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Up front costs of Geothermal heat pump vs. other heating methods

Posted by lizt06 (My Page) on
Fri, Feb 10, 06 at 15:01

We are planning to build a new home near Annapolis, MD. I am just starting to investigate geothermal heat pump systems. It has been mentioned quite a few times that up front costs are more - how much more (in percentages or costs)? The house will be around 4000 sq.ft. with 2800 on first floor and 1200 on the second floor. We will have an unfinished basement that may get finished in the future (but not for quite a few years). I am just trying to get a feel for the difference between a geothermal system and a heat pump with oil backup system - there is no natural gas. We have plenty of land. Also - are there restrictions with regard to septic systems and wells?

Thanks for any input!
Liz


Follow-Up Postings:

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RE: Up front costs of Geothermal heat pump vs. other heating meth

Liz,

We are doing a similart sized house right now, just north of Baltimore. If you insulate it right and keep it tight, you can add approx $10,000 to the cost of your mechanical system. Wells are the more efficient way to go and the difference in wells and horizontal ground loops is included in the 10 K.

There are no restrictions regarding septic and wells other than separation. You have to be at least fifty feet away from your water supply well and you must stay out of your approved septic and septic reserve areas.

Now you have the energy system difference. How you apply the heating and cooling in the house is another matter. One problem is finding a responsible contractor that has the knowlege to design and install a system of this type. Many are afraid of these systems but often your well driller will know the people who can do it right.

Good luck with your new house.


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RE: Up front costs of Geothermal heat pump vs. other heating meth

We are close to starting a large residential geothermal heating project outside Ellicott City, Maryland. My experience has been that there are only a few contractors qualified to do this work in this area. In our case the cost for geo was 1.8 times the cost of regular heat pumps.


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RE: Up front costs of Geothermal heat pump vs. other heating meth

Would anyone be willing to share the name of the contractor they are using? I have looked a few up online but would also like some word of mouth feedback.


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RE: Up front costs of Geothermal heat pump vs. other heating meth

Just wanted to mention that our kw usage has more than doubled with our new geo thermal unit. We pay the highest price per kw in our area thanks to the co-op company we have.Therefore the electric bills are way more than we thought they would be when we decided to go this route.Good luck.


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RE: Up front costs of Geothermal heat pump vs. other heating meth

snagd...This is interesting. Can you supply a little more info? Did you heat with electric before and your electric usage (not the cost per kw) doubled, or did you substitute more electric costs for fossil fuel costs? When did you make the switch, and what units are you using? Thanks in advance...


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RE: Up front costs of Geothermal heat pump vs. other heating meth

Yes, I would like to hear more about the electric increase too.

snblaes, would you share your contractor's name in the area?

Liz


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RE: Up front costs of Geothermal heat pump vs. other heating meth

Liz...email me at blaes@yahoo.com and I'll give you the low-down.


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RE: Up front costs of Geothermal heat pump vs. other heating meth

The first costs of choosing a geothermal system may not be greater than choosing whatever else you may be considering.

Lets consider the other option youre thinking about, oil. First of all, youll need to design and build a chimney. Next, install an oil tank that takes up valuable space. Then you will need an oil furnace. You no doubt will want air-conditioning; so lets add the cost of another system. Dont forget your service contracts, theyre not free!

Geothermal heat pumps give you one integrated system with no mechanical sub systems in your back yard to create noise pollution or be exposed to inclement weather conditions. Geothermal can also provide free domestic hot water during the air-conditioning season and reduced cost domestic hot water the rest of the time. Should you be capable of periodically replacing an air filter there will be NO SERVICE CONTACTS NECESSARY!

You say you have plenty of land? Great! There may not be any drilling costs involved. You may be able to install a horizontal loop. This may represent a serious savings advantage. It should be investigated.

Contrary to popular belief, open loop well systems do not represent the most efficient way
to go. ANY properly designed geo-exchange system will be as effective as ANY other properly designed geo-exchange system.

Open loop systems also present two concerns that closed loop systems do not. First, is the periodic flushing of the water loop and heat exchanger to purge them of mineral build-up. Second is how certain are you of your water supply? What if the water table drops?

Its imperative that your system be designed by an accredited installer to have the assurance of trouble free operation for many years.

