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The Elusive Canadian Housing Bubble

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  • #121
    Re: The Elusive Canadian Housing Bubble

    Time to drop in on Garth Turner's blog...it's been a while:
    ...Susan lives in Calgary with her husband, and was shocked at a story he came home with last week. “One of the guys he works with is up to his eyeballs in debt. (He’s in his forties, married, with three kids). He and his wife make about $150,000 between the two of them,” she says.

    “So, my husband suggested he look at a consumer proposal as he was at the end of his rope. So the guy called, I believe Money Mentors, and they were so busy they couldn’t get him in for an INITIAL meeting until March 31. They told him they have NEVER been this busy and are pushing through an application every half hour, per agent. And that is just a Calgary office. What’s the rest of the country doing? Just thought you should know….possibly a sign of the overextended times?”

    The latest stats suggest about 20% of everybody will eventually go bankrupt, Sue. It’s a shocking number, but should surprise nobody. Debt is endemic, and doesn’t seem to scare people the way it used to. The debt-to-income level of about 165% is at a record (US personal debt is 136%, and falling), and mortgage indebtedness just went off the charts.

    And this is with 0.9% car loans and 3% mortgages. Just wait until inflationary pressures force rates to normalize.

    Calgary? Why shouldn’t things be worse in a city where house prices are ridiculous? A SFH in Cowtown now costs almost $480,000 and is 26% more expensive than five years ago. Someday more locals will understand this isn’t something worth growing chest hair over...


    Comment

    • #122
      Re: The Elusive Canadian Housing Bubble

      Debt is endemic, and doesn’t seem to scare people the way it used to.
      Gee. I wonder why . . .

      Comment

      • #123
        Re: The Elusive Canadian Housing Bubble

        did it pop?

        The Canadian economy is rolling over and their recent jobs situation is worse than the US (and it's always cold weather-y up there?!) but the last great pillar of the 'recovery' in Canada is perhaps about to get crushed. As the WSJ noted recently, Canada's housing market is the most expensive in the world (60% over-valued by historical standards) and one simple reason explains it - Canada has been very open to foreign investors, which means that in an age of unprecedented global liquidity cash-rich wealthy individuals who are looking for places to park their excess funds can do so in its housing market. Until now... As SCMP reports, Canada’s government has announced that it is scrapping its controversial investor visa scheme, which has allowed waves of rich Hongkongers and mainland Chinese to immigrate since 1986. Soft landing?

        Deutsche Banks's house-price-to-rent index says Canada has the most expensive housing market in the world - 60% over-valued...


        "Canada, for example, is very open to foreign investors, which means that in an age of unprecedented global liquidity cash-rich wealthy individuals who are looking for places to park their excess funds can do so in its housing market far more easily than in Japan, with its closed system. "

        As it's home price index hardly missed a beat while the US plunged... (different scales but point is to illustrate drastic difference when financial crisis started - and where the liquidity went...)



        Via The South China Morning Post,

        Canada’s government has announced that it is scrapping its controversial investor visa scheme, which has allowed waves of rich Hongkongers and mainland Chinese to immigrate since 1986.

        The surprise announcement was made in Finance Minister Jim Flaherty’s budget, which was delivered to parliament in Ottawa on Tuesday afternoon local time. Tens of thousands of Chinese millionaires in the queue will reportedly have their applications scrapped and their application fees returned.

        The decision came less than a week after the South China Morning Post published a series of investigative reports into the controversial 28-year-old scheme.

        The Post revealed how the scheme spun out of control when Canada’s Hong Kong consulate was overwhelmed by a massive influx of applications from mainland millionaires. Applications to the scheme were frozen in 2012 as a result, as immigration staff struggled to clear the backlog.

        “In recent years, significant progress has been made to better align the immigration system with Canada’s economic needs. The current immigrant investor program stands out as an exception to this success,” Flaherty’s budget papers said.

        “For decades, it has significantly undervalued Canadian permanent residence, providing a pathway to Canadian citizenship in exchange for a guaranteed loan that is significantly less than our peer countries require,” it read.

        Under the scheme, would-be migrants worth a minimum of C$1.6 million (HK$11.3 million) loaned the government C$800,000 interest free for a period of five years. The simplicity and low relative cost of the risk-free scheme made it the world’s most popular wealth migration program.

        A parallel investor migration scheme run by Quebec still remains open. Many Chinese migrants use the alternative scheme to get into Canada via the French-speaking province and then move elsewhere in Canada. The federal government has previously pledged to crack down on what it said was a fraudulent practice.

        Flaherty also announced yesterday the scrapping of a smaller economic migration scheme for entrepreneurs.

        All told, 59,000 investor applicants and 7,000 entrepreneurs will have their applications returned, Postmedia News reported. Seventy per cent of the backlog, as of last January, was Chinese, suggesting more than 46,000 mainlanders will be affected by yesterday’s announcements.

        The Immigrant Investor Program, which has brought about 185,000 migrants to Canada, was instrumental in facilitating an exodus of rich Hongkongers in the wake of the 1989 Tiananmen massacre and in the run-up to the handover. More than 30,000 Hongkongers immigrated using the scheme, though SAR applications have dwindled since 1997.


        So the Canadian government is looking a liquidity gift-horse in the mouth and saying "no, thanks" - an impressive decision to take given the potential weakness in the real economy... we'll see how long it takes for the decision to be unwound, altered or canceled ...

        Comment

        • #124
          Re: The Elusive Canadian Housing Bubble

          Originally posted by don View Post
          did it pop?


          ...So the Canadian government is looking a liquidity gift-horse in the mouth and saying "no, thanks" - an impressive decision to take given the potential weakness in the real economy... we'll see how long it takes for the decision to be unwound, altered or canceled ...
          It is an irrelevant "liquidity gift horse", and the government finally figured that out. The joke around the world regarding Canadian passports is "Buy one, get one free". Programs like this simply promoted that situation. What Canada needs are immigrants that are committed to the nation and wanting to live and work here. What this program did was allow rich refugees, many from Asia, to move their families to Canada (mostly Vancouver), put their kids in school while Daddy did the Boeing commute from YVR to HK or KL. No small number of Middle Easterners have done the same thing, but their casual living residence of choice (only for as long as it took to qualify for the passport) was Montreal or Toronto.

          There's a whole industry of parasites that has developed around the immigration scene in Canada...lawyers, NGOs, welfare proponents and so forth that have successfully pressured fearful Federal politicians from urban ridings that pandered to the immigrant vote for re-election. The public attitude is changing (you can't fool all of the people all of the time...), and this government is responding to that shift in opinion.

          Comment

          • #125
            Re: The Elusive Canadian Housing Bubble

            ​any credibility with Zerocred on this one . . .

            The Music Just Ended: "Wealthy" Chinese Are Liquidating Offshore Luxury Homes In Scramble For Cash


            One of the primary drivers of the real estate bubble in the past several years, particularly in the ultra-luxury segment, were megawealthy Chinese buyers, seeking to park their cash into the safety of offshore real estate where it was deemed inaccessible to mainland regulators and overseers, tracking just where the Chinese record credit bubble would end up. Some, such as us, called it "hot money laundering", and together with foreclosure stuffing and institutional flipping (of rental units and otherwise), we said this was the third leg of the recent US housing bubble. However, while the impact of Chinese buying in the US has been tangible, it has paled in comparison with the epic Chinese buying frenzy in other offshore metropolitan centers like London and Hong Kong. This is understandable: after all as Chuck Prince famously said in 2007, just before the first US mega-bubble burst, "as long as the music is playing, you've got to get up and dance." In China, the music just ended.

