Geothermal Heat Pump Payback

Forecast how long it takes a geothermal heat pump upgrade to pay for itself. Enter your installed cost, incentives, and yearly bill reductions to see the simple payback timeline in years before energy savings overtake the upfront spend.

Total turnkey investment including drilling, loop field, heat pump, and labour.
Federal, state, or utility rebates and tax credits that lower your upfront bill.
Expected reduction in yearly heating and cooling energy costs compared with your current system.
Money saved each year on service contracts, filter changes, or repairs.

Educational information, not professional advice.

Examples

  • $28,000 installation − $6,000 incentives with $2,500 energy savings and $400 maintenance savings ⇒ 7.59-year payback
  • $35,000 installation − $9,000 incentives with $3,100 energy savings and $500 maintenance savings ⇒ 7.22-year payback
  • $42,000 installation − $12,000 incentives with $3,800 energy savings and $600 maintenance savings ⇒ 8.00-year payback

FAQ

Does this include tax credits?

Yes. Enter all tax credits, rebates, and grants in the Incentives field so they are subtracted from the upfront cost.

Can I use negative incentives?

If additional site work increases your cost, leave incentives at zero and add the extra expense to the Installed Cost input.

What if my annual savings are uncertain?

Use conservative assumptions or run multiple scenarios with high and low savings to see how the payback period shifts.

Should I include maintenance contracts?

Yes. If you expect service agreements or filter replacements, subtract those expenses from the maintenance savings input so the payback reflects real operating costs.

Does the calculator handle hybrid systems?

For dual-fuel setups, include only the portion of costs and savings attributable to the geothermal system to avoid overstating the return.

What if energy prices rise?

Model a conservative case and an aggressive case by increasing the annual savings input—higher utility rates shorten the payback period.

Additional Information

  • Simple payback = (Installed cost − Incentives) ÷ (Annual energy savings + Annual maintenance savings).
  • Include loan interest or financing fees separately if you are not paying cash—simple payback does not account for financing costs or inflation.
  • Evaluate long-term economics by pairing this with net-present-value or internal-rate-of-return tools such as the Net Present Value calculator.
  • Cross-reference with calculators like Solar Panel Savings, Heat Pump vs Gas Furnace Breakeven, and Electricity Cost per Month to compare other efficiency upgrades.

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