Some final thoughts, geothermal is environmentally friendly and responsible, 360% efficient compared to 95% efficiency for a fossil fuel burning appliance at best! 2/3 of the energy for geothermal is FREE energy from the earth right beneath your feet. Geothermal heat pumps are on average 45% more efficient than air-source heat pumps. Geothermal systems will add greater value to your home investment; cost you less money to operate year after year after year. This energy cost reduction may mean more money for other features or just more money left in your pocket.

SR

Here is a link that might be useful: how-efficient-is-it-magazine.com


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RE: Up front costs of Geothermal heat pump vs. other heating meth

snblaes - I tried emailing and it bounced. You can write me at liz.cpa@comcast.net

fsq4cw - Yes, we are considering all what you wrote. Now it is a matter of trying to locate a trusted contractor.

Liz


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RE: Up front costs of Geothermal heat pump vs. other heating meth

Liz, check out this web site to find an accredited installer for your area:

http://www.igshpa.okstate.edu/index.htm

Anyone listed on the IGSPHA site KNOWS what they're taliking about.

Here is another GREAT site: http://www.geoexchange.org

SR

Here is a link that might be useful: IGSHSA, International Ground Source Heat Pump Association, Oklahoma State University


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RE: Up front costs correction

Last post should read:

Anyone listed on the IGSPHA site KNOWS what they're talking about.

SR


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RE: Up front costs of Geothermal heat pump vs. other heating meth

We're currently building a super energy efficient house in Manitoba Canada (R2000 is the spec). We decided on geothermal as we hope to live here forever. The marginal cost was Can $24,000 more than high eff. nat gas furnaces and air conditioning. It is a lot, but we're heating 3550 sq ft with full basement for 6000 heated sq. ft, in Siberian winters (usually, this year has been wonderful). Our house also has lots of north facing windows, couldn't help it based on our lot. The R2000 specifier calculated we'll save around Can$1000 a year in heating alone, not including air cond. costs which he didn't calculate. At over 300% efficient, we know air cond. costs will be far less too. The capital cost also is hight due to needing 2 geothermal units. We're doing well to well open loop. Of course our payback will shorten as the spread between NG and electricity widens, which it surely seems to be doing regularly!

Our payback is higher as with the energy efficient construction, heat loss is less to begin with which reduces geo savings. We're looking at this as a long term investment, tax free, which can only increase as energy costs rise.


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RE: Up front costs of Geothermal heat pump vs. other heating meth

fsq4cw - Liz is interested in a DX system. I believe you have one of these, as I read with great interest past posts of yours on the benefits of this system. Can you let Liz know of them?


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RE: Up front costs of Geothermal heat pump vs. other heating meth

Yes, I really am interested in DX but am finding that very few contractors in our area have experience with it. I am now contemplating having an engineer design the system and then using a contractor to install it. I know fsq4cw has praised the Nordic Geothermal DX heat pump. I went to their website and see there aren't distributors in our area (Annapolis, MD). We won't start building for a year or so and perhaps there may be more choices at that time. I have gone to the above mentioned websites. I haven't made the phone calls yet since we are still a bit premature but will need to figure out how many companies will be needed to design and install. And of those - how many have DX experience.

I do appreciate everyone's help and information.

Liz


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RE: Up front costs of Geothermal heat pump vs. other heating meth

One of the best places to learn about the DX geothermal heat pump would be on the how-efficient-is-it-magazine.com web site as well as on the Nordic web site.

We are VERY pleased with our Nordic DX-45 geothermal heat pump. I highly recommend them IF the installation is done well; but that goes with any installation.

I would not limit myself to the DX style of heat pump though, in fact, if I had it to do over again I would consider a water source triple function HP. I like the idea of having copious amounts of hot water as well as forced air.

My best advice is to research thoroughly, hire only IGSHPA accredited or certified professionals. Oklahoma State University is the MIT or Harvard of geothermal technology and development; I fact, other geothermal organizations discreetly send their own people there for accreditation. Check references by visiting completed projects and speaking with their owners. Trust your instincts; if anything feels uncomfortable, keep looking. Take pictures of everything you see. Keep coming back to this forum. Its a great place.