            But more so than mere analyses which speculate on the true state of the Chinese record credit-fueled economy, such as the one we posted earlier today in which Morgan Stanley noted that China's "Minsky Moment" has finally arrived, we now can judge them by their actions.
            And sure enough, it didn't take long before the debris from China's sharp, sudden attempt to "realign" its runaway credit bubble, including the first ever corporate bond default earlier this month, floated right back to the surface.
            Presenting Exhibit A:




            Cash-strapped Chinese are scrambling to sell their luxury homes in Hong Kong, and some are knocking up to a fifth off the price for a quick sale, as a liquidity crunch looms on the mainland.


            Said otherwise, what goes up is now rapidly coming down.




            Wealthy Chinese were blamed for pushing up property prices in the former British territory, where they accounted for 43 percent of new luxury home sales in the third quarter of 2012, before a tax hike on foreign buyers was announced.

            The rush to sell coincides with a forecast 10 percent drop in property prices this year as the tax increase and rising borrowing costs cool demand. At the same time, credit conditions in China have tightened. Earlier this week, the looming bankruptcy of a Chinese property developer owing 3.5 billion yuan ($565.25 million) heightened concerns that financial risk was spreading.

            "Some of the mainland sellers have liquidity issues - say, their companies in China have some difficulties - so they sold the houses to get cash," said Norton Ng, account manager at a Centaline Property real estate office close to the China border, where luxury houses costing up to HK$30 million ($3.9 million) have been popular with mainland buyers.


            Alas, as the recent events in China, chronicled in minute detail here have revealed, the "liquidity issues" of the mainland sellers are about to go from bad to much worse. As for Hong Kong, it may have been last said so long ago nobody even remembers the origins of the word but, suddenly, it is now a seller's market:




            Property agents said mainland Chinese own close to a third of the existing homes that are now for sale in Hong Kong - up 20 percent from a year ago. Many are offering discounts of 5-10 percent below the market average - and in some cases as much as 20 percent - to make a quick sale, property agents and analysts said.


            Also known as a liquidation. And like every game theoretical outcome, he who defects first, or in this case sells, first, sells best. In fact, since panicked selling will only beget more selling, watch as prices suddenly plunge in what was until recently one of the most overvalued property markets in the world. And with prices still at nosebleed levels, not even BlackRock would be able to be a large enough bid to absorb all the slamming offers as suddenly everyone rushes to cash out.
            The biggest irony: after creating ghost towns at home, the Chinese "uber wealthy" army is doing so abroad.




            In a Hong Kong housing development called Valais, about 10 minutes drive from the Chinese border, real estate agents said that between a quarter and a half of the 330 houses are now on sale. At the development's frenzied debut in 2010, a third of the HK$30-HK$66 million units were sold on the first day, with nearly half going to mainland China buyers.

            Dubbed a "ghost town" by local media, the development built by the city's largest developer, Sun Hung Kai Properties Ltd (0016.HK), is one of many estates in Hong Kong where agents are seeing an increasing number of Chinese eager to sell.

            "Many mainland buyers bought lots of properties in Hong Kong when the market was red-hot three years ago," said Joseph Tsang, managing director at Jones Lang LaSalle. "But now they want to cash in as liquidity is quite tight in the mainland."


            Perhaps our post from yesterday chronicling the crash of the Chinese property developer market was on to something. And of course, as also described in detail, should China's Zhejiang Xingrun not be bailed out, as the PBOC sternly refuted it would do on Weibo, watch as the intermediary firms themselves shutter all credit, and bring the Chinese property market, both domestic and foreign, to a grinding halt (something he highlighted in our chart of the day).
            Meanwhile, the selling rush is on.

            In a nearby development called The Green - developed by China Overseas Land & Investment (0688.HK) - about one-fifth of the houses delivered at the start of this year are up for sale. More than half of the units, bought for between HK$18 million and HK$60 million, were snapped up by mainland Chinese in 2012.
            Because so much changes in just over a year.




            "Some banks were chasing them (Chinese landlords) for money, so they need to move some cash back to the mainland," said Ricky Poon, executive director of residential sales at Colliers International. "They're under greater pressure from banks, so they're cutting prices."

            In West Kowloon district, an area where mainland Chinese bought up close to a quarter of the apartments in many newly-developed estates, some Chinese landlords are offering discounts on the higher-end, three- to four-bedroom apartments they bought just a few years ago.

            This month, a Chinese landlord sold a 1,300 square foot (121 square meter) apartment at the Imperial Cullinan - a high-end estate developed by Sun Hung Kai in 2012 - for HK$19.3 million, 17 percent less than the original price. The landlord told agents to sell the flat "as soon as possible," said Richard Chan, branch manager at Centaline Property in West Kowloon.

            In the same area, a 645 square foot, 2-bedroom flat in the Central Park development was sold in just two days after the Chinese owner put it on the market at HK$6.5 million in what agents called the year's best bargain - the cheapest price for a unit of its kind over the past year.


            Don't worry there will be many more bargains. Why? Because what was once a buying panic - as recently as months ago - has finally shifted to its logical conclusion. Selling.




            "The most important thing for them is to sell as soon as possible," Centaline's Chan said. "In the past two weeks, those who were willing to cut prices were mainland Chinese. It is going to have some impact on the local property market, that's for sure."


            Indeed. And once the Hong Kong liquidation frenzy is over, and leaves the city in a state of shock, watch as the great Chinese selling horde stampedes from Los Angeles, to New York, to London, Zurich (Vancouver) and Geneva, and leave not a single 50% off sign in its wake.

            The good news? All those inaccessibly priced houses that were solely the stratospheric domain of the ultra-high net worth oligarch and criminal jet set, will soon be available to the general public. Especially once the global housing bubble pops, which may have just happened.

            Comment

            • #126
              Re: The Elusive Canadian Housing Bubble

              And on and on it goes...

              Posted on March 28, 2014 by Danielle Park

              The contest to entice every last warm body to reach for the most over-valued real estate in the world has reached a new fevered pitch in Canada...


              And the latest from Brian Ripley:



              Comment

              • #127
                Re: The Elusive Canadian Housing Bubble

                Camping out overnight for the opportunity to enter a draw for a city building lot.
                In Edmonton?
                Yikes!
                EDMONTON - There was a modern Edmonton land rush Thursday as people waited outside overnight for a chance to buy property in Oxford Phase 2.

                About 250 people lined up to be part of the draw for 40 city-owned lots in the northwest community...

                ...Arora, who lives in Ellerslie, was among the first 200 people at the Central Lions Seniors Recreation Centre, so his name will be part of Monday’s draw.

                Although he arrived for a noon-hour registration at breakfast time, the first potential homeowners
                showed up around 10:30 p.m. the previous night...

                ...Neeraj Mudholkar, who lined up at 6 a.m., said it’s a good area.

                He likes the requirement that houses meet a minimum EnerGuide energy efficiency rating of 80, up from 78 on 40 city lots sold in 2012.

                They must also be ready to have solar panels installed...

                Comment

                • #128
                  Re: The Elusive Canadian Housing Bubble

                  Originally posted by GRG55 View Post
                  Camping out overnight for the opportunity to enter a draw for a city building lot.
                  In Edmonton?
                  Yikes!
                  Land rush hits Edmonton as hopefuls camp out overnight for individual lots...
                  ....
                  About 250 people lined up to be part of the draw for 40 city-owned lots in the northwest community......
                  ...
                  He likes the requirement that houses meet a minimum EnerGuide energy efficiency rating of 80, up from 78 on 40 city lots sold in 2012.

