Blue Sky Power

Geothermal Energy (continued)

The underground reservoirs of steam and hot water that power electricity generation are primarily located in the western states. Of an estimated 8,000 megawatts of electricity being generated each year worldwide this way, 2,800 megawatts come mostly from those 18 geothermal power resource sites in the American west. In Northern California, 7 percent of the region’s electricity comes from the plants at The Geysers -- the largest cluster of geothermal electricity generating stations in the world. Electricity from The Geysers complex is sold at just $0.03 to $0.05 per kilowatt hour.

However, unique geological sites where there is super heated water and steam or magma and hot rock to tap into aren’t the only places where geothermal energy can be harnessed for use.

Geothermal heat pumps that take advantage of the ground’s nearly constant, year-round temperature of between 50º and 60ºF below the very near surface frost line. This technology can be put to use virtually everywhere for space heating and cooling, not just in the West. For this reason, the use of these economical, completely renewable energy systems is on the rise.


A geothermal heat pump system uses up to 70 percent less electricity than a traditional heating and cooling system. That means greatly reduced utility bills for property owners and institutions that install these pumps.

Geothermal heat pump systems also have a long life -- decades -- in part because they have relatively few mechanical parts to wear down and break. And because they draw fully on a clean, natural and renewable source of energy, there are no greenhouse gas emissions from these systems.

Likewise, geothermal electricity generating plants emit no greenhouse gases and harness a fully renewable resource.


Over the last two decades, the cost of generating power from geothermal resources in the United States has decreased about 25 percent. The real, leveled costs for geothermal electricity generation are between $0.045 and $0.07 per kilowatt hour -- making geothermal power competitive with some fossil fuel generating facilities, only without the air pollution.

For businesses and institutions considering installing a geothermal heat pump system, the federal Investment Tax Credit (ITC) is 10 percent and is available for systems installed through 2016. Through the U.S. Department of Energy’s Loan Programs Office and Geothermal Technologies Program, there is also a loan guarantee initiative than can cover up to 80 percent of a project’s total cost.


The goal of the geothermal energy industry and the U.S. Department of Energy is to achieve a geothermal energy life-cycle cost of electricity of $0.03 per kilowatt hour. Electricity costs in this price range are anticipated to result in 10,000 megawatts of new geothermal power capacity installed by U.S. firms over the next decade.

A 2006 Massachusetts Institute of Technology report that analyzed the future prospects of geothermal power in the United States concluded that, over the next 50 years with a reasonable investment in research and development, that geothermal power could produce 100 gigawatts of power. A 2006 report from the National Renewable Energy Laboratory (NREL) estimated that by 2025, more than 100,000 megawatts of geothermal electricity would be in production and that heat pumps and direct-use systems at businesses, institutions and homes in the U.S. would add another 70,000 megawatts of energy.

As the technology develops and the costs come down to build and install geothermal power systems and geothermal electricity generation plants, and as fossil fuel-based energy costs rise, the prospects are strong that geothermal energy production in the United States will continue to expand. Blue Sky Power can serve as your institution’s guide in analyzing the feasibility of a geothermal project at your facility. Blue Sky may also be able to structure financing to help your institution benefit from geothermal energy with little or no capital outlay.

More information

To learn more about geothermal energy – the costs, the technology involved, available tax credits, etc. visit the following websites:


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