Geothermal make sense for our house?

CamGNovember 26, 2012

Building a 2,300 sf house in Nebraska, new construction on a one-third acre lot. Will be a pretty square, 2-story house house with 2x6 walls, and planning on 2" of XPS on exterior. I had planned on a high efficiency gas furnace, but considering a geothermal.

Electricity prices are quite low here, but I worry they will continue to rise, particularly given increasing coal emission regulations, whereas it seems our natural gas supplies are pretty abundant. I realize I'm asking very broad, vague questions, but I would love to hear anyone's thoughts. Thanks!

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I considered Geothermal very briefly... The costs of installation where just plain prohibitive in our state without the incentives that other states seem to have in place. Have you priced them out in your state yet?

    Bookmark   November 26, 2012 at 7:15PM
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I haven't gotten specific quotes, but a relative who owns an HVAC company in a nearby city said it should add something like $8k to our HVAC costs over a high efficiency furnace... on the other hand, we can get a 30% tax credit on the whole cost of the HVAC system. I've seen online this number is like $20k more, but I can't imagine he's that far off, and I suspect its cheaper in new construction. He was trying to convince me to do it (and not so he can do the job, we're too far away). Our local incentives add up to maybe a thousand dollars, too.

Assuming my relative in the right ballpark, we should be able to afford it if it really saves that much on the energy bill. But after reading news about discoveries of gas reserves large enough to supply the US for 100+ years, and with all the pressure to reduce emissions on coal plants, I worry the current calculus will not apply 20 years from now.

    Bookmark   November 26, 2012 at 9:33PM
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I'm replacing my furnace and a/c and received a couple of quotes for a geothermal system. The quotes, before any tax credits, were around $29K more than the high efficiency furnace and heat pump system that I ultimately decided to go with. After all credits, there was still a $12,500 difference.

    Bookmark   November 27, 2012 at 2:40PM
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I would take your relative's advice to install geothermal very seriously however, his estimate on the cost differential may be low. The high efficiency of the system would make the cost of operation very inexpensive relative to other systems.

If you're really worried about the future cost of electricity then I would suggest a geothermal hybrid system. A geothermal split heat pump with desuperheater AND a high efficiency variable speed gas furnace for the backup. This way you'll have the best of both worlds with additional benefits; they are the ability to run a gas furnace with a small generator during power outages and the ability to choose the source of energy should time of day or outdoor temperature dependant Smart Meters be installed in your area. This may also be of particular interest if you are planning to install a gas stove, gas fireplace, gas BBQ or a gas dryer.


This post was edited by fsq4cw on Fri, Nov 30, 12 at 19:22

    Bookmark   November 28, 2012 at 10:34AM
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I recommended geothermal to my brother when he built his home in Northwest NJ about 20 years ago. He has saved a fortune, and thanks me whenever the subject comes up. The cost of his was built into his mortgage, so that surely makes a difference, but he has been very happy with his decision and he works for a utility company. Value equals cost over time, so if you plan on staying in the home it might be worth it. I don't think energy prices are going to go down any time soon.

    Bookmark   November 28, 2012 at 12:22PM
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I'd say go for Geo if you can, even if you fold it into your mortgage. Wave of the future.

    Bookmark   November 28, 2012 at 9:55PM
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It is unlikely in NJ that geo could be cheaper than NG. Your brother may have built a tight house or didn't have access to NG.

Geo is just one way of heating a house and if you have NG, usually the only way it can make sense is with government handouts. If you don't have NG, than geo should be a huge consideration.

    Bookmark   November 30, 2012 at 6:24AM
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Does anyone who is considering geothermal have a calculation comparing heating with gas?

    Bookmark   December 1, 2012 at 10:19AM
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Cam, just a bit of philosophy for building a new house in a climate with a lot of heating and cooling degree days. Put the first money into the design of the exterior shell (walls, roof, windows). Build a superinsulated and very tight house. With just 2300 sqft of space, your design heat loss will be so low that choice of heating system matters far less than in a "code-built" house. If natural gas is available in your area (not propane - more $$), it may well be your best route.