                  They must also be ready to have solar panels installed                  ...

                  hell, thats nuthin.... but it must be the solar panels, eh GRG?

                  ;)

                  wonder who's 'workforce' they're referring to here:

                  There was a lottery scheduled. But that didn't stop 1,500 prospective buyers from standing in line for up to two hours ...
                  ...
                  635 units are designated as "workforce housing," which means that they're priced for households earning 140 percent of the median income for the area. That translates to a salary of $84,500 for a single homeowner, or $120,000 for a family of four.
                  and what - no prices (from up there in alberta) ?

                  Phase 1 consists of 11 homes ranging from a 1,231 sq. foot dwelling with 3 bedrooms and a 2,720 sq. foot lot for $476,400 to a 1,596 sq. foot home with 5 bedrooms and a 2,720 sq. foot lot (this is the average lot size, but there are a few that are larger) for $542,450. Prices subject to change and some upgraded options may be offered.
                  and theyz goin like hotcakes...

                  “The reason I’m buying here is because one, the developer puts out a good product. And the unit I’m interested in is the one bedroom, which I think is definitely undervalued,”...

                  One-bedroom units will start in the high $300,000s. A two bedroom will run in the mid $500,000s to start. And three-bedroom units will open in the mid $700,000s.

                  “Our target was the local market. So, we designed the units with the location to be able to walk to town and to the surrounding areas. We designed it for local people, so we wanted to price it that way also,”
                  still wondren just who them 'locals' are...
                  Last edited by lektrode; May 10, 2014, 08:06 PM.

                  Comment

                  • #129
                    Re: The Elusive Canadian Housing Bubble

                    Originally posted by lektrode View Post
                    hell, thats nuthin.... but it must be the solar panels, eh GRG?

                    ;)
                    I found the solar panel thing hilarious. Edmonton has about 9 months of winter every year, and at that latitude the solar panels have to be damn near vertical to be normal to the sun's elevation above the horizon in the cold season...

                    Comment

                    • #130
                      Re: The Elusive Canadian Housing Bubble

                      Originally posted by GRG55 View Post
                      I found the solar panel thing hilarious. Edmonton has about 9 months of winter every year, and at that latitude the solar panels have to be damn near vertical to be normal to the sun's elevation above the horizon in the cold season...
                      Earth to Sun - Can't We Just Get Along . . . . ;)

                      Comment

                      • #131
                        Re: The Elusive Canadian Housing Bubble

                        Originally posted by don View Post
                        Earth to Sun - Can't We Just Get Along . . . . ;)
                        To h@&# with the sun...in the climate we have here I have always thought that ground-source heat pumps made the most sense for an efficient, virtually endless energy source.

                        Comment

                        • #132
                          Re: The Elusive Canadian Housing Bubble

                          Sort of like this?

                          http://en.wikipedia.org/wiki/Geothermal_heat_pump

                          Geothermal heat pump

                          From Wikipedia, the free encyclopedia


                          This article is about using heat pumps to heat and cool buildings using the earth as a heat reservoir. For generation of electricity from genuine geothermal energy from hot rocks, see geothermal power. For using energy from hot rocks to heat directly, see geothermal heating.

                          Ground source heating and cooling


                          A geothermal heat pump or ground source heat pump (GSHP) is a central heating and/or cooling system that transfers heat to or from the ground.
                          It uses the earth as a heat source (in the winter) or a heat sink (in the summer). This design takes advantage of the moderate temperatures in the ground to boost efficiency and reduce the operational costs of heating and cooling systems, and may be combined with solar heating to form a geosolar system with even greater efficiency. Ground source heat pumps are also known as "geothermal heat pumps" although, strictly, the heat does not come primarily from the centre of the Earth, but from the Sun. They are also known by other names, including geoexchange, earth-coupled, earth energy systems. The engineering and scientific communities prefer the terms "geoexchange" or "ground source heat pumps" to avoid confusion with traditionalgeothermal power, which uses a high temperature heat source to generate electricity.[1] Ground source heat pumps harvest heat absorbed at the Earth's surface from solar energy. The temperature in the ground below 6 metres (20 ft) is roughly equal to themean annual air temperature [2] at that latitude at the surface.
                          Depending on latitude, the temperature beneath the upper 6 metres (20 ft) of Earth's surface maintains a nearly constant temperature between 10 and 16 °C (50 and 60 °F),[3] if the temperature is undisturbed by the presence of a heat pump. Like a refrigerator or air conditioner, these systems use a heat pump to force the transfer of heat from the ground. Heat pumps can transfer heat from a cool space to a warm space, against the natural direction of flow, or they can enhance the natural flow of heat from a warm area to a cool one. The core of the heat pump is a loop of refrigerant pumped through a vapor-compression refrigeration cycle that moves heat. Air-source heat pumps are typically more efficient at heating than pure electric heaters, even when extracting heat from cold winter air, although efficiencies begin dropping significantly as outside air temperatures drop below 5 °C (41 °F). A ground source heat pump exchanges heat with the ground. This is much more energy-efficient because underground temperatures are more stable than air temperatures through the year. Seasonal variations drop off with depth and disappear below 7 metres (23 ft)[4] to 12 metres (39 ft)[5] due to thermal inertia. Like a cave, the shallow ground temperature is warmer than the air above during the winter and cooler than the air in the summer. A ground source heat pump extracts ground heat in the winter (for heating) and transfers heat back into the ground in the summer (for cooling). Some systems are designed to operate in one mode only, heating or cooling, depending on climate.
                          Geothermal pump systems reach fairly high Coefficient of performance (CoP), 3 to 6, on the coldest of winter nights, compared to 1.75-2.5 for air-source heat pumps on cool days.[6] Ground source heat pumps (GSHPs) are among the most energy efficient technologies for providing HVAC and water heating.[7][8]
                          Setup costs are higher than for conventional systems, but the difference is usually returned in energy savings in 3 to 10 years, and even shorter lengths of time with federal, state and utility tax credits and incentives. Geothermal heat pump systems are reasonably warranted by manufacturers, and their working life is estimated at 25 years for inside components and 50+ years for the ground loop.[9] As of 2004, there are over a million units installed worldwide providing 12 GW of thermal capacity, with an annual growth rate of 10%.[10]
                          Sustainable development portal

                          Contents

                          [hide]


                          Differing terms and definitions[edit]


                          Ground source heating and cooling

                          This section requires expansion.(February 2010)
                          Some confusion exists with regard to the terminology of heat pumps and the use of the term "geothermal". "Geothermal" derives from the Greek and means "Earth heat" - which geologists and many laymen understand as describing hot rocks, volcanic activity or heat derived from deep within the earth. Though some confusion arises when the term "geothermal" is also used to apply to temperatures within the first 100 metres of the surface, this is "Earth heat" all the same, though it is largely influenced by stored energy from the sun.
                          History[edit]

                          The heat pump was described by Lord Kelvin in 1853 and developed by Peter Ritter von Rittinger in 1855. After experimenting with a freezer, Robert C. Webber built the first direct exchange ground-source heat pump in the late 1940s.[11] The first successful commercial project was installed in the Commonwealth Building (Portland, Oregon) in 1948, and has been designated a National Historic Mechanical Engineering Landmark by ASME.[12] The technology became popular in Sweden in the 1970s, and has been growing slowly in worldwide acceptance since then. Open loop systems dominated the market until the development of polybutylene pipe in 1979 made closed loop systems economically viable.[12] As of 2004, there are over a million units installed worldwide providing 12 GW of thermal capacity.[10] Each year, about 80,000 units are installed in the US (geothermal energy is used in all 50 US states today, with great potential for near-term market growth and savings)[13] and 27,000 in Sweden.[10] In Finland, a geothermal heat pump was the most common heating system choice for new detached houses between 2006 and 2011 with market share exceeding 40%.[14]
                          Ground heat exchanger[edit]

