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Michigan towns dig deep to reduce energy costs

Workers drill a geothermal bore hole some 500 feet deep in Wyandotte, Michigan. (Photo courtesy Wyandotte Municipal Services)

Despite being in one of the worst regions in the country for geothermal power, two Michigan cities are nevertheless finding ways to save on energy costs by tapping the earth’s natural heat.

In the Detroit suburbs of Wyandotte and Dearborn Heights, local officials are using federal grants and city funds to help reduce the upfront cost for residents to convert to geothermal heating and cooling. Geothermal systems can cost several times more to install than traditional central air conditioning or natural gas furnaces, but the additional costs are paid back through utility savings in 5-10 years, according to the U.S. Department of Energy.

Geothermal energy works by digging wells to a spot in the earth where there’s a relatively constant core temperature of about 50 degrees Fahrenheit. Water or an antifreeze solution is circulated to the spot through a closed loop of plastic pipes. During the winter, the fluid collects heat from the earth and carries it through the system and into the building. During the summer, the system is reversed, and the building is cooled by pulling heat back into the ground.

The systems work by using ground-source heat pumps, which take the place of a furnace or air-conditioning unit and use less electricity.

A shared resource

In Dearborn Heights, Ron Amen is spearheading a project to convert the city’s 33,000-square-foot senior center to geothermal heating and cooling. In a large grassy area next to the center, crews would drill wells to service the building and up to 400 neighborhood homes, said Amen, the city’s director of community and economic development.

“The building is 57 years old, and the boiler is 57 years old,” he said of the senior center. “Our superintendent of building maintenance tells me he’ll be surprised if it gets through another heating season.”

The senior center doesn’t have central air, either, and relies on a half-dozen old, inefficient window units in various rooms.

The nearby homes are 1,200-1,500 square feet, and almost all of them are bungalows or small ranches. “These people would see probably anywhere from a 50-75 percent reduction in heating costs with natural gas, and cooling costs,” he said.

Amen is working with Advanced Energy Group of Ann Arbor on the project. He’s currently seeking financing for a portion of the $700,000 cost, and plans to seek final approval later this year from the City Council. The project would also include new windows and improved insulation.

“Between the savings that we would realize in our heating and cooling costs, and what money I would be able to come up with in the next few years from community block grants, I’m hoping to get it paid off in eight years,” Amen said.

The big expense for a homeowner who wants to convert to geothermal are bores that have to be drilled, Amen said. “Here in this area, you have to go down about 500 feet to get a temperature of about 51 degrees.”

Residents in Dearborn Heights wouldn’t have to put in money upfront. They can receive a $5,000-$6,000 federal grant for switching their homes from natural gas to geothermal, Amen said. They would sign those grant checks over to the city, and make monthly payments for the new systems. The payments would be equal to what they’re currently paying for heating and cooling, with the savings from the geothermal system going to pay off the cost of the installed equipment. Paying off each system would take 4-5 years.

Amen said he has been shopping around the senior center plan to homeowners in Dearborn Heights, and has received an enthusiastic response so far.

A geothermal utility

The city of Wyandotte has gone a step further, and established  a geothermal utility with existing funds, said Melanie McCoy, general manager at Wyandotte Municipal Services, which provides power within city limits using a boiler that burns coal and shredded tires.

McCoy sees geothermal heating and cooling as another product that the city utility can provide for residents. “All we’re trying to do is remove a barrier” to installation, McCoy said.

According to McCoy, an average geothermal installation can cost $20,000, with $12,000 for the heat pump and $8,000 for the well.

Wyandotte is rolling out its new product gradually, and has established a rate system for homeowners. People can contract to have a system installed by the city, or have the city maintain a system installed by a third party, with various payment plans supported by a 30 percent federal tax credit and city utility rebates. A $26 monthly fee can replace the cost of drilling the well. About a dozen homes are expected to be converted this year.

McCoy says residents who make the switch will save money in the long run compared to conventional heating and cooling systems, and the city utility will benefit from reduced electricity demand in the summer.

In a separate project, Wyandotte is using a $7.8 million federal neighborhood stabilization grant to construct 25 new homes and rehabilitate 19 existing structures, about half of which are already under contract or in the works.

A quarter of those homes will be sold to low-income families for about $120,000, and fitted with geothermal heating and cooling systems, said Mark Kowalewski, Wyandotte city engineer.

“The reason I did geothermal is, I really can’t do anything with the mortgage payment or the interest or the taxes,” Kowalewski said. “But I can make it more cost-effective for the low-income person by making the utilities as low as possible.”

The geothermal bill for the homes will be about $28 a month, to cover maintenance. Residents will pay electrical costs for a geothermal pump that replaces a natural gas furnace, but can expect to save $1,500 to $1,700 a year in heating and cooling costs, he said. The goal is to finish all 44 homes by February 2013.

McCoy, from the Wyandotte utility, says a long-term plan is to create a direct-use system in her city — an infrastructure of wells and pipes that could provide geothermal heat to city homes. “We’re a pretty compact city,” she said, with about 26,000 residents in a 5-square-mile area.

‘In the future, you’re not going to have a choice’

Despite these efforts, Michigan isn’t necessarily a hot spot for geothermal energy. Limestone in Wyandotte and clay in Dearborn Heights make drilling more expensive than in other areas. The situation is similar throughout the Midwest.

“In general, the potential in the Midwest is really small,” said Rob Podgorney, a senior scientists at Idaho National Laboratory, which conducts geothermal and other energy research.

The western U.S. has a higher potential overall for geothermal energy, including heating, cooling and electricity generation, Podgorney said.

“If you go deep enough, you will find hot enough water or hot enough rocks” for a geothermal heating and cooling system, he explained. “In the Midwest, you have to go a whole lot deeper.”

Podgorney said Wyandotte’s geothermal utility appears to be the first of its kind in the Midwest. A handful of western states already have similar programs in place.

Amen, from Dearborn Heights, believes it’s only a matter of time before geothermal takes over as a dominant source of heating and cooling in the U.S. Besides being more efficient, geothermal doesn’t emit greenhouse gases associated with natural gas.

“In the future, you’re not going to have a choice,” he said. “You’re going to have to go with geothermal, that’s just the way it’s going to be with the rise in prices of natural gas. These fuels are finite. They’re not going to be around forever.”

Jeff Kart is principal at Enviroprose, an online communications consulting business based in Bay City, Michigan, that specializes in environmental media. He spent 14 years at The Bay City Times, the last several as an environmental reporter.

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