Written by Doug Hundley
Full article is available on Healthcare Business Today.
Hospital administrators face significant challenges in managing 24/7 operations, ensuring patient care, and maintaining financial stability. Energy-efficient retrofits, such as geothermal HVAC systems, offer a proven solution to reduce costs, improve operational resilience, and enhance the healing environment.
Healthcare facilities account for nearly 10% of energy use in U.S. commercial buildings, contributing 8.5% of national greenhouse gas emissions and incurring $8 billion in annual energy costs. Geothermal HVAC systems, which leverage the earth’s stable temperature, deliver 50-70% energy cost savings compared to traditional systems. These advanced upgrades not only reduce environmental impact but also improve operating margins and take advantage of financial incentives, such as tax credits, to accelerate return on investment (ROI).
With hospital margins under increasing pressure, particularly in rural areas, geothermal retrofits provide a strategic path to cost reduction and operational efficiency. The Inflation Reduction Act (IRA) further enhances the affordability of these upgrades, offering substantial tax incentives to support long-term sustainability initiatives.
A recent example is Margaret Mary Health's geothermal conversion of its Cancer Center Central Plant. The project replaced a 210-ton air-cooled chiller with 68 geothermal wells and three 60-ton heat pump chiller modules. CMTA utilized IRA funding, securing a 40% tax credit and achieving $413,000 in savings. Initially budgeted at $500,000, the project received Board approval to expand to a $1.1 million investment, with a projected four to five-year payback through IRA incentives and energy savings. The retrofit resulted in an 80% reduction in natural gas consumption, increased heating and cooling efficiency, and extended equipment lifespan—vital improvements for rural healthcare operations.
This project demonstrates how healthcare facilities can successfully leverage IRA funding and engineering expertise to implement energy-efficient, resilient upgrades. By adopting geothermal technology, hospitals can significantly reduce costs, strengthen operations, and achieve critical sustainability objectives, reinforcing their ability to deliver high-quality patient care in a cost-effective and environmentally responsible manner.