As geothermal heat pumps become more popular, many homeowners may find themselves weighing the pros and cons of these systems. Often, people consider what they’ll save and for how long as a means of calculating ROI.
Well, that is certainly a great place to start. However, only focusing on this fails to take into account any potential increase in the home’s value.
Geothermal heat pumps can significantly impact the value of a home. While it can be difficult to estimate down to the exact dollar what the exact impact might be, there are a few main factors to consider that can help get you ballpark your home’s added resale value.
Demand for Green Homes
Buyers are increasingly attracted to green home fixtures. As pollution and other environmental problems become a more serious concern, many buyers find themselves seeking homes that have a smaller carbon footprint.
Geothermal heat pumps use little energy to heat and cool homes, helping homeowners maintain a comfortable house without traditional, energy-hungry forms of heating and cooling.
Since a geothermal heat pump is a relatively uncommon green home fixture, this can make any home a more desirable property for home buyers who prioritize environmentally-friendly features. In areas where demand for green homes is high, this alone may make a difference in what a buyer is willing to pay for a home.
Geothermal Heat Pumps are Long-Lasting
The average service life of a geothermal heat pump is about 25 years, and the coils (installed under the ground) can last as long as 50 years. Homeowners appreciate this durability and longevity.
Whereas a home’s air conditioner might last 15 years, and a furnace might last 20 years, the heat pump can outlast them all.
Similarly to how a buyer might react to discovering a home has a high-quality/long-lasting roofing material, buyers looking at homes with geothermal may be very tempted by the longevity of the system.
Geothermal Saves Homeowners Money
Because geothermal heat pumps use less energy, they also save homeowners money. On average, these appliances save homeowners between 30 and 60 percent on their heating and cooling costs.
Since geothermal heat pumps are also long-lasting, this means that homeowners can save hundreds or thousands of dollars over the life of the appliance.
People tend to like money-saving features, especially in their own home. People who believe that their heat pump will save them thousands of dollars while they live in their new home are more likely to bid competitively for that property.
Invisible to the Neighbors
Curb appeal is as important as ever to homeowners. Some environmentally-friendly home fixtures, like solar panels, are very prominently displayed on the home’s exterior.
While more people are coming around to the look of solar panels, homeowners or buyers who want a more traditional home are often wary of installing anything large and modern on their home’s exterior.
Geothermal heat pumps are much subtler than a home feature like solar panels. With many of the working parts located underground, geothermal heat pumps are very low-profile. This makes them a far more universally “attractive” fixture than many other types of upgrades.
Calculating Value
Calculating a home’s true market value is a bit of an art and a science. Appraisers typically use comparable properties in the neighborhood when trying to calculate a home’s worth, and so can you. However, if there are not any other homes similar to yours in the neighborhood, this may require some creative thinking. A good starting point would be to estimate:
- How long the average buyer would live in a new home?
- How much the geothermal system would save them per year?
- What kind of expected maintenance (if any) would occur during their stay?
Running these numbers can help homeowners determine a range of values. That would, at the very least, “make sense” to a buyer if it were explained to them.
As mentioned at the beginning of this article, however, resale value is just one piece of the puzzle. Don’t forget that the significant utility savings apply to you while you’re living in your home. People interested in harnessing geothermal energy at home should contact a trusted expert in their area to learn more.
By Robert Little
Robert Little is a REALTOR ® and team leader of The Little Group. Helping Las Vegas buyers and sellers navigate both simple and complex real estate questions.