Your wall, with that R10 of foam outside of the sheathing, will minimize thermal bridging and give you a whole wall R of 25-27, vs just 15-17 for a code-built wall with thermal bridging factored in. You could go even better, with a double-wall (two 2x4 frames), 12" cavity, with dense-packed cellulose or fiberglass (not batts) blown in. That would give you a whole-wall R40. Pile on the cellulose in the attic to R60, install triple-pane windows, air-seal the shell to make it very, very tight, and add an HRV or ERV to provide fresh air and control winter humidity while recovering most of the ventilation heat loss.

While that is what I did on our new house (superinsulated, tight), I also have a GSHP ("geothermal") for heating and cooling. In the northeast (I'm in NH), groundwater is plentiful and usually of good quality, so I went with a Standing Column Well (SCW) design, where water for the heat pump comes from and returns to the same well that provides water for domestic use. With the house being superinsulated, the winter heating load is so low that no extra drilling was needed for depth to support the heat pump, so that most of the extra cost for a GSHP system was for equipment, not the ground connection. I have close to 4000 sqft of conditioned space, and the two-ton heat pump handles it comfortably; I don't think it yet has had to go to second stage to keep up.

If I were in your area, where the ground connection likely would be a buried "slinky" loop, likely an easy excavation effort, the up front cost of a geothermal installation may well be reasonably low also, and worth considering. For backup, consider that if you lost power a superinsulated house loses heat very slowly. Backup could be provided by a wood stove on the lowest level (no power required), thus saving the cost of a backup NG furnace.

    Bookmark   December 1, 2012 at 11:39AM
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Dick, thanks for the detailed info.

Regarding the foam + 2x6 vs double 2x4 walls... any idea on the cost difference there? The problem is, I don't think my builder has done rigid board on the outside, but regularly does flash and batt, which I would prefer not to use. I suppose a double 2x4 might actually be easier to learn (really just two conventional walls, right?). Any thoughts on this difference? I suppose the marginal additional cost would probably by offset by the smaller HVAC system and heating/cooling costs, but off course things like window and door returns are even worse. I don't want to pass up the opportunity to build a well-insulated shell, but this is all a huge headache.

    Bookmark   December 3, 2012 at 10:02AM
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"Does anyone who is considering geothermal have a calculation comparing heating with gas?"

I have a chart dating back to 2009, however it is Metric, in French and relates only to price structures in the Montreal Quebec region. It's the relative prices for different sources of energy broken down into the final cost per kW of heat delivered into the home.

Here in Quebec there are 2-elecrtical rate structures available for residential customers. One is the single rate known as the 'D' rate and the other is the Dual Rate know as the 'DT' rate, available to clients having 2-sources of energy, one being electric (with HP as an example) and the other being carbon based.

The way it works is those with the single rate pay about 7.46-cents/kW year round and those with the Dual Energy rate or Bi-energy rate pay about 4.33-cents/kW when the temperature is warmer than -12C (+10.4F) and about 18.44-cents/kW when the temperature is -12C (+10.4F) or colder. This is done for basically 2-reasons, one being not to stress the grid when it's extremely cold and the other to maintain a large supply of clean electricity to export to our American neighbours at a substantial profit.

Back to geothermal verses gas, in 2009 and the prices haven't substantially changed, 1-kW of heat delivered into the house with the single rate and a 90% efficient gas furnace cost about 8.45-cents/kW. Single ratepayers with geothermal and COP-4, the cost would be about 1.87-cents/kW.

Where it gets REALLY interesting here is the dual energy rate WITH geothermal. The basic cost of electricity remains at 4.33-cents for the entire year except for a period totaling about 2-weeks of the year when it's -12C (+10.4F) or colder, at 18.44-cent/kW. With a geothermal split heat pump unit and a gas furnace, geothermal clocks in at an unbelievably low rate when coupled to the dual energy rate. When it's warmer than -12C (+10.4F) the cost per kW of heat delivered into the house with a COP-4 is just 1.08-cents/kW and the gas never comes on. Even when the cost per kW skyrockets to 18.44-cents/kW with a COP-4 geothermal HP the cost per kW of heat delivered into the home is still only about 4.61-cents/kW.

