CRD CRD Economic Analysis & Project Management

Question 1

What financial metric compares the total lifecycle cost of a geothermal system against a conventional HVAC alternative over a specified period?

Accepted Answer

Life Cycle Cost Analysis (LCCA)

Answer

Simple payback period only

Answer

Gross domestic product index

Answer

Loan-to-value ratio

Question 2

The US federal residential clean energy tax credit currently allows homeowners to deduct what percentage of qualifying geothermal heat pump installation costs?

Accepted Answer

30% of the total installed cost with no cap through 2032 under the Inflation Reduction Act

Answer

10% up to a $500 maximum

Answer

50% but only for new construction

Answer

15% for systems installed after 2020

Question 3

Which factor most significantly affects the simple payback period of a residential geothermal heat pump compared to a high-efficiency gas furnace and central AC system?

Accepted Answer

The local cost of electricity versus natural gas and the heating/cooling load of the home

Answer

The color of the heat pump cabinet

Answer

The brand of the thermostat used

Answer

The number of bedrooms in the home

Question 4

What is a common range for simple payback periods for residential geothermal heat pump installations in the US after applying federal tax credits?

Accepted Answer

5 to 15 years depending on local energy prices, load, and installation cost

Answer

Less than 1 year in all US climates

Answer

30 to 50 years making them economically unattractive

Answer

Exactly 7 years for all installations

Question 5

When developing a project budget for a residential geothermal installation, which cost category is typically the largest single line item?

Accepted Answer

Ground loop drilling and installation

Answer

Thermostat and controls

Answer

Permitting fees

Answer

Antifreeze fluid cost

Question 6

How does including utility rebates in a geothermal project's financial analysis affect the customer's net installed cost?

Accepted Answer

Utility rebates reduce the net installed cost, shortening the payback period and improving ROI

Answer

Rebates increase the taxable income but do not reduce out-of-pocket cost

Answer

Rebates only apply to commercial installations, not residential

Answer

Rebates extend the payback period by increasing paperwork costs