Here are 4 sites that may be helpful:

http://how-efficient-is-it-magazine.com

http://www.igshpa.okstate.edu/index.htm

http://www.nordicghp.com/mg/nordic_heat_pump.htm

http://www.geoexchange.org

SR


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RE: Up front costs of Geothermal heat pump vs. other heating meth

We will start construction on our house in Baltimore County, Maryland as soon as the weather breaks. We will have two systems in the basement heating and cooling 7250 SF and two smaller units in the attic heating and cooling 3400 SF. We will also have a portion of the basement on radiant and the garage floor will be radiant to keep the area around 50 degrees in the winter time. I also will have the system supply all domestic hot water.

I have narrowed it and priced it down to two options. We have no natural gas here so our first option is to go with an oil fired boiler to supply the heat for the air handlers, radiant floor and the domestic hot water. Use standard AC with outside condensers for the summer months. This option will cost us about $42,000.00 with all the bells and whistles.

Our second option is to go geothermal. We looked at a DX system and also a closed loop since we have 5+ acres for a lawn. With all the bells and whistles on the geothermal system, we were given prices of over $110,000.00. I liked the fact of not having the four condensers or the exterior of the house. I liked the fact that my energy costs were going to be less but with no guarantees as to how much. I also liked the idea of going green for our home. I hate the idea that few HVAC contractors do this work thus driving the installation costs very high. I hated the fact that my ROI on an average savings calculation was more then 14 years. I also hated the fact that the tax deduction for this system is so insignificant that it wouldnt motivate me for a second.

I am a commercial contractor and understand HVAC systems fairly well but far from an expert by any means. If anyone can show me that going geothermal is a wise investment then I am all ears. Otherwise it makes zero economical sense.


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RE: Up front costs of Geothermal heat pump vs. other heating meth

Re: mepop

Convincing you will be a tall order. First system costs will be the cheapest because youre not replacing anything; but you already know this. $110K is a lot of money. Whats not clear from your post is what type of closed loop system is this based on, vertical or horizontal? Were the various loop options investigated? There are many possible options associated with both. How thoroughly were they investigated? There may yet be opportunities for substantial savings based on another yet equally effective ground coupling system.

How competent was the person who prepared the geothermal estimate? What certification do they have to design such a system? You may, or may not have the whole story.

The geothermal system will certainly add value to your home when you cash out, so its money invested not burned.

Geothermal systems have the longest life cycle of any HVAC system and the highest rating of owner satisfaction. A properly designed system will require very little maintenance, certainly less than any other system.

Geothermal systems provide the best indoor air quality for you and your family. No flames, no fumes odors or smells. No leaks of oil, gas, or carbon monoxide. No noise or visual pollution. One accident with oil and your clean-up costs can well exceed the cost of the geothermal system altogether. Try getting insurance afterwards.

Even at todays prices for energy it sounds to me like this home will be EXPENSIVE to space condition. Care to consider where energy cost will be in 10 years time? Care to consider how much oil China and India will need in 10 years time while youre shopping around for the best deal to fill up that thirsty oil tank?

There is a strong likelihood that energy prices will rise to a level that will reduce your payback, based on the cost differential between your two choices, to less than 10 years; maybe even less than that should there be a more cost effective method of design for the geo-exchange component.

Other considerations, due to the extreme temperatures in an oil furnace, you will be looking at replacement far sooner than with geothermal. What will that cost be 15 t o 20 years from now? Same thing goes for an air source heat pump exposed to inclement weather conditions. It too will need replacement much sooner. You can add those costs to the equations as well.

Your geothermal system, on the other hand, may require, after 20 years, a couple of small circulating pumps and a compressor. After 20 years? Big deal! Youll have saved at least that much on service contracts and oil tank replacement alone.

For my money, I would sooner have one integrated , highly efficient (360%), green, geothermal system, than separate inefficient systems located inside and outside. One highly efficient system to provide heating, air-conditioning, full domestic hot water AND radiant in-floor heating with energy savings of around 66% (perhaps a minimum of) year after year.

Look, I know almost very one whos ever installed geothermal has agonized, fretted, and crunched to numbers 10 different ways and STILL wasnt sure.

Let me put it this way, its like preparing for a colonoscopy just drink the damn cool-aid!

Bottoms up!

