Geothermal Payback

borisswortJune 10, 2009

Currently I pay approximately $2,000 a year for Natural gas. I use gas for my 14-year old, probably 80% efficient, furnace, gas dryer, water heater and stove. I got a ball park estimate of at least $30,000 for a geothermal system with a desuperheater. I would guess I might save $800 a year with a geothermal system, so even with the tax credit, I am looking at over 20 years for payback. Could this be right? I don't currently have air conditioning, so that would be an added plus. Am I missing something?

Thank you for reporting this comment. Undo

Without knowing much about your home or climate - it's hard tp say . It also
makes a difference if you must replace a system or not . For me - I was
building a new home that was 6k + sqf and my options were propane or
electric . I would have to put in a system no matter what and my monthly bills
would have been much higher because of my square footage . I spent 22k
for my system which included cooling . For me - I am getting my payback
immediately . Natural gas is about the cheapest heat you can get - so if you
are only paying 2k a year now - it really doesn't make financial sense to do
it . You already have the ductwork , so adding central air conditioning and
upgrading your insulation , windows , etc. would be a much better investment
IMHO . If you replaced your current system with a more efficent one would
probably save you the same 800.00 a year at a much lower cost . Geothermal
is not for everyone or every house . Sometimes it makes sense and sometimes it doesn't . Good Luck

    Bookmark   June 10, 2009 at 5:49PM
Thank you for reporting this comment. Undo

If your motivation for installing geothermal is purely financial and not environmental, perhaps you should look to other options, unless you have deep pockets and can take the really long view of things.


    Bookmark   June 11, 2009 at 6:30AM
Thank you for reporting this comment. Undo

Depth of drilling can be a big cost factor.

    Bookmark   June 11, 2009 at 7:00AM
Thank you for reporting this comment. Undo

Don't use just one ballpark estimate. Get 2 or 3 bids from HVAC contractors with GT experience. When you get those bids, have them give you a bid to replace the HVAC system with HE NG & Electric AC units (assuming you have AC) and an option for them to do GT instead. You should look at the delta cost from each contractor before you make a financial assessment. My delta cost from our HVAC contractor was 15,000 for a 12 ton GT system (3 GSHPs: 2x 3ton and 1x6 ton) not including the digging of the pit (but it did include all loops, pumps etc).

The break even point should not be as long as 20 years, but it could be if you have a difficult site. The cost of a GT heat pump vs. the cost of a gas heater/electric AC for the same BTU output is not a significant difference. But the cost of the ground loops, pumps, plumbing, excavating/wells for the GT system is a large difference - and that cost depends on your site location, soil type, and specific configuration. Unless you have an expert scope it out and give you comparitive bids both both types of systems, you can't do an accurate cost analysis.

My break even for the GT is between 7 and 10 years including the 2000 tax credit. It should not have been that long but I ran into a problem (giant boulders! - lots of them). I also hasd a difficult site to work with. The original plan was a break even in 3 to 5 years.

Even if you do go with a GT system and if you live in a very cold climate I would consider a 2 stage GT system with NG as the backup. My system has electric Aux heat and there is an issue when we loose power. I have a genny but not big enough to run the giant toasters in the Aux heat (I use wood burning fireplaces as a backup heat source instead). If you have NG as a backup, then a very small backup genny would allow you to run the system with the 2nd stage heater and fans.

Good luck.

    Bookmark   June 11, 2009 at 9:57AM
Thank you for reporting this comment. Undo


Something is amiss here if I understand you correctly. First of all, letÂs make sure your meaning of delta cost is the difference between a non-geothermal system and a geothermal system of equal capacity. And that delta cost was only $15,000.00 for a 12 ton system.

If I understand you correctly, thatÂs way low compared to any other cost comparisons that I have seen including my own! If you donÂt mind me asking, what price did you get for a conventional 12 ton system?

I do understand that it didnÂt include digging the trenches or drilling.


