Does Geothermal make sense?

sue_ctMarch 9, 2014

I need to replace my oil furnace this year. I have a relatively small, 1500 sq ft cape style house, originally built in about 1960 but extensively remodeled in about 1995 after a fire and before I purchased it. I currently have a 3 zone oil fired Weil Mclaine boiler with tankless coil hot water that must be replaced. I was given an off the cuff estimate of about 6800.00 from the person cleaning the furnace from a local company that does a lot of furnace intalls. I have no central air, an older through the wall AC in the kitchen and a few window units for other rooms. I am trying to research the feasibility of switching to a geothermal unit instead. I was given a ball park estimate of 25,000.00 to install geothermal. This is just another "off the cuff" estimate at a local home show based on the size, location and style of house I have. They estimated 60-80% savings over the cost of oil heat. That seems a little high, but I don't really know.
I currently use about 600 gallons of oil a year and the local cost of oil is almost 4.00/gallon. I have really not kept good track of my oil usage, and use mulitple oil delivery companies so it not an easy thing to calculate accurately. I have been going through about 100-125 gallons/mth in Dec, Jan, and feb, and use less in Oct, Nov, March and April. During the summer months I use very little, just for hot water. However, my electric bill rises from about 100.00 mth to about 250.00 per month due to ac costs.

I plan to have an energy audit with a blower test in the near future.

I plan to be in this house for at least 20 years. If the install does cost $25000.00 and I get a 30% tax credit, that brings the cost down to $17,500.00. (I think there is also a 1500.00 incentive from the local utility but I am not counting that right now, as well as very low interest loans to cover the cost) How do I figure it from there? If I assume I need to spend approx. 7000.00 anyway, the additional expenditure will be a little over $10,000.00. For that I will get the decreased fuel costs and a forced hot air system with central AC, and what I suspect is a much more cost effective cooling system as well.

My electrical costs depend on how you figure out the cost per KW. If I take my total bill and divide by the KW used that month it is $00.1766/KW. If I add up all the generation and delivery per kw charges it is 00.15865/Kw. The extra must be in taxes or other fees.

What else do I need to figure in? Can you heat and get HW solely with geothermal? When do you have to have an additional heating system? That might make it unfeasible.

I think this is probably my one chance to make this change since I need the furnace any way. It would not really make sense any other time due to the costs involved. I just want to be sure If I do go with such an expensive system that I am happy with it later. I had been under the impression that geothermal made the most sense with a new build. This contractor, however, estimates that 70% of their installs are retrofits. Natural Gas is not available on my street and I contacted the local gas company and found out there are no current plans to make it available here in the future.

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I am fairly confident you will not be able to get a geothermal system installed for $25,000. Are you sure this was the ball park estimate after all tax credits and incentives?

The cost of installing ground loops in CT I imagine is high. Be prepared for sticker shock when you get an actual quote.

    Bookmark   March 9, 2014 at 4:25PM
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Yes, I think part of the lower cost is probably due to the smaller house being heated. I am pretty sure he said it would only require a single vertical loop. But I will obviously have to make sure I am talking about the real cost. Many of the other estimates I have seen are for heating homes of over 3000 to 5000 sq ft. But it is only a guess on my part. The only questions they asked when I told them I needed to replace an oil fired baseboard system with the geothermal is the size and style of my home, and of coarse the location is that it in Connecticut.

    Bookmark   March 9, 2014 at 4:40PM
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As an alternative to Geo, look into Carrier's Greenspeed HP system.

Do your numbers and make comparison and justify the payback length of time.


    Bookmark   March 9, 2014 at 4:59PM
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We spent over $30,000 when we built in 2007 - that included the cost of drilling 2 wells. And we had the chases for the ductwork in place. It did make more sense than putting in oil-based hydroair and central AC that we looked at when we weren't sure we could trench with all the ledge. But that cost did not include the trenching since we were able to bring it in the same trench as well water.

Email me for some installers' names to get estimates - a well-drilling company can do the drilling, perhaps at a savings (it was for us since we were building, and they didn't hit water the first try so that became a geo well). But I'd say a retrofit will be more expensive, esp. since you will need to install ductwork to have the AC (so might as well go all forced air).