SR

Here is a link that might be useful: how-efficient-is-it-magazine.com


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RE: Up front costs of Geothermal heat pump vs. other heating meth

RE: fsq4cw

I am never one to drink the cool-aid but if I am missing something, I would like to know what it is. I do appreciate the debate and just to put it on the table, I have no vested interest in pushing an oil system or not promoting a geothermal system. As I previously stated, I am a General Contractor and I only subcontract my HVAC work. I only want a system for my personal home that will give me the best ROI, (return on investment).

Do you install, sell or promote geothermal systems in any way and if so what has been the typical ROI from your experience? I only want to focus on the ROI because lets face it, unless you have money to burn, little else matters, at least for me.


Calculating my monthly costs using oil and electricity to heat and cool this home is about $650.00 a month. To heat and cool this home using a geothermal system will cost about $300.00 a month maybe more. Thats a savings of about $4,200.00 a year which sounds good but wait.

If I were to calculate only a $60,000.00 additional increase, (and I think it will be more) to my mortgage for a geothermal system over the oil fired boiler system, my monthly payments would increase $396.00 a month or an additional $4,752.00 a year. To finance a geothermal system will cost me $552.00 more annually then the savings to heat and cool the property. THIS IS TERRIBLE AND MAKES ZERO FINANCIAL SENSE!!!!


I have figured in equipment replacement cost into my ROI calculations for the oil system. I estimated replacing the outside condensers at 15 years and the boiler at 20 years. I have figured on a 4% annual price increase in oil as this has been a 20 year historical average. I plan on being carried out feet first when I leave this home so again the ROI is the only issue.


I didnt even calculate the chances of needing to replace the loop on a geothermal system or anything else for that matter and the ROI for geothermal still looks terrible. Nobody likes to mention it but I have seen horizontal closed loop systems need to be redone because the dirt fill has a much higher tendency to pull away from the loops verses a vertical system. I didnt calculate any of these costly possibilities into my ROI calculations. If I did, geothermal is a loser to the extreme.


The HVAC contactor who priced this system is "THE" geothermal contractor in the area. I did get a second price from another company and the prices were comparable.


I have been in the construction industry for 25 years and dont see the financial viability of installing a geothermal system. I am actually hoping someone can prove me wrong because I like the green concept but not when it hurts me financially to the extent that it does.

Thanks for any input!!!!


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RE: Up front costs of Geothermal heat pump vs. other heating meth

mepop - Would you share the name of "the" geothermal contractor around here. We will be bidding our house out too and am just curious for names I may be missing. Thanks.

Liz


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RE: Up front costs of Geothermal heat pump vs. other heating meth

I'm surprised to hear the differential for a geothermal system is so high. Something is wrong. I just installed two geothermal systems, one a retrofit to a 108 year old house and the other in new construction.

For the retrofit, the 40 yead old oil furnace was at the end of its life, the oil tank was within a year of the end of its life. There was no air conditioning and the house was very uncomfortable in summer. So we already knew that the whole system would have to be replaced and, if we wanted air con, ducts would have to be installed. I figure the extra expense in a geothermal system is the cost of the ground loop. In the retrofit case, we installed a vertical borehole right in front of the house:


The cost of this was $14 per foot (including the loop itself and the circulating fluid etc.). So I reckon the figure to use for ROI is the cost of this, plus the cost incremental cost of the heatpump versus a regular system. I think this figure is small. Financing this over 25 years gives a monthly extra payment of $45.

Now lets look at the flip side, the cost savings in utilities. When the oil system was running, it was using around $2800 a year in oil (at last year's figures - this year is more than 40% higher than last). So far this year, we've used about $600 total since the start of the heating system. My annual estimate, based on the average number of degree days heating (and cooling) here is about $1000. From a cash flow point of view, we're averaging $45 (financing the system differential) per month plus about $84 per month utilities for a total of $129. Previous energy bill was about $3600 per year total - or $300 per month. That means my ROI is immediate in the form of a cash flow saving of $171 per month, every month. As energy prices rise, the savings will rise too.