    Bookmark   June 11, 2009 at 5:07PM
Thank you for reporting this comment. Undo

The other consideration before going to GT is the expertise of the installers. If the system is not optimally designed and installed, it will not produce the projected savings. And, unfortunately, GT expertise is scarce, although it is improving.

    Bookmark   June 12, 2009 at 9:11AM
Thank you for reporting this comment. Undo

The price for 12 tons of HE LP gas heat plus electric AC was around 30,000. It was York equipment (3 heater units and 3 outside AC units) and this included everything except some some zoning on the second floor and quiet vent fans which I added later. The cost for the GT system - same BTU output - was 45 grand - Econar Geosource 2000 equipment, 3 GSHPs (2 - 3 ton and 1 - 6 ton).

The people who did the work have been doing GT for over 20 years and they did a great job. We had an initial issue with the 6 ton unit, but after that was rectified, the system has performed flawlessly for over 1.5 years.

The GT price did not include the cost to dig the horizontal pit (the excavation costs) but it did include all the pipes, pumps, plumbing etc. This is where I ran into the glitch. The initial cost for the pit was 2500. When it was done - 17 grand! The actual cost to dig the pit, move the mountain of dirt from point A to Point B and then Back Again was around 10 grand. The cost for 1 foot of stone dust at the base of the pit (to protect pipes from rocks) was around 3 grand and the cost to rent the track hoe to move the massive boulders was around 4 grand.
Hopefully you would not run into this issue - I built on the side of a mountain and hit a lot of large boulders.

SO the total delta cost was around 32 grand for the GT system, 30 grand when I took the tax credit.

I have an 9100 sq ft house (5800 on 2 levels + 3300 sq ft basement that is conditioned but only partially finished). It costs under 4000 per year to heat & cool it. My peak electric bill in the dead of this past winter was $450 BUT over 100 of that is lights/steamshower/ etc. So my cost to heat this monster was 350 peak. LP would have been 2x that at the price per gallon this winter.

I plan on living in this house for 15 to 17 years. The GT will certainly pay for itself by then but I estimated about 10 years to breal even.

    Bookmark   June 12, 2009 at 10:03AM
Thank you for reporting this comment. Undo


All I can say is WOW, those are some cheap prices. I have an upcoming project almost identical in size to your home and my lowest of 4 bids on a propane system was $65K and they were not the most experienced company. Of the three good companies bidding, the lowest was $75K and IÂm a contractor. Even now with VAC dropping prices due to the lack of work, your prices are much lower.

What is more amazing is your prices for your geothermal. My price for an 11 ton system a few years ago was double over a conventional system.
Can you email me through this forum so we can discuss this if you donÂt mind?

    Bookmark   June 12, 2009 at 12:22PM
Thank you for reporting this comment. Undo

You might consider instead of dong the geothermal do a package of insulation and weatherization projects. These might well save you just as much heating (and maybe cooling) money as the heat pump at less cost. They will definitely save more carbon.

Our house heat bill is well under half what is was when we moved in due to more insulation in many areas, window treatments, infiltration fixes, and a bit of solar. Total cost was about a tenth of what you are talking about (with me doing the work). This stuff also qualifies for the rebate. And, you won't have to replace the compressor on your insulation in 15 years :)

Just a thought.


    Bookmark   June 12, 2009 at 9:46PM
Thank you for reporting this comment. Undo

Like sniffdog said, get 3 bids. I found they vary greatly. Like I mentioned in a previous post, The 2100 Sf house I built was $18,000 for everything. After $2000 rebate and tax credit, we were comparable in cost to a standard high efficiency system.

    Bookmark   August 4, 2009 at 3:22PM
Sign Up to comment
More Discussions
if you must use solar, consider this option
first of all, for renewable energy i much prefer the...
Evaluating a building site for solar?
We are considering purchasing some land, contingent...
Energy usage has increased since net metering installed
My electricity energy usage had never exceeded 700kw...
Radon system
Can somebody tell me why there's condensation outside...
Geothermal in south bay area
I am wondering if anybody has feedback on geothermal...
People viewed this after searching for:
© 2015 Houzz Inc. Houzz® The new way to design your home™