A house construction firm has partnered with an energy company to integrate geothermal heating into new homes in Colorado.

Dandelion Energy, a geothermal heating and cooling company based in New York, has teamed up with Lennar to integrate the heating system into more than 1,500 new Colorado homes built by Lennar over the next two years.

On Wednesday, the two companies gathered with officials from Xcel Energy, the Colorado Energy Office and Gov. Jared Polis to cut the ribbon on the first home built around the geothermal system at Lennar’s Ken-Caryl Ranch New Home Community.

“I was jealous when they first started,” Polis said of Dandelion Energy’s genesis in 2017. “They were offering solutions in other states. We’re glad that they’re not only in Colorado, but in Colorado in a big way because, in fact, they’re celebrating that this is their largest single announcement of homes together.”

Officials said the system reduces the need for traditional heating systems and outdoor air conditioning units.

Here’s how it works, according to officials. It works through a heat pump that is connected to a ground loop that extends between 300 and 500 feet below the ground. The loop then circulates water, which remains around 50 degrees year round to transfer heat between the ground and the indoor heat pump.

In the winter, the water absorbs the heat from deep in the earth, bringing it up to extract into the home. In the summer, the system does the opposite, with the indoor heat pump removing heat from the air and circulating through the ground loop, cooling it.

Regarding energy, the system only uses electricity to run the pumps, lowering utility bills to around half the price, according to Dandelion Energy founder Kathy Hannun.

The system runs at an estimated rate of $4 of energy in return for every $1 of energy spent by the owner. Installation prices are around the same as other unit types, as well, with maintenance widely available for any HVAC technician, Hannun added.

“Today marks a turning point for our industry,” Dan Yates, CEO of Dandelion, said. “What’s making the difference is that while geothermal has always been far and away the cheapest solution to operate, it has not been the cheapest solution to install. That’s what is changing with this project.”

Yates pointed to Colorado’s state tax credit for geothermal heat pumps and Xcel Energy’s geothermal and energy efficient building rebates significantly reducing for the cost for homebuilders.

The project comes on the heels of Polis’ “The Heat Beneath Our Feet Western Governors’ Association Chair Initiative in 2023,” in which the governor aimed to make the heating source more accessible to the state.

The inclusion of geothermal systems is also essential for the state’s goal to achieve net-zero greenhouse gas emissions by 2050, with the Geothermal Energy Grant Program awarding $12 million in grants to support the development of geothermal electricity generation and resource development.

“It’s good for our economy, good for homeowners, good for climate, good for our air quality,” Polis said of geothermal energy Wednesday.

Polis also signed a bill Monday — HB25-1040 — that redefines nuclear as a “clean energy resource,” alongside wind, solar and geothermal.

“As we move into a clean building future, they’re going to be millions of heat pumps,” Will Toor, executive director of the Colorado Energy Office, said. “So we’ll have really significant benefits for all of us in terms of saving money and the electric grid.”