Calculating cost-effectiveness of geothermal vs. propane boiler

ryanhouseApril 8, 2010

We are adding on about 600 sq. ft. to a 150 year old farmhouse in Michigan, resulting in a total of about 2,400 sq. ft. I am having a hard time trying to calculate the cost effectiveness of expanding the current hot water and air conditioning systems ($9,400) vs. installing new, forced-air geothermal ($33,700).

The house currently has no insulation in the walls and roughly R-9 of fiberglass in the attic. The addition will be built with an ICF foundation, 2 x 6 construction and Icynene. The Icynene will also be sprayed into the walls of the existing structure, and the roof deck.

We currently have a roughly 10 year old, 82% efficient propane boiler with baseboard heat, a standard central air conditioning system (the previous owner fitted it using closets and the like to run ducts), and electric hot water.

I am estimating that our heating costs would be cut in half following the elimination of our existing kitchen (built aboveground with no real foundation and minimal insulation) and the addition of insulation, despite the added square footage, with little change in the costs of air conditioning and hot water. Based on this estimate, and the estimate provided by the geothermal contractor, the annual cost of the existing system would be $2,100/yr. vs. $1,000 for geothermal. Including the 30% tax credit, this would take about 13 years to pay off (not too good!).

How do I know these estimates are accurate, though? And what about maintenance costs? I have just learned that we need about $1,300 in repairs to the boiler (in addition to the cost of expanding the system) -- will it keep needing substantial repairs? And the condensor and air handler for the air conditioner are also about 10 years old -- will they need to be repaired or replaced? Will we be kicking ourselves if we keep the existing, aging system? It does work great, and the baseboard heat is so responsive, comfortable and clean....

Your input would be most appreciated!

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If you subtract the cost of a conventional system with its repairs from the geothermal cost, you end up with a cost for a geo system of about $23,000 not including replacement costs of the 10-year old A/C system and the 30% tax credit.

A savings of only 47.6% sounds VERY conservative to me, especially with a desuperheater for the DHW.

Maintenance cost for a closed loop geo system should be about zero other than the cost of air filters. The geo system should also have a much longer life cycle.

CanÂt tell you how to spend your money thoughÂ

What type of hydronic baseboard heaters do you have, aluminum fin or cast iron?


    Bookmark   April 11, 2010 at 1:17AM
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fsq4cw, thanks for your response. I think we mostly have aluminum fin baseboard heaters (except in the dining room, which seems to be cast iron). As to calculating the savings -- it requires so much speculation! And the geothermal contractor won't share their calculations with me. I know how the house performs now (I had a full energy audit conducted this winter, and have analyzed my bills over 5 years), but can't be sure how it will perform once it is insulated, sealed, and added on to....

    Bookmark   April 11, 2010 at 10:22AM
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What type of geo are you planning to install, forced air, hydronic or a combination of the two?


    Bookmark   April 11, 2010 at 12:53PM
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Please pardon my ignorance -- it is definitely a forced air system (too expensive to go with radiant in-floor), but it would also supply our hot water (or at least pre-heat the water? I'm afraid I don't really understand this part, but the quote includes a 50 gallon electric h*t water heater, and we would keep our existing electric h*t water heater as well). Does this mean it is a combination? The quote is for a 4 ton Hydron #HO50, if that helps.

    Bookmark   April 11, 2010 at 2:19PM
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What the 2-hot water tanks mean is that the geothermal desuperheater will produce hot water at about 110°F that will be stored in a passive buffer tank and will feed an active electric hot water tank. This should result in an energy savings of at least 33% with regard to producing hot water. This is not a Âcombination unit that would provide both forced air heating & cooling and full capacity hot water production for in-floor radiant heating. All geothermal units should be available with a desuperheater option for the production of domestic hot water.

During the summer time when youÂre air-conditioning, much the heat thatÂs being extracted from your home will go into your hot water tank as opposed to being vented into the outside air as is the case with a conventional air-conditioner or heat pump. In the A/C mode with a geo system your hot water is considered essentially free.

What type of ground heat exchanger (ground loop system) is being proposed?


    Bookmark   April 12, 2010 at 12:38AM
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A horizontal closed loop system.

    Bookmark   April 12, 2010 at 9:52AM
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I'd be surprised if a horizontal loop only saved 50% compared to propane for heating. Of course it depends on your electric rate and your propane cost but I'd expect your savings to be in the 60-70% range assumming average propane costs and $.10 a kwh.

    Bookmark   April 12, 2010 at 12:06PM
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Converted my oil boiler baseboard/elec AC unit to geo with wells and a desuper 3 years ago here in CT. Also replaced boiler with high efficiency tankless propane water heater for winter's DHW (summer DHW comes free via the geo's desuper). I hooked the geo's "emergency heat" circuit to the tankless DHW heater (no elec coils!) to fire up and circulate hot water to the pre-existing baseboard hot water units. Works great. Geo has held the house to 70F when it was -15F outside and the the "emergency" didn't even come on! Conversion factor for geo wells was 100ft of well for each ton of AC. Total electric bills for my 3000sqft average $2000/yr and I fill my 250gal propane tank 1/yr to run the tankless water heater and my propane high efficiency fireplace insert.

    Bookmark   July 10, 2011 at 11:28PM
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Re: Tom Brown

Sounds like you installed an EarthLinked or some other DX system.


    Bookmark   July 11, 2011 at 11:25AM
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