                          See also: Ground-coupled heat exchanger

                          Loop field for a 12-ton system (unusually large for most residential applications)

                          Heat pumps provide winter heating by extracting heat from a source and transferring it into a building. Heat can be extracted from any source, no matter how cold, but a warmer source allows higher efficiency. A ground source heat pump uses the top layer of the earth's crust as a source of heat, thus taking advantage of its seasonally moderated temperature.
                          In the summer, the process can be reversed so the heat pump extracts heat from the building and transfers it to the ground. Transferring heat to a cooler space takes less energy, so the cooling efficiency of the heat pump gains benefits from the lower ground temperature.
                          Ground source heat pumps employ a heat exchanger in contact with the ground or groundwater to extract or dissipate heat. This component accounts for anywhere from a fifth to half of the total system cost, and would be the most cumbersome part to repair or replace. Correctly sizing this component is necessary to assure long-term performance: the energy efficiency of the system improves with roughly 4% for every degree Celsius that is won through correct sizing, and the underground temperature balance must be maintained through proper design of the whole system.
                          Shallow 3–8 feet (1 to 3 metres) horizontal heat exchangers experience seasonal temperature cycles due to solar gains and transmission losses to ambient air at ground level. These temperature cycles lag behind the seasons because of thermal inertia, so the heat exchanger will harvest heat deposited by the sun several months earlier, while being weighed down in late winter and spring, due to accumulated winter cold. Deep vertical systems 100–500 feet (33 to 160 metres) rely on migration of heat from surrounding geology, unless they are recharged annually by solar recharge of the ground or exhaust heat from air conditioning systems.
                          Several major design options are available for these, which are classified by fluid and layout. Direct exchange systems circulate refrigerant underground, closed loop systems use a mixture of anti-freeze and water, and open loop systems use natural groundwater.
                          Direct exchange[edit]

                          Main article: Direct exchange geothermal heat pump
                          The Direct exchange geothermal heat pump is the oldest type of geothermal heat pump technology. The ground-coupling is achieved through a single loop, circulating refrigerant, in direct thermal contact with the ground (as opposed to a combination of a refrigerant loop and a water loop). The refrigerant leaves the heat pump cabinet, circulates through a loop of copper tube buried underground, and exchanges heat with the ground before returning to the pump. The name "direct exchange" refers to heat transfer between the refrigerant loop and the ground without the use of an intermediate fluid. There is no direct interaction between the fluid and the earth; only heat transfer through the pipe wall. Direct exchange heat pumps, which are now rarely used, are not to be confused with "water-source heat pumps" or "water loop heat pumps" since there is no water in the ground loop. ASHRAE defines the term ground-coupled heat pump to encompass closed loop and direct exchange systems, while excluding open loops.
                          Direct exchange systems are more efficient and have potentially lower installation costs than closed loop water systems. Copper's high thermal conductivity contributes to the higher efficiency of the system, but heat flow is predominantly limited by the thermal conductivity of the ground, not the pipe. The main reasons for the higher efficiency are the elimination of the water pump (which uses electricity), the elimination of the water-to-refrigerant heat exchanger (which is a source of heat losses), and most importantly, the latent heat phase change of the refrigerant in the ground itself.
                          While they require more refrigerant and their tubing is more expensive per foot, a direct exchange earth loop is shorter than a closed water loop for a given capacity. A direct exchange system requires only 15 to 30% of the length of tubing and half the diameter of drilled holes, and the drilling or excavation costs are therefore lower. Refrigerant loops are less tolerant of leaks than water loops because gas can leak out through smaller imperfections. This dictates the use of brazed copper tubing, even though the pressures are similar to water loops. The copper loop must be protected from corrosion in acidic soil through the use of a sacrificial anode or other cathodic protection.
                          The U.S. Environmental Protection Agency conducted field monitoring of a direct geoexchange heat pump water heating system in a commercial application. The EPA reported that the system saved 75% of the electrical energy that would have been required by an electrical resistance water heating unit. According to the EPA, if the system is operated to capacity, it can avoid the emission of up to 7,100 pounds of CO2 and 15 pounds of NOx each year per ton of compressor capacity (or 42,600 lbs. of CO2 and 90 lbs. of NOx for a typical 6 ton system).[15]
                          In Northern climates, although the earth temperature is cooler, so is the incoming water temperature, which enables the high efficiency systems to replace more energy that would otherwise be required of electric or fossil fuel fired systems. Any temperature above -40°F is sufficient to evaporate the refrigerant, and the direct exchange system can harvest energy through ice.
                          In extremely hot climates with dry soil, the addition of an auxiliary cooling module as a second condenser in line between the compressor and the earth loops increases efficiency and can further reduce the amount of earth loop to be installed.
                          Closed loop[edit]

                          Most installed systems have two loops on the ground side: the primary refrigerant loop is contained in the appliance cabinet where it exchanges heat with a secondary water loop that is buried underground. The secondary loop is typically made of High-density polyethylene pipe and contains a mixture of water and anti-freeze (propylene glycol, denatured alcohol or methanol). Monopropylene glycol has the least damaging potential when it might leak into the ground, and is therefore the only allowed anti-freeze in ground sources in an increasing number of European countries. After leaving the internal heat exchanger, the water flows through the secondary loop outside the building to exchange heat with the ground before returning. The secondary loop is placed below the frost line where the temperature is more stable, or preferably submerged in a body of water if available. Systems in wet ground or in water are generally more efficient than drier ground loops since it is less work to move heat in and out of water than solids in sand or soil. If the ground is naturally dry, soaker hoses may be buried with the ground loop to keep it wet.

                          An installed liquid pump pack

                          Closed loop systems need a heat exchanger between the refrigerant loop and the water loop, and pumps in both loops. Some manufacturers have a separate ground loop fluid pump pack, while some integrate the pumping and valving within the heat pump. Expansion tanks and pressure relief valves may be installed on the heated fluid side. Closed loop systems have lower efficiency than direct exchange systems, so they require longer and larger pipe to be placed in the ground, increasing excavation costs.
                          Closed loop tubing can be installed horizontally as a loop field in trenches or vertically as a series of long U-shapes in wells (see below). The size of the loop field depends on the soil type and moisture content, the average ground temperature and the heat loss and or gain characteristics of the building being conditioned. A rough approximation of the initial soil temperature is the average daily temperature for the region.
                          Vertical[edit]

                          A vertical closed loop field is composed of pipes that run vertically in the ground. A hole is bored in the ground, typically 50 to 400 feet (15–122 m) deep. Pipe pairs in the hole are joined with a U-shaped cross connector at the bottom of the hole. The borehole is commonly filled with a bentonite groutsurrounding the pipe to provide a thermal connection to the surrounding soil or rock to improve the heat transfer. Thermally enhanced grouts are available to improve this heat transfer. Grout also protects the ground water from contamination, and prevents artesian wells from flooding the property. Vertical loop fields are typically used when there is a limited area of land available. Bore holes are spaced at least 5–6 m apart and the depth depends on ground and building characteristics. For illustration, a detached house needing 10 kW (3 ton) of heating capacity might need three boreholes 80 to 110 m (260 to 360 ft) deep.[16] (A ton of heat is 12,000British thermal units per hour (BTU/h) or 3.5 kilowatts.) During the cooling season, the local temperature rise in the bore field is influenced most by the moisture travel in the soil. Reliable heat transfer models have been developed through sample bore holes as well as other tests.
                          Horizontal[edit]


