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CleanEdge reported today on the DOE's commitment of $50m to Geothermal Heat Pumps.

Geothermal heat pumps are nothing new. In fact, I recall hearing about them way back in my first thermodynamics class in engineering. The idea is that you pump heat from the outside when it is cold and pump heat to the outside when it is hot is simple. Given that, you want your outside temperature sink to be as hot as possible when it is cold out, and as cold as possible when it is hot out. The temperature of the ground, several feet below the surface makes this a far more attractive reservoir than just the ambient air.

So what's the problem? Well, a big issue is the fact that installing a geothermal heat pump is a custom job, involving digging up and installing an underground network of plumbing. For many homeowners, the cost of installing isn't worth the payback period. Well, what about the initial builder? Surely it is much cheaper to install when the house is first being built? Well, yes, but as everything in the green building space, if the developer can't charge more for the building because of an installation, then it's not worth putting in the installation, no matter how cheap it is. This is the classic developer/owner market failure that plagues any kind of efficient building (ie, the developer isn't the one paying the utility bill, and yet can't capture the long-term value of putting in efficient systems).

So, could this spur innovation to reduce up-front costs of these systems? Let's hope so!