For the new house, the cost of the system was larger (since we also did radiant floor) and the drilling was more (deeper well, more expensive contractor due to location and rock type) but the differential was probably less than $10000 over a "conventional" system. The cash flow saving is less (but still positive) because the house is better insulated, but it is a constant positive saving every month in perpetuity. We're lucky that electricity rates here are low and this really helps make the investment worthwhile. But you can be sure that oil/gas prices will not be falling anytime soon. And the green aspect (our CO2 emissions are 1000s of Kg less per year now) is also a bonus.

Paul.


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RE: Up front costs of Geothermal heat pump vs. other heating meth

Go get'em Paul!!

SR


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RE: Up front costs of Geothermal heat pump vs. other heating meth

SR,

I have found that since installing geothermal heating systems, I have become somewhat of a "green heating evangelist". Many of my friends were extremely sceptical about the idea before we did it; now they're jealous of the low energy bills we have :)

By the way, I'm also in Montreal.

Paul.


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RE: Up front costs of Geothermal heat pump vs. other heating meth

RE: Lizt06

Send me an email to mas5461@yahoo.com and I will reply with the info you requested. Thanks


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RE: Up front costs of Geothermal heat pump vs. other heating meth

Paul:

My price of $42,000 for the boiler system is a good price since that guy does many jobs for me on an annual basis. The geothermal price however is not too far out of line for this area. Call the few contractors around Maryland that truly know geothermal and they will tell you its twice the price of other systems except systems with electric heat pumps.

Financing your additional costs on a 25 year loan, (maybe 6 %) at $45.00 a month is financing only $7,000.00. At $14.00 a foot divided by $7,000.00 is only a well of 500 feet. In Maryland, the average well per ton is 200 300 linear feet. You being in Quebec, I would assume your well requirement are deeper per ton then here in Maryland.

The house I am building is 10,500 and will require around 15 tons plus. Looking at the picture you posted, the square footage of that house also looks substantial. I would think you could get away with 850 to 1000 square feet per ton in your area but it looks like you have far, far more then a two ton system.

In short, you are the first person after two years of my time researching this technology that is having a positive cash flow from the first month. Everywhere else that I have looked, it takes about ten years or more to get into the positive.

I am not trying to be confrontational on this topic. I just want to resolve an issue that I have been investigating for more then two years. The only thing I have found to be certain when it comes to geothermal is, if youre selling this product, you love it. If you own geothermal, you like it. Other then the green issues, I havent seen concrete benefits.

Thanks, and if anyone wants to talk direct, I would be glad too.


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RE: Up front costs of Geothermal heat pump vs. other heating meth

2-300 feet per ton sounds high. The two systems I had installed both had around 120-125 feet per ton. It really depends on the soil type. In the retrofit that you see in the photo is the soil is dense limestone from about 20 feet down and the system is 3.5 tons (420 feet well). The house is 1950 square feet living space plus 900 square feet basement that is storage but "somewhat" heated. I guesstimated that a geothermal heatpump is around 20% more expensive than an air-source pump simply because it's a lower volume market. So I figured the additional cost I had to finance was the drilling ($14*420) plus the incremental cost of the pump itself - I actually did $8000 at prime rate (which is around what we're paying). In the photo, our house is the one directly behind the drill rig - it is attached to the neighbouring house to the right.

The new house we did is 3100 square feet living space plus 1550 square feet heated basement. This requires only 4 tons capacity (the well we did here was 500 feet and we hit schist and quartzite after about 15 feet) because the house is well insulated. Groundsource heatpumps here are sized for cooling load (otherwise you don't get good humidity removal during the cooling season due to the system being oversized) and so some sort of backup is required. For the retrofit, there's a 10kw electric resistance heater. For the new house, we have hydronic radiant flooring on the entire ground floor that's heated with an 8kw electric boiler. This is effectively the backup. Once the slab is warm, it stays warm for a long time since the space above and below is heated by the heatpump.

Here's a picture of the new house taken late October last year:


You need to do a proper load calculation to get the system sized correctly. 15 tons sounds rather large - scaling our new house experience would suggest closer to 9 tons. It would be worth making sure you have good insulation rather than installing a larger system. We insulated the walls to R29 and roof to R50 and made sure we put in the best windows we could afford without going nuts (low-E coated, argon filled, but only double pane). All the walls and roof have a double-foil polyisocyanurate rigid foam radiant barrier (which is also the vapour barrier).

