Can a Geothermal System Increase a Home’s Value?

House on a river

Geothermal systems are eco-friendly, innovative, long-lasting and energy-efficient. Can geothermal heat pumps also increase home value?

This is a question that many homeowners ask themselves when they’re considering a geothermal system for their house. If you’re a homeowner who may soon install a geothermal system (or a seller looking to market a property with a geothermal system already installed), it’s important to understand the reasons why many buyers might pay a premium for a home with geothermal.

Buyers Value Savings

When buyers start shopping for homes, one of the factors they take into consideration is how much money they’ll have to spend to maintain the house. Homes with new, long-lasting appliances, and appliances that use less energy will often attract buyers. On average, installation of a geothermal system can help a homeowner save between 40 and 75% on their HVAC energy consumption. Buyers will naturally choose a home that has up-to-date appliances that will cost less money per year to operate.

Think of it this way: The average home buyer will live in a home around 13 years. The amount of savings they will experience over that time compared to a traditional HVAC system will be significant. If a home’s listing price is increased by $5,000 due to the presence of a geothermal HVAC system (compared to where it would be listed without this upgrade), and an interested buyer estimates they will save at least $10,000 over the time they spend in that home, it might be hard for them to justify the purchase of a similar home without this upgrade.

More Buyers Want Green Homes

A significant number of buyers are attracted to homes that are good for the environment. This usually means shopping for properties with modern appliances. Older air conditioners tend to use a lot of electricity, while older furnaces can use a lot of electricity, oil or natural gas. This puts a strain on the electrical grid. Homeowners with older properties can make their home more attractive to buyers by replacing their old systems with new innovative technology. Additionally, geothermal systems significantly reduce a home’s carbon footprint.

This is just one of the many subjective elements of the home buying and selling process. Some buyers value environmentally-friendly features much more than others–just as some may absolutely want columns by the entryway. Understanding the general trends in a market can help sellers ballpark the impact of this as well as other features in their home.

Analyzing the Market

Homeowners who want to find out how much they can increase their home’s value by installing a geothermal system may be able to do so by researching homes in their neighborhood, community, and region. Geothermal systems can raise a home’s value because buyers like to purchase properties that will save them money and help protect the environment. However, measuring the exact impact of a geothermal installation (or any home upgrade for that matter) can be a challenge.

Data of recent home sales can be accessed with the help of a real estate agent. Furthermore, an agent can help you identify comparable homes or “comps” to more accurately assess the market.

Home values are typically measured by comparing similar properties in the same community, and finding a large sample of homes with geothermal systems in one area can be a challenge in some instances. Still, similar homes without this upgrade can be analyzed and, using the annual or monthly savings from their geothermal system, homeowners can roughly project what their home might be worth in the eyes of a buyer.

A good place to start is with the yearly savings of a typical Dandelion Geothermal customer. On average, Dandelion customers can save up to 50% heating and cooling costs each year the system operates. For a prospective buyer who intends to stay in their home for 20 years for example, that adds up to $45,000 in total savings.

For more information on the costs, savings, and other benefits of geothermal energy, speak to an expert and see if your home qualifies.

New call-to-action