TheChek News Flow

These climate-friendly heating-and-cooling systems are drawing support from states, cities, utilities and developers

Stephanie Farinelli and her husband never thought they would buy their first home in a subdivision. Then they found Whisper Valley, an enclave nearly 20 miles outside downtown Austin, Texas.

All of the houses in Whisper Valley have solar panels, heat pumps—and a geothermal borehole around 350 feet below ground. They are connected to a communitywide geothermal grid that pulls heat from the ground to warm buildings in cold weather and pumps heat out of buildings and back to the ground to cool them in hot weather.

Drawn to the environmental appeal and promised energy savings, the couple bought a home in the community last year. Farinelli, a 54-year-old software developer, says they pay a flat $70 a month for the geothermal system and around $60 a month on average for electricity for a roughly 2,000-square-foot home, about 50% less than what they paid for electricity at a smaller rental apartment in Austin. Another plus: There are no noisy outdoor air-conditioning condensers.

“It’s just so quiet,” she says. “You can hear the cows mooing down the street. It’s crazy.”

Whisper Valley is part of a new wave of projects linking buildings together in so-called thermal energy networks. These systems, which offer a reliable, efficient and climate-friendly alternative to fossil-fuel-based heating and cooling, haven’t been widely deployed in the U.S. yet. But as the U.S. moves toward a goal of achieving net-zero emissions by 2050, some states, cities, utilities and developers are taking a closer look, attracted by the technology’s potential to reduce greenhouse-gas emissions, cut heating bills, ease strain on the electrical grid and provide gas utilities with a new business model in a cleaner energy future.

Systems like the one in Whisper Valley harness the relatively stable temperature below ground to provide heating and cooling to buildings. On cold days, fluid flows through a closed underground pipe loop, absorbing heat from the earth and moving it to and from connected buildings, where a heat pump concentrates and converts that energy into hot air or hot water. On hot days, the system works in reverse, pulling out heat from buildings and storing it underground.

Ground-source heat pumps, which run on electricity, and are the most efficient heating and cooling option on the market. And when they are configured into networks they can become even more so, allowing buildings to share heat with each other and store it underground for future use.

Many thermal networks rely on geothermal energy, but they can be designed to exchange heat with other sources, too, such as sewer systems, data centers and bodies of water.

Thermal networks are sprinkled throughout the U.S., including on some college campuses. Now, fueled in part by federal and state incentives encouraging the expansion of low-carbon energy, gas utilities are starting to explore the feasibility of replacing some of their natural-gas infrastructure with thermal energy networks.

Proposals for utility-scale pilot projects are in the works in Massachusetts, New York and Minnesota, according to the Building Decarbonization Coalition, with one project, in Framingham, Mass., scheduled to come online in June. At the same time, around 24 gas utilities, covering more than 40% of U.S. natural-gas customers, have joined the Utility Networked Geothermal Collaborative, an informal industry group exploring how they can function as geothermal providers, the decarbonization coalition says.

The Framingham project, the first of its kind in the U.S., strings together a neighborhood of 31 residential buildings and five commercial buildings and will serve around 140 customers to start. Eversource ES 1.19%increase; green up pointing triangle, the New England utility behind it, says the project has estimated costs of $14 million after federal and state tax credits for geothermal.

In New York, meanwhile, Consolidated Edison has three projects that have been approved for full design, including one in Manhattan’s Chelsea neighborhood that would use excess heat from a data center to provide hot water to 372 apartments, and heating and cooling for 72 apartments in four nearby multifamily housing developments. On hot days, the system would pull hot air out of the units and into the network to cool them.

Data centers make sense as an energy source because more are getting built and they usually run 24/7, supplying “very high-quality waste heat” that is dependable and at a high temperature, says Alexander Buell, Con Edison’s director, portfolio planning and analysis.

New York is among a few states that have passed legislation mandating that large utilities propose thermal-energy-network projects.

Eversource is still determining how rates would look under thermal energy networks. For now, the company plans to charge customers a flat rate of $10 a month for residential heating and cooling, says Nikki Bruno, vice president of clean technologies at Eversource. Customers also will have to pay for the electricity to power the heat pumps, which the utility installed.

Bruno says geothermal networks make business sense for gas utilities because they require similar skills for installing and managing long-lived infrastructure. The pipes, made out of plastic and metals, have 40- to 50-year lifespans, and the geothermal boreholes can last up to 100 years or more. There are currently fewer safety requirements compared with natural gas, but regulations are still being developed.

“[When] we saw the pipe for the network go in the ground, it felt very, very familiar,” she says.

Unions representing pipe fitters see the potential, too.

“Geothermal energy will not only help us reach a net-zero economy, it will create good-paying union jobs in the process,” says Wendell Hibdon, director of energy and infrastructure for the United Association of Union Plumbers and Pipefitters.

It isn’t often that you see gas utilities, unions and environmentalists on the same page, says Zeyneb Magavi, executive director at HEET, a nonprofit pushing to replace natural-gas infrastructure with geothermal networks.

When it happens, “you just get a kind of momentum we are not used to seeing,” she says.

Still, getting a geothermal network off the ground faces a number of challenges, including high upfront costs, which can vary, depending on geological conditions for drilling, how many geothermal wells are needed, the energy efficiency of the connected buildings, the climate and other considerations.

Generally, the balance of withdrawing and depositing heat might not be optimal in climates where you need the heat or cooling constantly throughout the year, says Rob Best, an associate at engineering consulting firm Arup. “It’s more of a battery—you are taking some out and putting some back,” Best says.

The networks also are better suited for more energy-efficient buildings constructed in the past 20 years, he says, because heat pumps don’t have to work as hard.

How quickly larger-scale projects will pay off in energy savings remains to be seen, but college campuses that have networked geothermal give some idea. Colorado Mesa University, which deployed a geothermal network in 2008 that it is in the process of expanding, says the system produces $1.5 million energy savings a year and paid for itself within 11 years. In addition to geothermal, the university’s system stores and withdraws heat, as needed, from an Olympic-size swimming pool.

In Whisper Valley, new homes sell for around $300,000 to $600,000, and home buyers can get a one-time tax credit of $10,000 via the 2022 Inflation Reduction Act, according to Douglas Gilliland, managing director at Taurus Investment Holdings, the developer. He says there is around $25,000 to $35,000 worth of clean-energy investments per home, including for geothermal and solar.

The community, which sits on around 2,000 acres, is still in its infancy with around 500 houses currently. Within 10 years, developers plan for 5,000 single-family homes, 2,500 multifamily units and 3 million square feet of commercial space, such as grocery and convenience stores.

Taurus aims to build more geothermal communities across the U.S., including an apartment complex in Florida, according to Gilliland, who says he is talking with developers, state governments and cities nationwide who are interested in the model.

“Builders have been trying to find ways to make their homes more and more efficient,” he says. “By using geothermal, it really takes the pressure off the builder in coming up with expensive ideas.”