Remember that with geothermal there are NO defrost cycles - EVER! That when the backup gas does come on it is to assist the geothermal, not instead of the geothermal. So that when it's -30C (-22F) or colder, the gas and the geo are only on for a short while because they are on together, in tandem, the geo still at COP-4 and the gas furnace staged to whatever is required.

This rate of only 1.08-cents/kW of heat delivered is the lowest rate I've ever seen for active heating. As a nice bonus, it's also the same low rate for air-conditioning in the summer, not to mention DHW production with a desuperheater especially when coupled through a buffer tank to an instantaneous gas DHW heater. Open loop geothermal with passive cooling would be about the closest thing to 'Free' at this rate as there would be no compressor running, only a blower and circulating pump!

Rather long and convoluted but I hope this helps.


    Bookmark   December 3, 2012 at 12:45PM
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Most of the US has neither the climate nor the low electricity rates as in Quebec. Your "extreme" 18 cent rate during the coldest weather suggests that's the system's demand peak time. That would also correspond to the lowest demand period in the US in most places, which tells me the pricing would likely have nothing to do with keeping a reserve to export. Peak US demand is during AC season.

Geothermal can be useful for heating where electric rates are low-ish and natural gas isn't available. In many places, it isn't cheaper to install and to use.

    Bookmark   December 3, 2012 at 2:52PM
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In most of the US, electricity has increased since 2009 and NG is lower - so the rates have changed quite a bit.

My NG is 25% less than 2009 and electricity is asking for a 14% increase.

That changes a lot.

NG is relatively fixed cost across the US. Electric is not - NJ is one of the highest rates in the country so that is why geo can't compare to NG. There are vanishingly few places where geo can compare to NG when you factor in install costs.

Much better to build tight as has been mentioned.

Using NG with a tight house in any climate in the US should be a sub $300 per winter cost.

    Bookmark   December 3, 2012 at 4:55PM
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We do have NG. Even with all other things being equal (the savings in operating expense of geothermal exceeds its increase to the mortgage), I think the long-term propensity for increases in utility rates make the NG furnace the better choice. And as has been mentioned, a tight, well-insulated envelope will further reduce the marginal savings of geothermal, regardless of rates.

Now the issue is to get a tight, insulated envelope... there is a long way between the ideals mentioned here and what I can actually get local builders/subs to construct!

    Bookmark   December 3, 2012 at 5:18PM
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Cam, I put the question to the framers after the shell was up, and they said the crew of 3-4 spent perhaps a day and a half total extra in adding the interior wall after the exterior wall frames were up on each level. The cost of the extra framing was perhaps a grand.

The window returns were flared out about 20 degrees, for better outside view; with a straight in return, the "tunnel effect" of the wider wall cavity is more noticeable. The flaring of the returns is often done in double wall houses. As to material, we went with maple veneer plywood and solid maple sills, although staining all that to match was difficult; veneer and solid maples take stain differently. The end product looks nice, though. People with very wide sills usually like them for plants and decorations.

I had no hope of finding a builder with experience in the type of construction I wanted, so I went with one who understood that I was doing something quite different from his usual and would work with me to execute the plan. I had been following superinsulation and house construction in general for a few decades, and in the end I designed the shell myself. I also sized the heat pump myself. Three different HVAC installers all said a 5-ton unit was needed, while my own heat loss model showed that a 2-ton unit would do the job comfortably, and that is what I had my HVAC guy put in. I was right, as I knew I'd be.

You may have to educate yourself the same way if you want to go the superinsulation route if there is no one around you with that experience. If you install a GSHP, you need to have it sized properly (or size it yourself), to match the actual house that gets built. Don't let them size it based on rules of thumb. A detailed heat loss/gain model must be done, and not all HVAC contractors know how to it right for a tight and highly insulated house. In the end, you'll be much more confident about the comfort and efficiency (and durability) of the house and the sizing of the HVAC system.

    Bookmark   December 3, 2012 at 7:12PM
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