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Some Like It Hot: Subterra Is On A Mission To Bring Geothermal Exchange To U.S. CRE


Subterra Renewables has a portfolio thick with projects that demonstrate the successful use of geothermal exchange to heat and cool commercial and residential buildings.

With more than 25 years of experience in the field, the Toronto-based company has completed hundreds of geothermal exchange installations in Canada, impacting more than 7M SF of multifamily and other commercial asset classes. Subterra estimates that this has resulted in the reduction of nearly 13 million pounds of greenhouse gas emissions for its customers. 

But even with that track record, Subterra Chief Revenue Officer Kareem Mirza said he still has some educating to do when meeting with new clients, particularly as Subterra expands in the U.S. market. A common question he hears: What exactly is geothermal exchange?

“Whenever the word ‘geothermal’ comes up, folks immediately think about geothermal energy, such as what you’ll find in Iceland,” Mirza said. “And that's not what we're doing.”

Rather than harvesting the Earth’s naturally occurring internal heat, Subterra’s technology performs what Mirza describes as a “simple heat exchange process.”

Geothermal energy extraction requires wells to be drilled to depths of about 2 miles to access the Earth’s warm brine. By contrast, geothermal exchange wells are drilled to considerably shallower depths — about 1,000 feet — which is just enough to reach a level where the Earth’s ambient temperature is a steady 55 degrees Fahrenheit.

“The Earth is not actually acting as an energy source for us; it's more like a thermal battery with positive and negative flows, where through heat exchange we are storing heat in the ground in the summertime and pulling out the cool energy,” Mirza said. “And then in the wintertime, we're storing cold energy in the ground through a fluid medium such as glycol, and what we're extracting is basically the heat that we stored underground during the summer.”

Mirza said geothermal exchange allows commercial buildings to greatly lessen their dependence on fossil fuels. It also can provide a comfortable interior environment that individual tenants can adjust to fit their own preferences.

“We charge a flat annual fee that covers as much heating and cooling as you or your tenants want, and there’s no need for us to meter it,” he said. “With a centralized heat pump in the building, my neighbor in the next unit could be blasting their space with cool air and I could be heating mine at the same time. It doesn’t matter because the system is designed to balance itself out and the end user’s bill is not going to change depending on their preferences and usage.” 

This approach might represent a paradigm shift for a building owner or developer in the United States that depends on a natural gas or other fossil fuel providers for their heating and cooling needs.

Mirza said another question he frequently hears concerns how much risk a customer might be taking on by converting to a thermal heat exchange system from a traditional utility. 

The answer is not much.

“As part of our energy-as-a-service utility model, or EaaS, we will first do a desktop study of the property, followed by a full feasibility study, including a test borehole thermal conductivity test, and then perform detailed design work,” he said. “And we will do it all at our own risk and with no capital outlay whatsoever required from the customer.”

Mirza said Subterra’s goal is to provide geothermal heating and cooling at less cost than a conventional system. 

“We provide the exact same service level of heating and cooling as a utility but with a few fundamental differences,” he said. 

Mirza said one difference is that Subterra’s agreements include a price guarantee to cover all liability, maintenance, operations and equipment replacement costs. At the end of the term — typically between 30 and 50 years — Subterra can transfer ownership of the entire asset over to the client if they want to take it over.

It helps that Subterra has a great deal of in-house expertise and owns its own fleet of more than 65 drilling rigs. Those engineering and construction capabilities help answer a third common question: How difficult is it to introduce or integrate a geothermal energy system into a new or existing building?

Mirza said Subterra works to make this design-build step seamless for the client.

“Before the developer’s construction manager is even on-site, we will drill the entire borefield for the geothermal wells and install our pipes,” he said. “If it's a high-rise that needs a certain amount of underground parking, when they come in to do their excavation, they won't even know that we're there because we will have already established all of the exchange loops in the ground much deeper than the foundation. Later, we go in and connect everything to the new building’s mechanical room.”

Subterra can perform retrofits on existing buildings by drilling adjacent to the structure, such as from a nearby parking lot. The company is in discussions with U.S. landlords in places such as New York City to do just that.

One advantage available to U.S. building owners is the availability of government incentives such as from the Inflation Reduction Act, which will provide a tax credit to building owners that convert to renewable energy and lessen their dependence on the power grid.

“What we’re saying is that you don't need to rely on dirty fossil fuels because we can achieve all of your heating and cooling needs sustainably,” Mirza said. “And it doesn't matter if it's a single-family home, a 70-story building or a campus-like environment with multiple buildings — we can achieve all of that through geothermal energy exchange.”

This article was produced in collaboration between Subterra Renewables and Studio B. Bisnow news staff was not involved in the production of this content.

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