                          A 3-ton slinky loop prior to being covered with soil. The three slinky loops are running out horizontally with three straight lines returning the end of the slinky coil to the heat pump

                          A horizontal closed loop field is composed of pipes that run horizontally in the ground. A long horizontal trench, deeper than the frost line, is dug and U-shaped or slinky coils are placed horizontally inside the same trench. Excavation for shallow horizontal loop fields is about half the cost of vertical drilling, so this is the most common layout used wherever there is adequate land available. For illustration, a detached house needing 10 kW (3 ton) of heating capacity might need 3 loops 120 to 180 m (390 to 590 ft) long of NPS 3/4 (DN 20) or NPS 1.25 (DN 32) polyethylene tubing at a depth of 1 to 2 m (3.3 to 6.6 ft).[17]
                          The depth at which the loops are placed significantly influences the energy consumption of the heat pump in two opposite ways: shallow loops tend to indirectly absorb more heat from the sun, which is helpful, especially when the ground is still cold after a long winter. On the other hand, shallow loops are also cooled down much more readily by weather changes, especially during long cold winters, when heating demand peaks. Often, the second effect is much greater than the first one, leading to higher costs of operation for the more shallow ground loops. This problem can be reduced by increasing both the depth and the length of piping, thereby significantly increasing costs of installation. However, such expenses might be deemed feasible, as they may result in lower operating costs. Recent studies show that utilization of a non-homogeneous soil profile with a layer of low conductive material above the ground pipes can help mitigate the adverse effects of shallow pipe burial depth. The intermediate blanket with lower conductivity than the surrounding soil profile demonstrated the potential to increase the energy extraction rates from the ground to as high as 17% for a cold climate and about 5-6% for a relatively moderate climate.[18]
                          A slinky (also called coiled) closed loop field is a type of horizontal closed loop where the pipes overlay each other (not a recommended method). The easiest way of picturing a slinky field is to imagine holding a slinky on the top and bottom with your hands and then moving your hands in opposite directions. A slinky loop field is used if there is not adequate room for a true horizontal system, but it still allows for an easy installation. Rather than using straight pipe, slinky coils use overlapped loops of piping laid out horizontally along the bottom of a wide trench. Depending on soil, climate and the heat pump's run fraction, slinky coil trenches can be up to two thirds shorter than traditional horizontal loop trenches. Slinky coil ground loops are essentially a more economical and space efficient version of a horizontal ground loop.[19]
                          If one wants a single house ground source heat pump system with maximum energy efficiency, then oversized vertical loops are usually more cost efficient than oversized and extra deep horizontal loops.
                          Radial or directional drilling[edit]

                          As an alternative to trenching, loops may be laid by mini horizontal directional drilling (mini-HDD). This technique can lay piping under yards, driveways, gardens or other structures without disturbing them, with a cost between those of trenching and vertical drilling. This system also differs from horizontal & vertical drilling as the loops are installed from one central chamber, further reducing the ground space needed. Radial drilling is often installed retroactively (after the property has been built) due to the small nature of the equipment used and the ability to bore beneath existing constructions.
                          Pond[edit]


                          12-ton pond loop system being sunk to the bottom of a pond

                          A closed pond loop is not common because it depends on proximity to a body of water, where an open loop system is usually preferable. A pond loop may be advantageous where poor water quality precludes an open loop, or where the system heat load is small. A pond loop consists of coils of pipe similar to a slinky loop attached to a frame and located at the bottom of an appropriately sized pond or water source.
                          Open loop[edit]

                          In an open loop system (also called a groundwater heat pump), the secondary loop pumps natural water from a well or body of water into a heat exchanger inside the heat pump. ASHRAE calls open loop systems groundwater heat pumps or surface water heat pumps, depending on the source. Heat is either extracted or added by the primary refrigerant loop, and the water is returned to a separate injection well, irrigation trench, tile field or body of water. The supply and return lines must be placed far enough apart to ensure thermal recharge of the source. Since the water chemistry is not controlled, the appliance may need to be protected from corrosion by using different metals in the heat exchanger and pump. Limescale may foul the system over time and require periodic acid cleaning. This is much more of a problem with cooling systems than heating systems.[20] Also, as fouling decreases the flow of natural water, it becomes difficult for the heat pump to exchange building heat with the groundwater. If the water contains high levels of salt, minerals, iron bacteria or hydrogen sulfide, a closed loop system is usually preferable.
                          Deep lake water cooling uses a similar process with an open loop for air conditioning and cooling. Open loop systems using ground water are usually more efficient than closed systems because they are better coupled with ground temperatures. Closed loop systems, in comparison, have to transfer heat across extra layers of pipe wall and dirt.
                          A growing number of jurisdictions have outlawed open-loop systems that drain to the surface because these may drain aquifers or contaminate wells. This forces the use of more environmentally sound injection wells or a closed loop system.
                          Standing column well[edit]

                          A standing column well system is a specialized type of open loop system. Water is drawn from the bottom of a deep rock well, passed through a heat pump, and returned to the top of the well, where traveling downwards it exchanges heat with the surrounding bedrock.[21] The choice of a standing column well system is often dictated where there is near-surface bedrock and limited surface area is available. A standing column is typically not suitable in locations where the geology is mostly clay, silt, or sand. If bedrock is deeper than 200 feet (61 m) from the surface, the cost of casing to seal off the overburden may become prohibitive.
                          A multiple standing column well system can support a large structure in an urban or rural application. The standing column well method is also popular in residential and small commercial applications. There are many successful applications of varying sizes and well quantities in the many boroughs of New York City, and is also the most common application in the New England states. This type of ground source system has some heat storage benefits, where heat is rejected from the building and the temperature of the well is raised, within reason, during the Summer cooling months which can then be harvested for heating in the Winter months, thereby increasing the efficiency of the heat pump system. As with closed loop systems, sizing of the standing column system is critical in reference to the heat loss and gain of the existing building. As the heat exchange is actually with the bedrock, using water as the transfer medium, a large amount of production capacity (water flow from the well) is not required for a standing column system to work. However, if there is adequate water production, then the thermal capacity of the well system can be enhanced by discharging a small percentage of system flow during the peak Summer and Winter months.
                          Since this is essentially a water pumping system, standing column well design requires critical considerations to obtain peak operating efficiency. Should a standing column well design be misapplied, leaving out critical shut-off valves for example, the result could be an extreme loss in efficiency and thereby cause operational cost to be higher than anticipated.
                          Building distribution[edit]


                          Liquid-to-air heat pump

                          The heat pump is the central unit that becomes the heating and cooling plant for the building. Some models may cover space heating, space cooling, (space heating via conditioned air, hydronic systems and / or radiant heating systems), domestic or pool water preheat (via the desuperheater function), demand hot water, and driveway ice melting all within one appliance with a variety of options with respect to controls, staging and zone control. The heat may be carried to its end use by circulating water or forced air. Almost all types of heat pumps are produced for commercial and residential applications.
                          Liquid-to-air heat pumps (also called water-to-air) output forced air, and are most commonly used to replace legacy forced air furnaces and central air conditioning systems. There are variations that allow for split systems, high-velocity systems, and ductless systems. Heat pumps cannot achieve as high a fluid temperature as a conventional furnace, so they require a higher volume flow rate of air to compensate. When retrofitting a residence, the existing duct work may have to be enlarged to reduce the noise from the higher air flow.

