F. This data determined the number of boreholes per square feet for the ground loop. It pushed the project beyond its budget, and the customer decided they no longer wanted a geothermal solution. When WaterFurnace came in and designed it with the correct thermal conductivity (instead of 1.0btuh/ft./ °F, it was 1.44btuh/ft./ °F), it reduced the ground loop size by 9,708 square feet. The design called for almost 10 miles of drilling and the original design was off by almost two miles. This illustrates a major problem of guessing at thermal conductivity, instead of conducting careful calculations.

The second major hidden cost when dealing with commercial ground loop systems is guessing the efficiency of heat pumps. Niles explained that if someone guessed that the ground loop runs at a peak temperature of 90 degrees, then the heat pump unit would only run at 17 EER. If, however, one examines the performance of the ground loop every month, for 30 years, the statistics may show that the peak temperature never exceeded 80 degrees. That means the unit would be running at 19.4 EER instead of 17 EER. By studying the temperature of the water loop more closely throughout the year, the results show the average temperature was actually 70 degrees, with the water source heat pump running at 22.7 EER. That's a 35 percent difference, which occurred because someone assumed that if the ground loop is set for 90 degrees, then it will always run at 90 degrees. When the design of the ground loop runs closer to the ground temperature, the heat pump will operate at a higher efficiency rate.

The third hidden cost when dealing with commercial ground loop systems is grouting. Minimizing the borehole diameter is key to reducing grout usage, which is a significant cost to the overall installation. Niles explained to the group that if a borehole is 5 inches in diameter, it needs .9 gallons of grout for each linear foot of borehole to fill the hole back up. If the contractor makes a 6-inch-diameter borehole, the amount of grout needed would increase by 49 percent. It would take 1.36 gallons of grout per linear foot to fill the hole. That is a major cost that is avoidable by taking the proper steps when designing ground loop systems.

In order to properly design a commercial ground loop system, Niles recommended using a computer design program. “Working with a ground loop design company that actually has access to this software helps eliminate the issue of doing estimations and guessing on the job,” Niles said. He also recommended teaming up with a company that is a member of the International Ground Source Heat Pump Association, which has dedicated itself to advancing geothermal heat pump technology since 1987.

In Other News

Also discussed at the HARDI meeting during the 2011 AHR Expo was a new direction for the Plan & Spec Committee, led by chair, Bill Shaw. Shaw and his son, Spencer Shaw, will now co-chair the committee. Both Bill and Spencer, along with several other HARDI members who own Plan & Spec companies, will spearhead the committee's session at the HARDI annual Fall Conference, Oct. 23-26, 2011, at the Grand Wailea Resort and Wailea Beach Marriot in Maui, HI. The Plan & Spec Committee will answer questions from wholesalers and manufacturers about what plan & spec is, how one gets in the plan & spec market, what are the key items to be successful in the plan & spec market, plus much more. Stay tuned for more information in future issues of HVACR Distribution Business magazine.


Kate Kelly is an associate editor with Contracting Business magazine. Contact her at 216/931-9755 or kate.kelly@penton.com.