Worth the cost of bringing Natural Gas to Property?

shouldibuildDecember 28, 2012

We are looking at building on 15 acres that is close in to the city, but the property and building site sits off the road quite a ways. We would need to run electricity about 500 feet and gas more than 900.

How much is it worth to bring natural gas to the building site compared to an alternate fuel source? I suppose we could get a small propane tank for the gas range and heat off electric or we could heat off propane. I have read the cons on here about heating using propane. What other options should I consider?

All in this will be a $650K to $750K project so I do not want to be pennywise and pound foolish. Interested in your thoughts. Thanks

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DLM2000

Have you asked the utility company what the cost would be to bring service to the house? For me, it's first choice if available even if the upfront cost is pricey. But I'm betting it's more affordable than you might imagine - they want your business month to month and to get that they make the infrastructure appealing.

    Bookmark   December 28, 2012 at 1:50PM
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kirkhall

In my area, running the gas line to the house is free (that is where they put the meter). Have you checked, and verified that the whole 900 feet would be your install?

(That said, for us, electricity is as cost effective as gas when using ductless heat pumps to heat/cool rather than a gas furnace... So, your area of country will really matter).

    Bookmark   December 28, 2012 at 3:14PM
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david_cary

You know, if you live in Florida, it wouldn't be worth $2000 but if you lived in Maine, it might be worth $10000.

So the first question is where are you building? The next question is what are the electric rates? If your electric rates are very high, the value of NG is greater.

Generally if the cost is really high, you are better off spending the money on a really good shell or doing geothermal although most of the time a good shell makes more sense.

Propane rarely makes sense as the sole heating source but it can have value where you have frequent power outages.

    Bookmark   December 28, 2012 at 3:26PM
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shouldibuild

Live in Knoxville, TN.

Residential Electric Rate Cost per Kilowatt Hour (Cents) as of 11/1/12 Single Family Dwelling 9.364

Residential G-2 Rate Cost per Therm as of 11/1/12
Winter 0-30 Therms* $1.2372
Winter 31+ Therms $1.0250
Summer 0-50 Therms $1.0585
Summer 51+ Therms $0.9399

Does this information help?

Still waiting on quotes to install utilities. Would geothermal make sense?

    Bookmark   December 28, 2012 at 6:19PM
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athensmomof3

I would investigate geothermal for sure. And definitely get quotes. The level of your build suggests it is longer than a 5 year house in your area. . . perhaps a permanent house. We couldn't make geothermal work for us but we have a large footprint and a much more expensive build . . . payback was too long. We did not have to subtract the cost to bring utilities to the house though, which may have made a difference. Our big savings was installing a well, which made sense for us in a very huge water cost area. It was a 10k expense but our water bills have been under 100.00 for the first time since we have lived in this town.

Point being - what makes sense in some places doesn't make sense in all. A real grasp of costs/benefit is important .

    Bookmark   December 28, 2012 at 7:36PM
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crazy_in_mason

When I built a year and half ago, I had a similar dilemma. I had to run the gas 450 feet to have it. I was quoted $15,000 to do so. Doing the math on geothermal. I built a 4600 square feet house in Cincinnati. The quote on the traditional HVAC was $12,000. The quote on qeothermal was $45,000. You still get 30% back as a federal tax credit not deduction. It is the last line on income tax forms. I got $13,500. If you do the math, traditional would have cost me $27,000. Geothermal cost me $31,500 after rebate. My electric bill has never been over $200 since I moved in. My gas bill in my 6 year old 2700 square foot house was at least $250 in the winter. That did not include my electric. I figure the payback on the difference is less than 2 years. Around here you also have to worry about someone stealing your outdoor air conditioner unit for the scrap metal. I did install a 110 gallon propane tank for cooking. It cost $1000 with the first fill. I have only used 35 gallons so far.

    Bookmark   December 28, 2012 at 11:37PM
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david_cary

Crazy - first you say $12k for traditional and then $27k - one seems too low and one too high...

Stealing the outside unit - now that is crazy....

Knoxville helps - what elevation are you at? I tend to think you are a little warmer than Asheville.

I see these things as 4 options
1 - conventional construction, NG heat. Big variable here is NG pipe cost
2 - conventional construction, geothermal. Big variable is local geo costs. Lots of land means it could be relatively inexpensive and the way to go
3 - Superinsulated construction with air source heat pump. You get the need for heat so low that it just doesn't matter. You are probably looking at $8k or so but you can't have huge walls of windows. Designing for solar gain is free but may not work with view - important in all designs but particularly when not using NG or geo.
4- Conventional construction and air source heat pump - least expensive upfront and most expensive long term. Financially - this still maybe the best. I hate to say it but it might but depends on your length of outlook. If we say the other 3 are equal in running costs, this might be $500 a year more. I live in Raleigh (a little warmer) and have 5000 sqft of conventional construction but energy star and it would be about $500 in my house (I have dual fuel and I used $200 in NG in my worst winter, just $100 last year). Electric resistance as backup would be 3.5 times the cost of NG.

Of course if you want gas fireplaces and cooking, you have to price out the propane tank option. A lot of companies give you the tank for free but not if you aren't going to use much - ie not heating the house with it. You also have to either bury it, hide it with vegetation or live with looking at it.

You shouldn't forget hot water as a cost differential and plan on how you use it. If you have energy saving appliances and take short showers with the flow regulators intact and you have a small family - the electric cost is around $200 a year but NG would be $100. If you take hot baths nightly and your 4 kids do also, that number could be $1000 with NG being half. Geo can help here but increases upfront costs.

The gov says electric resistance for hot water is $500 a year with your rates. But that is on an average house with average appliances. And includes people living further north with uninsulated copper pipes. Locally a Progress Energy study found it to be $300 a year - but it was on people who were interested in solar so it was a skewed population. You have to look at your own lifestyle as the hot water can be a big variable.

Propane is a little more expensive than electric resistance for you.

    Bookmark   December 29, 2012 at 6:53AM
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shouldibuild

Thanks David. I always appreciate your insight.

    Bookmark   December 29, 2012 at 7:06AM
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chibimimi

David, I think Crazy meant $15,000 to run the gas line + $12,000 for the system = $27,000 overall cost.

    Bookmark   December 29, 2012 at 9:05AM
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mrspete

You have to approach it as a math problem -- just as Crazy in Mason has done. You have to know the numbers for your area, and you have to figure out your "payback time".

    Bookmark   December 29, 2012 at 9:15AM
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zone4newby

I think you need to start with an estimate from the gas company. In our area, the same company provides gas and electric and will run them together, saving some cost. The first 100 ft are free, so it would be free if we were in a development, but as we're building on acreage and are the only house on our side of the street, it's going to cost quite a bit more. And we've got extra charges if they end up running it after the ground freezes...

An issue with comparing LP and natural gas is that the prices can fluctuate, so I'd look at least the prices over the last few years before I made a decision.

    Bookmark   December 29, 2012 at 10:43AM
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david_cary

Chibimimi - I didn't realize that. Makes a lot more sense.

I'd argue that at those numbers, superinsulation and air source heat pump was definitely the way to go. You can cut the heat loss in 1/2 for a house for a lot less than $19k and you will come out ahead of geothermal. But there is the hot water also that geo can help with.

As far as LP prices and NG prices, the crystal ball assumes very cheap NG prices for a decently long time. LP is always going to be higher - just how much will depend.

    Bookmark   December 30, 2012 at 5:42AM
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