                          Liquid-to-water heat pump

                          Liquid-to-water heat pumps (also called water-to-water) are hydronic systems that use water to carry heating or cooling through the building. Systems such as radiantunderfloor heating, baseboard radiators, conventional cast iron radiators would use a liquid-to-water heat pump. These heat pumps are preferred for pool heating or domestic hot water pre-heat. Heat pumps can only heat water to about 50 °C (122 °F) efficiently, whereas a boiler normally reaches 65–95 °C (149–203 °F). Legacy radiators designed for these higher temperatures may have to be doubled in numbers when retrofitting a home. A hot water tank will still be needed to raise water temperatures above the heat pump's maximum, but pre-heating will save 25-50% of hot water costs.
                          Ground source heat pumps are especially well matched to underfloor heating and baseboard radiator systems which only require warm temperatures 40 °C (104 °F) to work well. Thus they are ideal for open plan offices. Using large surfaces such as floors, as opposed to radiators, distributes the heat more uniformly and allows for a lower water temperature. Wood or carpet floor coverings dampen this effect because the thermal transfer efficiency of these materials is lower than that of masonry floors (tile, concrete). Underfloor piping, ceiling or wall radiators can also be used for cooling in dry climates, although the temperature of the circulating water must be above the dew point to ensure that atmospheric humidity does not condense on the radiator.
                          Combination heat pumps are available that can produce forced air and circulating water simultaneously and individually. These systems are largely being used for houses that have a combination of air and liquid conditioning needs, for example central air conditioning and pool heating.
                          Seasonal thermal storage[edit]


                          A heat pump in combination with heat and cold storage

                          Main article: Seasonal thermal energy storage
                          The efficiency of ground source heat pumps can be greatly improved by using seasonal thermal energy storage and interseasonal heat transfer.[22] Heat captured and stored in thermal banks in the summer can be retrieved efficiently in the winter. Heat storage efficiency increases with scale, so this advantage is most significant in commercial or district heatingsystems.
                          Geosolar combisystems have been used to heat and cool a greenhouse using an aquifer for thermal storage.[23] In summer, the greenhouse is cooled with cold ground water. This heats the water in the aquifer which can become a warm source for heating in winter.[23][24] The combination of cold and heat storage with heat pumps can be combined with water/humidity regulation. These principles are used to provide renewable heat and renewable cooling[25] to all kinds of buildings.
                          Also the efficiency of existing small heat pump installations can be improved by adding large, cheap, water filled solar collectors. These may be integrated into a to-be-overhauled parking lot, or in walls or roof constructions by installing one inch PE pipes into the outer layer.
                          Thermal efficiency[edit]

                          Main article: thermal efficiency
                          The net thermal efficiency of a heat pump should take into account the efficiency of electricity generation and transmission, typically about 30%.[10] Since a heat pump moves 3 to 5 times more heat energy than the electric energy it consumes, the total energy output is much greater than the input. This results in net thermal efficiencies greater than 300% as compared to radiant electric heat being 100% efficient. Traditional combustion furnaces and electric heaters can never exceed 100% efficiency.
                          Geothermal heat pumps can reduce energy consumption— and corresponding air pollution emissions—up to 44% compared to air source heat pumps and up to 72% compared to electric resistance heating with standard air-conditioning equipment.[26]
                          The dependence of net thermal efficiency on the electricity infrastructure tends to be an unnecessary complication for consumers and is not applicable to hydroelectric power, so performance of heat pumps is usually expressed as the ratio of heating output or heat removal to electricity input. Cooling performance is typically expressed in units of BTU/hr/watt as the Energy Efficiency Ratio, (EER) while heating performance is typically reduced to dimensionless units as theCoefficient of Performance. (COP) The conversion factor is 3.41 BTU/hr/watt. Performance is influenced by all components of the installed system, including the soil conditions, the ground-coupled heat exchanger, the heat pump appliance, and the building distribution, but is largely determined by the "lift" between the input temperature and the output temperature.
                          For the sake of comparing heat pump appliances to each other, independently from other system components, a few standard test conditions have been established by the American Refrigerant Institute (ARI) and more recently by the International Organization for Standardization. Standard ARI 330 ratings were intended for closed loop ground-source heat pumps, and assumes secondary loop water temperatures of 77 °F (25 °C) for air conditioning and 32 °F (0 °C) for heating. These temperatures are typical of installations in the northern US. Standard ARI 325 ratings were intended for open loop ground-source heat pumps, and include two sets of ratings for groundwater temperatures of 50 °F (10 °C) and 70 °F (21 °C). ARI 325 budgets more electricity for water pumping than ARI 330. Neither of these standards attempt to account for seasonal variations. Standard ARI 870 ratings are intended for direct exchange ground-source heat pumps. ASHRAE transitioned to ISO 13256-1 in 2001, which replaces ARI 320, 325 and 330. The new ISO standard produces slightly higher ratings because it no longer budgets any electricity for water pumps.[1]
                          Efficient compressors, variable speed compressors and larger heat exchangers all contribute to heat pump efficiency. Residential ground source heat pumps on the market today have standard COPs ranging from 2.4 to 5.0 and EERs ranging from 10.6 to 30.[1][27] To qualify for an Energy Star label, heat pumps must meet certain minimum COP and EER ratings which depend on the ground heat exchanger type. For closed loop systems, the ISO 13256-1 heating COP must be 3.3 or greater and the cooling EER must be 14.1 or greater.[28]
                          Actual installation conditions may produce better or worse efficiency than the standard test conditions. COP improves with a lower temperature difference between the input and output of the heat pump, so the stability of ground temperatures is important. If the loop field or water pump is undersized, the addition or removal of heat may push the ground temperature beyond standard test conditions, and performance will be degraded. Similarly, an undersized blower may allow the plenum coil to overheat and degrade performance.
                          Soil without artificial heat addition or subtraction and at depths of several metres or more remains at a relatively constant temperature year round. This temperature equates roughly to the average annual air-temperature of the chosen location, usually 7–12 °C (45–54 °F) at a depth of 6 metres (20 ft) in the northern US. Because this temperature remains more constant than the air temperature throughout the seasons, geothermal heat pumps perform with far greater efficiency during extreme air temperatures than air conditioners and air-source heat pumps.
                          Standards ARI 210 and 240 define Seasonal Energy Efficiency Ratio (SEER) and Heating Seasonal Performance Factors (HSPF) to account for the impact of seasonal variations on air source heat pumps. These numbers are normally not applicable and should not be compared to ground source heat pump ratings. However, Natural Resources Canada has adapted this approach to calculate typical seasonally adjusted HSPFs for ground-source heat pumps in Canada.[16] The NRC HSPFs ranged from 8.7 to 12.8 BTU/hr/watt (2.6 to 3.8 in nondimensional factors, or 255% to 375% seasonal average electricity utilization efficiency) for the most populated regions of Canada. When combined with the thermal efficiency of electricity, this corresponds to net average thermal efficiencies of 100% to 150%.
                          Environmental impact[edit]

                          The US Environmental Protection Agency (EPA) has called ground source heat pumps the most energy-efficient, environmentally clean, and cost-effective space conditioning systems available.[29] Heat pumps offer significant emission reductions potential, particularly where they are used for both heating and cooling and where the electricity is produced from renewable resources.
                          Ground-source heat pumps have unsurpassed thermal efficiencies and produce zero emissions locally, but their electricity supply includes components with high greenhouse gas emissions, unless the owner has opted for a 100% renewable energy supply. Their environmental impact therefore depends on the characteristics of the electricity supply and the available alternatives.
                          Canada 223 ton/GWh[30][31][32] 2.7 ton/yr 5.3 ton/yr 3.4 ton/yr
                          Russia 351 ton/GWh[30][31] 1.8 ton/yr 4.4 ton/yr 5.4 ton/yr
                          US 676 ton/GWh[31] -0.5 ton/yr 2.2 ton/yr 10.3 ton/yr
                          China 839 ton/GWh[30][31] -1.6 ton/yr 1.0 ton/yr 12.8 ton/yr
                          The GHG emissions savings from a heat pump over a conventional furnace can be calculated based on the following formula:[4]

