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Utility Mandates and Standards for Geothermal Heating and Cooling

States can increase the demand for geothermal heating and cooling technologies through utility policies such as energy efficiency portfolio standards (EEPS), geothermal infrastructure access improvements, and renewables portfolio standards (RPS).These types of policies can also enhance energy diversity and security, promote economic development, and help mitigate climate change.

Energy Efficiency Portfolio Standards

Nearly 20 states have established EEPS, which require electric and/or gas energy utilities to achieve a certain percentage reduction in energy use from energy efficiency measures. In order to meet EEPS requirements, utilities can offer financial incentives to encourage customers to reduce energy use and upgrade top energy-efficient equipment.

Geothermal Infrastructure Access

Utility-led geothermal infrastructure access is based on the principle that geothermal resources frequently outlast the buildings or facilities they serve, but continued maintenance of the geothermal system will facilitate long-term access to the resource. For example, if a utility installed and maintained a large ground source heat pump loop system or geothermal reservoir access, capital investments would be rate-based and the infrastructure would be treated the same as any other utility pipeline, transmission and distribution, or other long-term capital investment.

Renewables Portfolio Standards

RPS require utilities to supply (or displace) a certain amount of electricity sales using renewable resources and often involve the development of a market for renewable energy certificates (REC). RECs are acquired by power producers or retailers subject to the RPS and in some cases, geothermal heating and cooling technologies may be used to generate RECs for the purpose of compliance with RPS policies.

For example, Arizona's Renewable Energy Standard (RES) calls for 15% of the retail electric load to be derived from renewables by 2025. 30% of the renewables must come from distributed renewable (DR) resources. Residential systems must supply one-half of the DR resources, with non-residential, non-utility applications providing the remaining one-half of the requirement. Broad range geothermal heating and cooling technologies qualify for compliance with the RES.

Learn about other policy options.