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Your state or utilities in it may offer rebates for installing geothermal systems. Among those that do: California (Redding), Connecticut, Minnesota, New Jersey, New York (Long Island), Texas (Denton) . . .

More to be added soon.

In the meantime, you can check dsire if you live in another state and want to see what it has to offer.

Keep Your Eye On The Gas Chart

About two-thirds of American homes use natural gas to heat their homes. The graph below shows what it cost residential customers over the past 29 years (1981-2010), according to the Energy Information Administration. Obviously, it's been a rather stomach churning and expensive ride the last five of them. Nor is it likely to be any smoother or cheaper in the future.

Most homeowners therefore have a good incentive to find ways to lower their costs by becoming more efficient in their use of heating fuels - or better still eliminating them altogether. Geothermal heat pumps, for example, run on electricity, a much more stable commodity. Other electric source heating, like baseboard heating, are also worth a closer look.

From the Ground Up: Lowest HVAC Bills

A Geothermal heat pump system is the most energy efficient equipment or appliance you can buy to reduce your energy costs.

Geothermal heat pump (GHP) systems are the first choice of equipment for a zero energy home because of how much they can reduce your largest energy expense. Geothermal heat pumps may be as much as 70% more efficient than convential boilers and furnaces in heating your home and up to 50% more efficient than traditional air-conditioning units or central air when cooling it.

You'll not only save money, but you'll also have more of the benefits you get with good insulation, like dry air, quiet and moderate temperatures throughout the year. An extra benefit is big savings on your hot water by adding an attachment called a desuperheater, which is discussed on the water heater page.

Heat From the Earth - Free

The reason geothermal pumps offer such big savings is simple. They don't use any increasingly more expensive natural gas, oil or other fuels, as do the vast majority of homes. In winter, heat is pumped up free from the earth, through plastic piping, in water circulating underground - where the temperature remains between 45 and 55 degrees - and distributed by a fan through the house's ductwork as air warmed to around 95 degrees.

In the summer the process is reversed when the heat in your house is dumped back into the earth, much the same way a refrigerator exhausts heat through coils on the side facing the wall. Your only on-going expense is paying for the electricity that drives the pump, compressor and fan, but at a much lower rate than with air-conditioners because of the GHP's greater efficiency. (It's easier to send heat into that same 45 to 55 degree ground than that 80 degree and up summer air outside your home).

You can forget regular maintanence too, except to change a filter every few months. The pipes may last for 50 years without your having to go near them.

You will however, have to pay more for a geothermal system than you would with conventional heating and cooling equipment. While the cost of what you put in the house is about the same for both traditional and geothermal systems, the final bill is higher because of the outside costs of laying the ground pipes. A trained professional installer using backhoes or drilling equipment must be contracted with to do the job.

The payback period for the extra expense - around half the total cost - depends on a variety of factors, including the type of system, the cost of hiring an installer, the location of the home, the size of the house, the amount of fuel that it uses and, of course, the price of fuel. Typically, it takes from 3 to 10 years or, again, you may want to use financing solution.

Tack on the cost of a geothermal system onto the mortgage of a new home and your energy savings may very well be enough to take care of the extra in monthly payments. You can also try the same strategy with an existing home by refinancing an old mortgage or taking out a home equity loan or line of credit. For example, if you have an average U.S. utilities bill, you may count on having savings from $50 to $70 a month and then be able to use your savings to make loan payments.

The Right Pump and Contractor

Installers generally stick to one brand of pump to get better pricing from the manufacturer, so the installer and pump tend to be a package deal. The standard for installers is certification by the International Ground Source Heat Pump Association. Click here to find installers in your area.

The most desireable pumps carry an Energy Star efficiency ratings. Sixteen make the grade, though by reputation and performance figures Water Furnace and ClimateMaster are the leaders of the pack. Click here for the complete list of Energy Star GHP.

