Geothermal heat pumps are famously efficient, yet the first bill still scares off most buyers. A New Hampshire startup, Dig Energy, thinks the choke point isn’t the heat pump at all—it’s the hole. The company has built an ultra-compact, water‑jet drilling rig that it says can cut borehole costs by as much as 80%, a swing big enough to reset the economics of shallow geothermal in homes, offices and data centers.
Why geothermal stalls on cost
Heating and cooling account for roughly a third of U.S. energy use, according to the Energy Information Administration, and in some data centers cooling can approach 40% of electricity demand in certain seasons, industry surveys suggest. Ground‑source heat pumps tackle both with high coefficients of performance because they move heat to and from a steady underground temperature.
The catch is up front. The “ground loop” — the vertical or horizontal piping that exchanges heat with the earth — can represent around 30% of a system’s installed cost, based on estimates cited by the International Ground Source Heat Pump Association and U.S. national labs. Mobilizing large truck‑mounted rigs, navigating tight sites, and restoring disturbed land all add to the bill, even before drilling starts.
The payoff, however, is substantial at scale. Modeling from Oak Ridge National Laboratory has highlighted how widespread geothermal adoption could shave billions from grid operating costs by smoothing seasonal peaks. The obstacle is deploying enough boreholes, in enough places, fast — and cheaply — to matter.
A pint‑size, water‑jet drill built for cities
Dig Energy’s answer swaps traditional rotary bits for a high‑pressure water‑jet that erodes and fractures material ahead of the drill. The prototype is strikingly small compared with the truck‑scale rigs common in the trade, a deliberate choice to slip down side yards, into alleys, and onto constrained commercial lots where conventional machines can’t practically operate.
In testing near its New Hampshire base, the team has bored through soils and common rock types — from clay and sand to limestone, slate and granite — while producing narrow, notably straight holes. Straighter wells can be placed closer together without crossing, increasing loop density on tight parcels and opening projects that previously failed on footprint alone.
The company’s founders, veteran hardware entrepreneurs Madden and Thomas Lipoma, explored water‑jet concepts that have simmered in academic literature for decades but never translated into compact, affordable field equipment for shallow geothermal. Much of the industry’s tooling has been borrowed from oil and gas — powerful and proven, but oversized and overcapitalized for 200‑ to 500‑foot building loops.
Dig Energy says its approach reduces not only the drilling time but also mobilization, transport and site restoration costs, which together can make or break bids. The rig is still pre‑commercial; the company plans pilot projects and aims to sell units to established drillers rather than operate as a contractor itself, lowering the barrier for firms that can’t justify multimillion‑dollar equipment purchases.
What cheaper holes would change
For homeowners and small buildings, the installed cost of a ground‑source heat pump can run into the tens of thousands of dollars, according to the National Renewable Energy Laboratory. Federal tax credits and some state incentives help, but the biggest sensitivity remains drilling. If a compact rig can trim that line item and eliminate the need for heavy trucks, projects that once penciled “almost” may finally clear.
On commercial sites, especially in dense cities, a smaller footprint unlocks otherwise impossible layouts. Closer borehole spacing and less laydown area means fewer parking lot closures, less traffic disruption and more predictable schedules — all factors developers and facility managers prize as much as raw dollars.
There’s also a labor angle. A lighter, modular rig could broaden the pool of contractors able to enter the market, easing bottlenecks that have slowed adoption in regions with limited geothermal expertise. That matters as utilities pilot neighborhood‑scale thermal networks in states like Massachusetts and New York, where demand for drilling capacity can spike rapidly once projects win regulatory approval.
Caveats and engineering questions
Water‑jet systems bring new trade‑offs. Managing fluid, cuttings and mud on small sites requires disciplined containment and filtration. Regulators will scrutinize water sourcing and disposal. Contractors will want data on rate of penetration across geology, nozzle and pump wear, energy use per foot, and long‑term reliability. Straightness is an advantage, but maintaining azimuth and verticality at depth will need to be demonstrated at commercial scale.
Still, the direction of travel aligns with what the market needs: lighter, cheaper, easier‑to‑deploy tools tailored to the shallow depths where building‑scale geothermal thrives. If Dig Energy’s rig delivers even part of the claimed cost reduction in the field, it could reset how developers, drillers and utilities think about the ground loop — from a cost premium to a competitive advantage.
A complementary path in the geothermal boom
Deep, enhanced geothermal players like Fervo and Quaise are chasing high‑temperature heat for electricity. Shallow systems target the far larger, everyday market for space conditioning. Both matter. As the International Energy Agency has noted, cutting heating emissions is essential to reach climate goals, and ground‑source heat pumps are among the most efficient tools available.
Geothermal isn’t too expensive by nature — it’s too expensive to start. Shrinking the rig that makes the hole may be the most pragmatic way to change that.