                          • HL = seasonal heat load ≈ 80 GJ/yr for a modern detached house in the northern US
                          • FI = emissions intensity of fuel = 50 kg(CO2)/GJ for natural gas, 73 for heating oil, 0 for 100% renewable energy such as wind, hydro, photovoltaic or solar thermal
                          • AFUE = furnace efficiency ≈ 95% for a modern condensing furnace
                          • COP = heat pump coefficient of performance ≈ 3.2 seasonally adjusted for northern US heat pump
                          • EI = emissions intensity of electricity ≈ 200-800 ton(CO2)/GWh, depending on region

                          Ground-source heat pumps always produce fewer greenhouse gases than air conditioners, oil furnaces, and electric heating, but natural gas furnaces may be competitive depending on the greenhouse gas intensity of the local electricity supply. In countries like Canada and Russia with low emitting electricity infrastructure, a residential heat pump may save 5 tons of carbon dioxide per year relative to an oil furnace, or about as much as taking an average passenger car off the road. But in cities like Beijing or Pittsburgh that are highly reliant on coal for electricity production, a heat pump may result in 1 or 2 tons more carbon dioxide emissions than a natural gas furnace. For areas not served by utility natural gas infrastructure, however, no better alternative exists.
                          The fluids used in closed loops may be designed to be biodegradable and non-toxic, but the refrigerant used in the heat pump cabinet and in direct exchange loops was, until recently, chlorodifluoromethane, which is an ozone depleting substance.[1] Although harmless while contained, leaks and improper end-of-life disposal contribute to enlarging the ozone hole. For new construction, this refrigerant is being phased out in favor of the ozone-friendly but potent greenhouse gas R410A. The EcoCute water heater is an air-source heat pump that uses Carbon Dioxide as its working fluid instead of Chlorofluorocarbons.[citation needed]
                          Open loop systems (i.e. those that draw ground water as opposed to closed loop systems using a borehole heat exchanger) need to be balanced by reinjecting the spent water. This prevents aquifer depletion and the contamination of soil or surface water with brine or other compounds from underground.[citation needed]
                          Before drilling the underground geology needs to be understood, and drillers need to be prepared to seal the borehole, including preventing penetration of water between strata. The unfortunate example is a geothermal heating project in Staufen im Breisgau, Germany which seems the cause of considerable damage to historical buildings there. In 2008, the city centre was reported to have risen 12 cm,[33] after initially sinking a few millimeters.[34] The boring tapped a naturally pressurized aquifer, and via the borehole this water entered a layer of anhydrite, which expands when wet as it forms gypsum. The swelling will stop when the anhydrite is fully reacted, and reconstruction of the city center "is not expedient until the uplift ceases." By 2010 sealing of the borehole had not been accomplished.[35][36][37] By 2010, some sections of town had risen by 30 cm.[38]
                          Ground-source heat pump technology, like building orientation, is a natural building technique (bioclimatic building).
                          Economics[edit]

                          Ground source heat pumps are characterized by high capital costs and low operational costs compared to other HVAC systems. Their overall economic benefit depends primarily on the relative costs of electricity and fuels, which are highly variable over time and across the world. Based on recent prices, ground-source heat pumps currently have lower operational costs than any other conventional heating source almost everywhere in the world. Natural gas is the only fuel with competitive operational costs, and only in a handful of countries where it is exceptionally cheap, or where electricity is exceptionally expensive.[4] In general, a homeowner may save anywhere from 20% to 60% annually on utilities by switching from an ordinary system to a ground-source system.[39][40]
                          Capital costs and system lifespan have received much less study until recently, and the return on investment is highly variable. The most recent data from an analysis of 2011-2012 incentive payments in the state of Maryland showed an average cost of residential systems of $1.90 per Watt, or about $26,700 for a typical (4 ton) home system.[41] An older study found the total installed cost for a system with 10 kW (3 ton) thermal capacity for a detached rural residence in the US averaged $8000–$9000 in 1995 US dollars.[42] More recent studies found an average cost of $14,000 in 2008 US dollars for the same size system.[43][44] The US Department of Energy estimates a price of $7500 on its website, last updated in 2008.[45] Prices over $20,000 are quoted in Canada,[46] with one source placing them in the range of $30,000-$34,000 Canadian dollars.[47] The rapid escalation in system price has been accompanied by rapid improvements in efficiency and reliability. Capital costs are known to benefit from economies of scale, particularly for open loop systems, so they are more cost-effective for larger commercial buildings and harsher climates. The initial cost can be two to five times that of a conventional heating system in most residential applications, new construction or existing. In retrofits, the cost of installation is affected by the size of living area, the home's age, insulation characteristics, the geology of the area, and location of the property. Proper duct system design and mechanical air exchange should be considered in the initial system cost.
                          Canada 13 years 3 years 6 years
                          US 12 years 5 years 4 years
                          Germany net loss 8 years 2 years
                          Notes:
                          • Highly variable with energy prices.
                          • Government subsidies not included.
                          • Climate differences not evaluated.
                          Capital costs may be offset by government subsidies, for example, Ontario offered $7000 for residential systems installed in the 2009 fiscal year. Some electric companies offer special rates to customers who install a ground-source heat pump for heating or cooling their building.[48] Where electrical plants have larger loads during summer months and idle capacity in the winter, this increases electrical sales during the winter months. Heat pumps also lower the load peak during the summer due to the increased efficiency of heat pumps, thereby avoiding costly construction of new power plants. For the same reasons, other utility companies have started to pay for the installation of ground-source heat pumps at customer residences. They lease the systems to their customers for a monthly fee, at a net overall saving to the customer.
                          The lifespan of the system is longer than conventional heating and cooling systems. Good data on system lifespan is not yet available because the technology is too recent, but many early systems are still operational today after 25–30 years with routine maintenance. Most loop fields have warranties for 25 to 50 years and are expected to last at least 50 to 200 years.[39][49] Ground-source heat pumps use electricity for heating the house. The higher investment above conventional oil, propane or electric systems may be returned in energy savings in 2–10 years for residential systems in the US.[9][40][49] If compared to natural gas systems, the payback period can be much longer or non-existent. The payback period for larger commercial systems in the US is 1–5 years, even when compared to natural gas.[40] Additionally, because geothermal heat pumps usually have no outdoor compressors or cooling towers, the risk of vandalism is reduced or eliminated, potentially extending a system's lifespan.[50]
                          Ground source heat pumps are recognized as one of the most efficient heating and cooling systems on the market. They are often the second-most cost effective solution in extreme climates, (after co-generation), despite reductions in thermal efficiency due to ground temperature. (The ground source is warmer in climates that need strong air conditioning, and cooler in climates that need strong heating.)
                          Commercial systems maintenance costs in the US have historically been between $0.11 to $0.22 per m2 per year in 1996 dollars, much less than the average $0.54 per m2 per year for conventional HVAC systems.[12]
                          Governments that promote renewable energy will likely offer incentives for the consumer (residential), or industrial markets. For example, in the United States, incentives are offered both on the state and federal levels of government.[51] In the United Kingdom the Renewable Heat Incentive provides a financial incentive for generation of renewable heat based on metered readings on an annual basis for 20 years for commercial buildings. The domestic Renewable Heat Incentive is due to be introduced in Spring 2014[52] for seven years and be based on deemed heat.
                          Installation[edit]