Our heat pump has electric resistance heat strips built in but we rarely use them. Electric usage does jump in the winter - esp. Feb. But not bad rest of year (goes up slightly in dog days of summer, perhaps more from running dehumidifier than AC). I did post my usage history on another thread here for someone else considering geothermal in CT.

You will need an alternate source for hot water in winter - we have 1 buffer tank that the desuperheater dumps into, then another tank that is heated by electricity, the buffer tank feeds the 2nd tank. You might be able to use just 1 tank.

Have you considered mini-splits?

    Bookmark   March 9, 2014 at 5:00PM
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My last post on the other geothermal in CT thread:

"Just got the bill from meter reading on the 18th, 32 days this Feb instead of 29 days last year (due to weekend/holiday) so bill was higher. But maybe setting Aux Heat lockout to 25 degrees (there had been no lockout set) helped. Avg temp this Feb was 22.9 degrees and we averaged 74.66 kWh/day vs last year avg temp 27.5 and used 75.10 kWh/day.

Once the average is above freezing the electric bill drops to about 60 kWh/day, then to 45-50 kWh/day when temps are in the 40's, then to 30-35 kWh/day as weather gets warmer, until we have to start running AC when average temps are in the mid-high 70's (meaning daytime highs in the mid-80's and higher - we used 39.9 kWh/day for the month we had a 10-day heat wave last year and the avg temp was 78), but still generally stay below 40 kwH/day until heating season starts again in Nov."

We've got a 2500sf Colonial.

    Bookmark   March 9, 2014 at 5:18PM
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There is a significant difference in the size system needed. My house is almost half the size, so needing only one well would make sense. I have no idea what percentage of the cost of the system goes towards the drilling and creation of the wells and materials in them. It is also possible that the price of these systems is coming down with more companies installing them and more competition. But obviously I would need a firm quote and a contract spelling out the costs. I would probably go with an electric HW heater as a supplement and low cost installation. So that is not a HUGE deal, but does add to the cost. 75 kwh/d would be a significant increase for me, but I don't heat with electric, and I would be heating a much smaller area, so its hard to compare. With my current electrical costs, that would be about 395.00 for the month of February, and my current cost was 269.00, which was very high for me because I have tried supplementing the heat with electric space heaters only in the rooms I am using. That experiment was a failure, lol. Especially since I also had a $385.00 oil bill the same month. So I guess it is significantly better than the combined 650.00+ I spent for a house almost half the size, lol. (I must laugh or I will cry).

I would love some local referrals. The contractor I spoke to at the home show has been in business locally for 14 yrs. But I never commit to anything this expensive without multiple quotes. I am in Northern CT, and the company I spoke with is from Somers, CT. Don't know how local they should be. Obviously, closer is better for dealing with any problems later.

I have not considered mini-splits, lol, what are they?

Don't know if it matters but the brochure they gave me is for a WaterFurnace 5 series 500A11.

    Bookmark   March 9, 2014 at 6:14PM
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" I would probably go with an electric HW heater as a supplement and low cost installation."

I'd suggest that you look at an electric Heat Pump Hot Water Heater, such as the GeoSpring™ hybrid electric water heater by GE. (I have an earlier model.) These are NOT low cost, however there are frequently tax credits and/or rebates for them.

My wife and I have a 50 gal unit that is more than adequate for our needs and we are saving about $40 each month in electric usage compared to our previous 50 gal electric heater.

They are noisy, not an issue for us as it is in our basement. They actually remove a couple of pints of moisture from our basement humid air each day - good - BUT need to get rid of that water somewhere. (Drain? New or existing Condensate Pump?)

It is such a small "air conditioner" that it has no measurable effect on ambient basement temperature.

There are some naysayers, but as someone that has actually owned and used one for over three years I can say down the road I will replace it with another similar unit.

I only half joking have told my neighbors I would buy them a HP hot water heater if I could be assured I'd get the electrical cost savings. (They think I'm kidding, I'm not!)

PS These things are a Lowes or Home Depot item as well as at specialty stores.

