There has never been a better time to sell geothermal equipment.

The federal government is still providing a 30% tax credit on the installation of geothermal systems, and many states have additional incentives available. Customers are thinking “green,” and they’re concerned about the rising cost of energy. Add in the fact that geothermal systems typically reduce homeowners’ utility bills by 50% to 70%, and it’s no surprise that geothermal is growing.

Still, no piece of equipment sells itself, and your knowledge is a crucial component of helping customers make the choice to invest in a geothermal system. The first-cost price is unquestionably higher than that of a conventional system and your ability to educate homeowners on the true, life-cycle cost of the equipment is key.

Know the Incentives in Your Area
Incentives make a huge difference in the geothermal market. At Parrish Services, our market area includes parts of Maryland and Virginia. Homeowners in both states receive the benefit of the federal 30% tax credit, but Maryland has additional incentives that make geothermal an easier sell. Homeowners generally will not know about the incentives, so it’s important that you do.

Remember, the tax credit does two things: It gives people a financial incentive, and it also raises awareness of geothermal. When your customers ask about it, be sure you have the answers.

Explain That ‘Financing’ is Not a Dirty Word
Most homeowners are going to have to obtain financing for their geothermal system purchase. However, with the economy still sluggish, many people are trying to be frugal and careful with their money. They’re afraid to hear the f-word. Explain to them that financing is simply how things get done.

Most people don’t buy a house or a car with cash. A heating and cooling system is a big investment and shouldn’t be viewed any differently than a house or car. Homeowners actually financed their current heating and cooling system: it was part of the price of the house, so in effect they’re financing their current system for the term of their mortgage. So it makes perfect sense to obtain 10-or 15-year financing on a system that’s going to last 20 to 25 years, all the while providing energy savings.

Having the right funding mechanism is key. Typically, any type of secured funding, such as a second mortgage or a home equity line of credit, is going to have the best rate, and it’s often tax deductible.

Run the Numbers
When I run all of the numbers for people I usually find them breaking even on their geothermal system investment after about seven years. Many people want to take the price of the system and say, “My energy savings are 50%, I’m spending $500 month on utilities, so I’m going to divide the cost of the geothermal system by $250/month and see what my payback number is.” But that’s not a reasonable way to do it. In reality, the savings increase every year in which energy prices rise.

When you actually run all the numbers, be sure to calculate savings on maintenance, and take into account the age of the current system. It’s likely that customers will have to replace their current system at some point — perhaps even twice — over the life of a geothermal system.

Include the Real Estate Value
Customers are increasing the value and marketability of their homes with the purchase of a geothermal system. Tell them to think about the marketability of their house compared to the house next door. Remind them to save their bills to show a prospective buyer just how efficient the geothermal system is compared to a traditional system.

Energy-efficiency improvements such as a geothermal system also increase a home’s value on an appraisal. Items such as granite countertops get zero on an appraisal. But any kind of energy efficiency improvement nets a credit.

The bottom line is that a geothermal system has a higher upfront cost than a conventional system, but it’s ultimately a great investment. Homeowners can not only dramatically reduce their energy bills, they can be green, have the latest technology, and, with the right financing, be cash-positive. That’s not a hard sell.

Linda Couch is chief operating office of Parrish Services, Manassas, VA. She can be reached at 703/656-2017, or by email at lcouch@parrishservices.com.