Energy Dept. Announces $50 M in Grants to Propel Geothermal Energy Technologies

The US Department of Energy is offering nearly $50 million in grants to help increase geo-thermal power's share of the U.S. energy marketplace.

The funds are part of the economic recovery package passed into law shortly after President Obama took office earlier this year, and of $84 million in stimulus dollars that the department is aiming at expanding the potential and use of geothermal energy.

Secretary of Energy Stephen Chu announced the funding during a visit to WaterFurnace International, a manufacturer of geothermal heat pumps, based in Fort Wayne, Indiana. “The heat from the Earth represents a significant energy resource that can be tapped to reduce emissions contributing to climate change." said Secretary Chu in a statement. “Expanded use of GHPs in the United States will create new jobs for engineers, manufacturers and technicians while at the same broadening our nation’s clean and renewable energy portfolio.”

According to the Department of Energy, geothermal pumps are more energy-efficient and require less maintenance that the air-source heat pumps found more often in homes and businesses. Thus can power buildings equally while reducing the total energy demand, lowering utility and upkeep bills. The geothermal energy powers the pumps, which can then support both heating and cooling systems.

WaterFurnace International estimates that using GHPs can reduce costs by up to 70%.

The Energy Department is offering funding for projects that combine improvements to existing geothermal heat pump technologies for use in both residential and commercial buildings, with innovative business and financing strategies. The department is also looking for proposals to create tools that can help assess, and ultimately lower, the lifecycle costs of potential geothermal power projects.

Energy also wants to grant funds toward creating a national certificiation and credentialling program for the geothermal heat pump industry, which would increase consumer confidence in using geothermal energy systems.

Geothermal heat pump shipments have more than doubled in the past decade, according to the Energy Department's Energy Information Agency: from 41,679 in 1999 to 86,396 in 2007, the last year for which a figure is provided.

In 2007 geothermal provided about 5% of the nation's renewable energy supply, which itself was 7% of the nation's energy supply.

WaterFurnace, founded in 1983, would seem to represent the kind of business Secretary Chu hopes to spark with this and other Energy Department grant programs being funded with federal stimulus dollars. The company, founded in 1983, currently employes around 282 people. It has added around 60 positions since this time last year, according to Andy Fracica, the company's director of marketing.

The company's stock is currently trading at around USD 24 (ticker symbol: WFI on the Toronto Stock Exchange), and has a market value of about USD 297,000. Fracica states that the company has no debt. According to its annual report, WaterFurnace also had cash reserves of around USD 6 million at the end of 2008. "We had a pretty good year last year," says Fracica.