This post was edited by saltidawg on Sun, Mar 9, 14 at 18:50

    Bookmark   March 9, 2014 at 6:48PM
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Well I do like me a good tax credit. :) Thanks for the suggestion. I will certainly look into it if I decide on geothermal. I still have a lot of research to do and then estimates to get before I am at that point, though. I really hope it does work out, because I hate buying oil, lol, but I still don't know that it will. There could be too many additional costs in the long run.

    Bookmark   March 9, 2014 at 6:54PM
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"It is also possible that the price of these systems is coming down with more companies installing them and more competition."

The residential geothermal business is still very small. The typical homeowner does not have the budget to pay for it and most people don't live in a house long enough to see the pay back.

Consider the geothermal tax credit is set to expire in 2016. There is a good chance it will not be renewed. This will be a big blow to the residential geothermal industry. The company you work with this year may disappear. It is something to think about.

    Bookmark   March 9, 2014 at 7:52PM
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75 kWh/day is total electrical usage during the single coldest month of the year, but let's say baseline (ignoring greater lighting usage in winter, most of our lights are CFLs) is 34kWh/day in spring when neither heat nor AC required, the heating system requires 20-41 kWh/day during the winter and maybe 10kWh/day for AC when very hot, but most of the time our monthly electrical usage (with 2 kids and an electric dryer doing average of 7 loads of laundry a week, 1 load of dishes a day) is in the 30's.

Total electrical usage (not just HVAC) for past 12 months was 17,943 kWh - rates have varied but total paid was $2709.20, or average of 225.77/mo. Our current budget plan monthly payment is set at $236 - in August we will get a credit if we have paid too much since last August.

I believe well drilling cost $9000 for 3 wells - but you may pay more than $3000 for 1 well, I don't know if we paid more because one well is 500ft deep and they had to frack, or if we got a "discount" since the rig was here and all 3 were drilled the same day. Prices also could have changed in 7 years. We didn't pay for trenching since my dad did it. You have to ask if prices include excavation/drilling.

Estimates we got in 2007 included 4 ton Envision with 80 gal hot water heater app. $35,750 ), 4.5 ton unit (no specs) ranged from $27,500 - $32,500 (I'm looking at my notes), we went with 4 ton Climatemaster and the 2 80-gal hot water tanks, it was quoted at $27,773, I'd have to look at checks to see what we actually paid since that did not include grouting, etc. done by the well drillers. None of the quotes included well drilling or trenching, or electrical work. There was a $2000 rebate from CL&P at the time - federal tax credit was $500 according to quote - I think that was the max available, I'd have to check the 1040 for that year to see if that was what we got or if it was something different. Rebates/credits only figured on cost of equipment, not labor. Not sure what the credits are now.

    Bookmark   March 9, 2014 at 9:33PM
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Well, I know lots of businesses have gone under with the recession, but I am not talking about a company that has been in business for a year but for 14 years. It IS always possible they will go out of business. My brother got hit when a business he pre paid for pellets went out of business, and that did not involve anywhere near as much money, but it was still aggravating. However, if it is not renewed, and I agree it might not be, then I could regret going with Geothermal or I could be even more grateful I took advantage of when it was offered. I have yet to look into other companies but thanks for reminding me that I need to look at how long they have been in business. I would bet a company that was doing OK before the tax credits were offered would be more likely to be able to stay in business after they expire than a new company that was started just because of the Tax credits. I want to consider all angles.

    Bookmark   March 9, 2014 at 9:35PM
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I would suggest you also look into a liquid-to-water geothermal heat pump system that is ALL hydronic. That way you can use your existing radiators, won’t have to spend money to remove them & repair walls, won’t have to install ANY duct work and will have a centrally heated AND air-conditioned, zoned system.

You would have to either find a geothermal installer familiar with this type of system configuration or an experienced hydronic heating and cooling contractor that is ‘up’ on all the latest techniques and technologies that can work well with a geothermal installer that just installs the geo part of the system.

You may be able to have enough capacity with only 1-borehole drilled to a depth of 450-feet.

This can be effectively done. Search this site for my other (many) posts on this very topic.



    Bookmark   March 12, 2014 at 8:38PM
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