There are 23 known manufacturers of geothermal heat pumps based in the United States, and almost all have their units tested and certified under standards for water-source, ground-water-source, ground-source and direct expansion technologies, according to annual data released by the Department of Energy’s (DoE) Energy Information Administration. The report is based on manufacturing shipment information supplied by the companies.

“As consumer concerns continued over the rising cost of energy and tighter budgets, many savvy businesses and residential owners started to look for a more efficient way to heat and cool their buildings and homes through clean alternative energy sources; one of these was geothermal heat pump systems,” the report notes.

The growth is due, in part, to the Emergency Economic Stabilization Act of 2008, which provides long-term tax incentives to encourage the use of renewable energy technologies, including geothermal heat pumps for homes and commercial applications.

To qualify for the 10% investment tax credit for a business or the 30% credit for residential consumers, a closed-loop geothermal heat system must have a coefficient of performance of at least 3.3 or 3.6 COP for an open-loop system. The geothermal heat pumps must also include a desuperheater to heat domestic water.

While total shipments grew 40% to 121,243 units, capacity shipped also rose 43% to 416,105 tons. However, “this was accompanied by growing pressures in the geothermal heat pump industry, such as manufacturers’ backlog orders, a shortage of trained installers, and high investment costs for consumers,” the report notes.

Most geothermal heat pump manufacturers are planning to introduce new models this year, which indicates that “increasing public demand for alternative energy systems has created business opportunities for the geothermal heating and cooling industry, and the manufacturers have positioned themselves to supply a wide range of geothermal heat pumps designed to meet the needs of virtually every size and type of building.”

In 2008, direct employment in the manufacturing industry accounted for 1537 person-years, an increase of 26% from 2007. Total revenue for shipments was US$319 million last year.

“As prices for electricity rise, and prices for such winter heating fuels as natural gas and oil show significant volatility, geothermal heat pumps for heating and cooling are becoming increasingly viable,” the report explains.

Shipments to the residential sector accounted for 47% of the domestic market, with the balance being shipped to the commercial sector. Manufacturing facilities in Indiana and Oklahoma accounted for 56% of production.

The export market accounted for 16% of total shipments, mainly by sales to Canada (81%), and more than half of domestic shipments going to 10 states: Florida, Illinois, Indiana, Iowa, Michigan, Minnesota, Nebraska, New York, Ohio and Pennsylvania.