Still, shop for the installer, get the best deal you can and generally be prepared to accept what pump that comes with the deal. Not to worry though. It's highly unlikely that they're not working with an Energy Star pump maker since the 16 Energy Star GHP makers are virtually the entire market. Indeed, you stand a good chance of getting a Water Furnace and ClimateMaster since those two plus FHP and Trane, 2 other Energy Star holders, are clearly the market leaders in sales.

Your Choice of Loops

Installers generally recommend four types of piping sytems (see figures below)Closed vertical and horizontal are the most common. The other two are open vertical and pond loops:

• A vertical closed ground loop is the urban choice or for anyone who only has little land around their home. Holes may be drilled down 200 feet or more to tap into a consistent heat source. It is, however, the most expensive option.
• A horizontal closed ground loop system about six feet below the surface will likely cost less, but you need about a half acre of space around an existing home for the straight piping option. The slinky version can get by with less space, but costs a bit more to install. New home builders can save on both cost and space because they can build on top of the loop therefore saving space and save much of the cost of digging if a foundation is being laid below ground level. Rocky ground, like in New England, will drive up the cost of digging.
• A vertical open loop system is drilled much the same way as a water well and may be used when there is access to an aquifer. These may do double duty in rural areas by providing homes with drinking water.
• Pond loops are the least expensive, but as you need a waterfront home installing one is a rare exception to the ground loops. No digging is involved. The loops are just laid in the water slinky-style, which must be no less than eight feet deep throughout the year. Fish love it. They call the loop home.

Making the Best of Second Place

Choosing an alternative to a GHP will make it difficult to get to zero energy. It costs 50% more to run an efficient and traditional heating and cooling system than it does to operate an efficient GHP annually, according to a DOE study, but traditional heating and cooling systems are undeniably cheaper and easier to buy and simpler to install with many more authorized installers to pick from.

Inertia is another factor to overcome. Many new homes automatically come with boilers or furnaces and central air. Buyers are also familiar with tradtional systems. GHP adds to the problem with multiple name confusion. Geothermal or ground should be thought of as the same, but air heat pumps shouldn't and aren't discussed here. They're not big sellers and when you need them to be their most efficient - extreme heat or cold - they are at their most inefficient.

In recent years, there has been significant improvements in heating and cooling equipment efficiency. Homes more than 20 year old typically have had heating equipment that had Annualized Fuel Utilization Efficiency (AFUE) ratings of 65%. In 1992, Federal law required a minimum of a 78% AFUE. Today, you can get above 95%. A/C equipment has also become more efficient as measured by the higher numbers for the Seasonal Energy Efficiency Ratio (SEER), which are used in rating central air, and Energy Efficiency Ratios (EER), which is used in rating room units.

Cooling is the easier of the two to buy. An air-conditioner means pretty much the same thing to everyone. It's a machine that uses electricity to take the heat out of air. You have many energy efficient brands to choose from and the only fork in the road is deciding on the type of equipment, not energy efficency.

You'll be spending more to install central air into a new or existing home than you would with if you choose to buy a room A/C. Make the choice between the two however and you then need to pick the right-sized system or units with the highest EER and SEER ratings that you can afford in relation to other upgrades and makes sense for where you live.

A minimum EER of 11 and SEER of 14 rates an Energy Star rating (as of January). Indeed, all new central air's manufacturered after 2006 have a SEER of 13 and it would make sense to have much higher in the deep south and southwest. For example, a near zero home in Tucson Arizona has a central air with an 18 SEER, but you can get A/C with EER up to 21 and SEER to 23. Highly-rated central systems include:

• Carrier 38TDB Infinity Series (SEER 21)
• Lennox XC21 (20.5)
• Bryant 180 Evolution Series (20)

Don't forget: you must take into account who installs your central air. If they're not good, your central air won't be either. Discuss with them, among other things, how high you want to go with efficiency. You may question the value you get out of squeezing every drop of efficiency you can get from an A/C for its price.

