Brown Ranch will utilize geothermal heating system eligible for significant federal incentives
While more than double the cost to install over other options, incentives could bring a return on investment in as little as five years
The Yampa Valley Housing Authority Board decided on Thursday, Feb. 9, that the Brown Ranch will use a ground source heating system — a key early decision in planning for the development that could deliver its first units by the end of 2026.
The system was chosen in a unanimous vote of the board and follows the recommendation passed along from engineering consultants that have been studying the 2,300 unit development’s energy plan for several months.
While more expensive up front, the geothermal system could save millions in energy costs for future Brown Ranch residents. With a flood of potential government incentives for the eco-friendly system, it may also be the cheapest to install.
“The fundamental of everything that we’re working on is how do we bring those first costs down so that we can deliver initial affordability,” said Jason Peasley, executive director of the housing authority. “We’re hopefully creating a situation where we’re going to bring the first costs down and it’s going to be more affordable on the backend.”
The Brown Ranch energy plan is being finalized by the engineering firm Page Consultants and is expected to be made available to the public on the housing authority’s website next week.
The recommendations from Page approved by the board suggest the housing authority should start the system in a sort of pilot program serving the first few blocks of the Brown Ranch, and create an optimal phasing plan for how the rest of the system would be built out.
That would also allow the housing authority to switch heating types for future phases of the Brown Ranch if a geothermal system doesn’t pan out as hoped.
“We’re intending to put every effort we can to delivering on the geothermal system because it’s that perfect intersection of affordability and sustainability,” Peasley said. “That meets all of our objectives.”
The decision on the heating system is important now because it ties into how the Yampa Valley Electric Association will need to improve the electric grid in the area to serve the Brown Ranch. Some of the equipment needed like a new transformer could have lead times approaching three years.
On Thursday, Mike Beyer, program specialist with the co-op, said YVEA was willing to do something out of the ordinary and start the process of purchasing equipment for those upgrades even though there is still planning work needed.
“(YVEA) is very committed to being a partner with the housing authority,” Beyer said.
The other options considered were an all-electric heating system or a primarily electric system that would be augmented in colder months with natural gas. Each of these has lower initial costs — about $22 million for all electric and $30 million for a gas-augmented system — but significantly higher annual energy costs.
Page’s analysis shows installation of a geothermal system would approach $58 million, but annual energy costs would be about $3.4 million in 2022 compared to nearly $6.5 million for all-electric and $5.8 million for gas-augmented.
Page found that without any incentives, the geothermal system would deliver a return on the initial investment within 11 years compared to the cheaper to construct all-electric option. With a conservative approach of potential incentives of just 30% the installation costs, that return would materialize within five years.
The decision to go with a geothermal system comes as both the federal and state governments have increased potential incentives for this kind of project.
Paul Boney, energy and transportation director for the Yampa Valley Sustainability Council, said he thought it was a “slam dunk” that the housing authority could get 40% of the system’s installation costs covered by the federal government.
Depending on other factors with how the system is built and because the Brown Ranch is within a census track considered a coal community, that support could increase to 50%, Bony said.
“The state also has an incentive program they’re going to announce in a couple of months,” Bony said, adding that Gov. Jared Polis has been supportive of Colorado Mesa University’s geothermal system.
Routt County Commissioner Tim Redmond said he is working with other Northwest Colorado communities to get grant support for energy projects, and he felt that was a positive sign for the Brown Ranch.
“This is a priority for our governor,” Redmond said. “They have been asking me how they can help the Brown Ranch … so I do believe I can get you some money.”
To reach Dylan Anderson, call 970-871-4247 or email danderson@SteamboatPilot.com.
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