                          Because of the technical knowledge and equipment needed to design and size the system properly (and install the piping if heat fusion is required), a GSHP system installation requires a professional's services. Several installers have published real-time views of system performance in an online community of recent residential installations. The International Ground Source Heat Pump Association (IGSHPA), Geothermal Exchange Organization (GEO), the Canadian GeoExchange Coalition and the Ground Source Heat Pump Association maintain listings of qualified installers in the US, Canada and the UK.[53]
                          See also[edit]

                          Renewable energy portal
                          Energy portal
                          Technology portal



                          References[edit]



                          External links[edit]



                          Categories:


                          Comment

                          • #133
                            Re: The Elusive Canadian Housing Bubble

                            Of course there are economic considerations:

                            http://energy.gov/eere/geothermal/geothermal-faqs

                            http://www.popularmechanics.com/scie...hermal/4331401


                            The Guide to Home Geothermal Energy

                            Efficient and economical, geothermal heats, cools and cuts fossil fuel use at home. Whether you're in sunny Florida, or snowy New Hampshire, a ground-fed climate system can free a consumer from fluctuating energy prices and save money on power bills immediately. Here's how it works.


                            BY HARRY SAWYERS


                            December 18, 2009 3:28 AM

                            Drill and Fill: Installers thread pipe into a hole a few inches wide and over 100 feet deep. As wind and solar hog the alt-energy spotlight, this technology has remained underground.


                            "You're not making heat, you're moving heat," Colorado geothermal installer Jim Lynch says. Installations like Lynch's tap into the earth below the frost line--which always stays around 50 degrees Fahrenheit--to reduce a home's heating and cooling loads. All HVAC systems require energy-intensive heat movement, a task responsible for over half of the average house's total energy demand. Geothermal works more efficiently because the system's mild starting point creates an efficient shortcut to the target temperature. Imagine a 100-degree Florida day or a 0-degree Michigan night: Spot the system 50 degrees, and it doesn't work so hard to get the house comfortable.

                            Unlike wind and solar, geothermal's power source never varies.

                            Bob Brown, vice president of engineering with equipment maker WaterÂ*Furnace, says, "The ground's there all the time. It's great for heating and it's great for cooling. All I've got to do is bury a plastic pipe, put fluid in and, lo and behold, I've got a great system."


                            How Geothermal Happens

                            * In the ground: A water-filled, closed loop of 1-inch high-density polyethylene (HDPE) pipe ferries heat between the earth and the house. Pipes descend 4- to 6-inch-diameter vertical wells--the number and depth depend on the house's site and size--before ganging together in a header and bringing lukewarm water in through the basement walls. Drillers backfill each hole with bentonite grout (or new enhanced grouts, engineered with fly ash) to maximize thermal conductivity.

                            * In the house: Pumps cycle water through the pipe loop to the heart of the system: the geothermal unit, which acts as furnace and air conditioner. This machine uses refrigerant and the temperate water from the underground pipes to heat or cool air. The air is then circulated through standard ductwork. With a device called a desuperheater, the unit uses excess heat to warm up domestic hot water at no added cost. The results feel the same as those from any standard forced-air HVAC system.

                            The Flow


                            Air in the ducts (1), refrigerant in the geothermal unit (2), and water in pipes (3) flow past each other like interlocking gears. Water brought from underground transfers heat to the refrigerant, or absorbs heat from it, depending on the season. Like an air conditioner, the unit compresses or expands the refrigerant to raise or lower its temperature. Finally, the refrigerant, now heated to 180 F or chilled to 40 F, fills condenser/evaporator coils. Air in the ducts blows across the coils to be cooled or warmed, then flows through the house.

                            The Supplies

                            * The bit: This mud-drilling bit grinds soft earth and funnels it back into hollow, 20-foot drill-shank sections. Corkscrew auger bits, in contrast, pound through solid rock. A new mud bit spinning at 1000 rpm, pushing downward with between 300 and 500 pounds of pressure, is good for five 150-foot holes.

                            * The pipe: Water-filled HDPE pipes absorb heat through their walls. This sawed-off cross-section shows two pipes fused in a butt joint made by pressing the molten edges together at over 500 F. The joint, stronger than the walls of the pipe itself, resists rust, rot and leaks for a purported 200-year life span.

                            * The unit: A combined furnace and air conditioner, the geothermal unit manages all-season climate control from the basement. Using the same principles as a refrigerator, which removes heat from food, this machine and the buried pipe remove heat from the earth or from the house. Wired to a 50-amp circuit, it works without venting, combustion or risk of carbon-monoxide poisoning.

                            The Setup

                            Vertical coils (1) fuel a system by using less total HDPE pipe than horizontal coils (2), in which loops of pipe fill shallow trenches exposed to constant heat just below the frost line. In pond systems (3), a blanket of water insulates coils anchored on racks. Hard ground can inhibit deep digging, stopping Colorado installers like Jim Lynch from doing simple vertical work: "Texas, Nebraska--that's some easy drilling down there," Lynch says. His clients receive options 2 and 3. If an existing system gets a geothermal upgrade, it may operate as geothermal 90 percent of the time, while the old boiler or furnace fires up only on the coldest days of the year. The payback period on retrofits averages 12 to 15 years; on new installations, it can get as low as three to six.


                            Money Saved

                            A typical 2000-square-foot home in Commack, N.Y., was recently retrofitted with a geothermal system. Tax credits, the inefficiency of the existing system and a low-interest loan combined to create immediate savings. The monthly payment is now $24 lower than the old monthly HVAC expense.

                            Installation cost: $30,000 -- $11,000 (tax credit) = $19,000
                            Annual costs: $3945 (old system) -- $2076 (geo) = $1869 saved
                            Payback period: $19,000 / $1869 = 10.17 years
                            Monthly fuel costs for old system: $329
                            Monthly geothermal costs: $173 (power) + $132 (loan) = $305

                            Geothermal Misconceptions

                            1. It's a geyser. Hot springs and other steamy subterranean liquids are not related to residential geothermal. Those are unusual local seismic circumstances. Home systems work everywhere.

                            2. The water table is in the way. Installers drill straight through it. On Long Island, where the water table is just a few feet below the surface, saturated sand makes for some of the best drilling and most efficient heat transfer possible.

                            3. It generates electricity. Industrial-scale geothermal power plants can generate electricity. Home systems don't--but they do save electricity (or fuel) by replacing conventional home heating and cooling with more efficient equipment.

                            Comment

                            • #134
                              Re: The Elusive Canadian Housing Bubble

                              i have had an open loop geothermal heating/cooling heat pump system for almost 5 years. my total energy cost/year [electricity+oil back when i burned oil] has been 40% lower than the average of a few years prior to installation. otoh, the system is complicated and finicky, requiring much more maintenance and attention than one would have hoped.

                              Comment

                              • #135
                                Snatching the pebble!

                                Originally posted by GRG55 View Post


                                Brings a new meaning to "retirement fund"...



                                I think the strategy in Vancouver rests on the assumption the Chinese are going to provide "retirement fund" liquidity for the locals as they relentlessly buy up every last home, apartment, condo, duplex, garage, teepee and birdhouse in southern B.C. After all, the worker's paradise the Left Coast of Canada has become will make them feel right at home (although the unfettered access to political satire and internet porn might confuse them initially)...

                                Is there not some truth in this? When I visited Vancouver in the mid 1990's, the word was that people from Hong Kong were buying up everything. I have never seen numbers, but aren't there enough scared millionaires in China to buy up the entire west coast of British Columbia?

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