Heating, on the other hand, offers some real choices and they are more critical since a lot more heating (still) than air-conditioning goes on in this country. For example, experts generally consider a climate to be "cold" if the number of degree days is 3000 or more, according to Lawrence Berkeley National Laboratory paper. In the U.S. that covers all of the northeast, midwest, most of the west and some of the south - as can be seen from following the 3000 degrees line in the map below.

The cost of heating is critical too. Running heating equipment costs four or five times what it costs to running A/C, says the DOE.

Buyers may chose between boilers and furnaces and the heat they provide may stem from a variety of energy sources, including electricity, oil, natural gas, solar and propane. The combination that offers the greatest energy efficiency is the natural gas condensing boiler. A condensing boiler or furnace, simply put, doesn't waste heat as does an ordinary boiler or furnace.

Condensing boilers are more efficient than condensing furnaces because it takes less work to heat water, which is what boilers do, than it does air, which is what furnaces do. Boilers may also be used to heat your tap water, improving overall efficiency and lowering costs by combining space and water heating.

Finally, you need a boiler if you want radiant heat. It's a more efficient way of delivering heat than through ducts, which is how hot air is delivered, because as the hot air travels through the ducts there is inevitably leaks along the way. Fans of radiant heat, which rises through the floor where pipes carrying warm water are laid, say it's also more comfortable than duct heat. However, always wary of costs, radiant heat is more expensive than forced air heating.

Natural gas is more accessible than oil, it's chief competition, and is cleaner, which virtually means more efficient since over the course of time dirt is going to build up in an oil system.

The case for other alternatives are weak too. Wood chips and pellets find favor with some homeowners because they are not fossil fuel, but it would take some doing for the country to stack up wood energy. Nor should anyone think of it as a pure source of energy. Wood has emissions problems of its own.

Solar thermal heat is the hope of the future, but doesn't cut it now. While there are no fuel costs, the equipment costs are prohibitive, the energy source is not dependable (i.e. clouds) and the payback is too long to expect any widespread acceptance any time soon.

Top rated natural gas condensing boilers include:

• Weil-McClain Ultra (AFUE: 95% to 98%; $6,427)
• Monitor mz 25c (AFUE: 95%; $3,192)
• Viessmann WB1A 8-24 (AFUE: 95%, $2,687)

GHP are not for the do-it-yourselfers and you're likely to get the pump your professional prefers to install, but it's still nice to have some cost benchmarks. For example, the GHP accounts for about 30% of the cost of the entire system, according to a study by the TVA and the University of Alabama.

A number of different types and sizes of pumps can be found on the Internet with their prices. Most homeowners or buyers will find their needs met with units ranging in price from $2,500 to $7,500:

A ClimateMaster 3.5-ton Tranquility Series unit with an Energy Efficiency Ratio (EER) of 26.5 and a Coefficient of Performance (COP) - the cooling and heating measures used for GHP - of 4.4 has been spotted on Ebay selling new for $5,635.

As noted in story at left, ClimateMaster is a top brand. This model's COP and EER are near the upper limit for GHPs. A 14.1 or 16.2 EER, depending on the system, or a 3.3 or 3.6, also depending on the system, will get you an Energy Star rating. Three tons works for an average-sized home. (The per ton cost drops with increasing size).

A McQuary 5-ton Energy Star-qualified unit with an EER as high as 17.6 and a COP as high as 4.9 sells for $3,789(up $200 from earlier this year).

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The next two systems are no longer available, but they will be kept here for comparison

A ClimateMaster 3-ton Tranquility Series unit with an Energy Efficiency Ratio (EER) as high as 29.1 and Coefficient of Performance (COP) - the cooling and heating measures used for GHP - as high as 4.8 has been spotted on Ebay selling new for $6,800.

A McQuay 3-ton Energy Star-qualified unit with an EER as high as 17.4 and a COP as high as 4.9 sells for $3,455 (up $200 in the last few months).

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