New Colorado neighborhood could offer glimpse into the future of home energy use

A new housing development south of Denver is testing a cheaper way to bring geothermal heating and cooling to regular homes, not just custom builds. Geothermal startup Dandelion Energy and homebuilder Lennar finished nearly 100 homes at Ken Caryl Ranch in Littleton, Colorado, each with its own ground-source heat pump. These systems pull steady underground temperatures (around 50 degrees year-round) through a single borehole, 200 to 500 feet deep, to heat and cool the house. Dandelion says drilling many boreholes across one neighborhood at once, before foundations are poured, cuts installation time and cost roughly in half compared to doing it one house at a time. The company plans to install the systems in more than 1,500 Colorado homes over two years and eventually scale to 10,000 homes a year nationwide.

Ground-source heat pumps use less electricity than standard air-source heat pumps, especially during cold snaps, which helps ease strain on the power grid. But they're still rare: just over a million U.S. homes have them, and the upfront cost for a new home averages around $25,000. A federal study found they could be cost-effective in every state once incentives are factored in.

In Colorado, Xcel Energy offers builders about $25,000 per home to offset the added cost of ground-source heat pumps in new construction, and the state gives a $2,000 tax credit for the systems. Other states, including Maryland, have their own incentives, so it's worth checking what's available locally. Commercial geothermal projects can also get federal tax credits covering 30 percent or more of installation costs.