Solar technologies get way too much attention when, in reality, the benefits today of geothermal energy and putting “geoexchange” systems in homes and businesses are much more compelling. The payback is shorter, and avoidance of greenhouse gas emissions is greater. That said, I kind of know the reason why geothermal gets less respect. For one, investors love patent-protected technologies, and the different approaches to making solar cells and the variety of materials used creates a lot of opportunity in a booming market. Geothermal system are more expensive upfront, and the installation itself is labour-intensive and complex. Most of the cost, in fact, comes with drilling and laying tubes in the ground. The heat pump systems at their core are simple devices — easy to mass-produce but little in terms of intellectual property worth protecting. That said, I think investors are going to wake up and begin seeing an opportunity in this market, similar to what we’re seeing in the area of solar thermal systems (i.e. Ausra, EnerWorks, et al.)

One driver will be a large-scale embrace of the technology by mainstream home developers, extending geothermal out of the arena of retrofits and custom builds to a much larger market. A sign of things to come? I have a story in the Toronto Star today about plans to build a community north of Toronto composed of 150 homes, each with geoexchange systems to provide cooling and heating. The systems are expected to reduce energy consumption in each home by 65 per cent compared to your typical HVAC system. It’s not the government pushing this project. It’s not a community co-op led by some treehugging architect. It’s one of the largest home developers in Ontario — Reid’s Heritage Homes. I’ll let you read my story, but basically the company did focus groups and found that potential homebuyers were willing to pay a premium to get the environmental and long-term financial benefits of having geothermal heating and cooling in their home.

Reid’s Heritage is working with Clean Energy Developments (CED), an Ontario-based startup that was created to help major home developers embrace renewable technologies such as geothermal and solar. CED is composed of engineers, architects, project managers, etc… that will work with home developers, basically hold their hands, as they walk this normally conservative group through what’s necessary to do large-scale installation of geothermal and other renewables. So far, developers have been receptive to CEDs advances. Reid’s Heritage is also considering geothermal for a 1,000-home community north of Toronto and apparently a number of other developers are thinking of making similar moves. Suddenly, after decades of operating in niche territory, geothermal is gaining some mass-market respect.

Want more proof? WFI Industries Ltd. (known at Waterfurnace) is a leading maker of geothermal heat pump systems in North America. The company released its third-quarter 2007 financial results this week, and had this to say: “Sales and profitability continued to increase despite the decline in residential construction in the USA. Year to date sales for the company are up 17.3 per cent and sales for the trailing 12 months were $102 million, exceeding $100 million for the first time.” Profits were up 10 per cent, and the company’s share price this year has jumped 50 per cent — beating out the overall Cleantech Index.

Again, this is amid a declining home construction market in the United States.

Another boost that we could see, at least in Canada? Peter Love, chief energy conservation officer for Ontario, recommended today that the provincial government work with the federal government to introduce a voluntary labelling system for buildings (homes and business) that would rate energy efficiency. This would make it easier for homebuyers to know the long-term operating costs of the properties they’re looking at. Eventually, the idea is that this voluntary system would morph into a mandatory system (like Energy Star for appliances). Real estate search engines (like the MLS system) would be forced to adapt by including energy ratings on all their listed homes.

I’m all for that.