Natural Resources Canada has a neat program which can be used to calculate cash flow, loop length etc. based on geographical location. I haven't tried it for US locations but it probably works. Hopefully you can get some other opinions on how many feet per ton you need.

Paul

Here is a link that might be useful: Natural Resources Canada Retscreen program


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RE: Up front costs of Geothermal heat pump vs. other heating meth

Re: mepop

If the numbers dont add up, just dont do it. Its that simple.

Regarding the earth loops, PROPERLY installed they should not be a concern in your lifetime even horizontal loops!

"THE" geothermal contractor in your area still tells me NOTHING of their qualifications. However, that is not to say they arent qualified.

Since youve asked, we installed a geothermal heat pump 2 1/2 years ago. Id say the pay back is 5 to 10 years depending on how you want to play with the numbers.

Since youve asked, how-efficient-is-it-magazine.com is my web site.

Since you asked, I am an accredited IGSHPA installer.

Since you asked, I do represent a geothermal engineering firm. However, we deal with industrial, commercial, and institutional geothermal design, rarely residential. Some of our specialties include low temperature geothermal heat pump applications, such as where geothermal heat pumps are not just used for heating and cooling but for freezing. Other areas of expertise include geothermal systems used in conjunction with off peak hour thermal storage. These systems can be in the millions of Btu range. Another area of expertise is design-using permafrost as a source for heat. These systems are mainly used in the Arctic. Lastly we have expertise in drilling, geology, ground conductivity analysis and prediction. Our services are available globally.

SR


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RE: Up front costs of Geothermal heat pump vs. other heating meth

After months and months and more months of searching, I finally got my answers on installing a geothermal system. I have had many discussions and emails with a number of people from this thread and as I promised, Im posting my conclusions.

I received my answers from an HVAC contractor that I have known for about five years. This guy installs two to three geothermal systems a week and has been for some time. This installer is an Accredited Installer and a Certified GeoExchange Designer by the IGSHPA so he should know what hes talking about. I have also given him business installing traditional HVAC systems in the past and will be in the future so I know he wouldnt steer me wrong.

My geothermal specialist recommended not using a geothermal system if the goal is to save money. The initial costs are too great and he said it will take a minimum of ten years to start recouping from the additional expenses. He didnt even install one on his house when he built it due to the additional costs. He recommended super insulating and sealing the house with spray foam urethane insulation. I have 2x6 exterior walls and with the product offering a reported aged R-value of R-6.5 per inch thickness, I can easily get an R-30 rating in the walls and far more then that in the attic. This will be a $15,000.00 additional insulation cost but doing so will allow reducing the tonnage on the HVAC system and save maybe $6,000.00 on the HVAC installation.

For the HVAC systems he recommended using high seer heat pumps for all four systems. He recommended the two systems that will handle the basement and first floor to have a propane backup. He did not recommend putting a propane backup on the two systems going in the attic to feed the top floor. He said the top floor will get plenty of heat rising up from the lower levels so running propane to these systems is overkill.

Also he recommended using a small propane fired boiler to handle the radiant areas and the domestic hot water. Natural gas is not available so he recommended propane and not oil for my situation. I am going to have a propane tank installed anyway for cooking and fireplaces so using propane is a no-brainer.

Also with a super insulated/sealed house the operating costs will be dramatically reduced and will be much quieter. I calculated the $9,000.00 additional insulation costs, (after a $6,000.00 HVAC reduction costs due to less tonnage required) will only take me three to four years to recoup.

I was already going to have fresh air with heat recovery and HEPA filtration so there will be no additional expenses for a super tight house. I couldnt believe it, after speaking with dozens of people about this; I finally got an honest answer that makes financial sense.

If you want to go green and the money doesnt matter, go geothermal because I think its a great. If your decision is influenced by finances like mine; I recommend investing your money into other areas such as insulation and not geothermal.

Thanks for everyones assistance and I hope this helps!!!!


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RE: Up front costs of Geothermal heat pump vs. other heating meth

We opted for GHP in our new home, which was completed 2 years ago. Our GHP cost us ~ $25,000 more than a high efficiency gas furnace installation. It has the bonus of providing air conditioning "free".

We did an investment analysis before deciding on GHP. It indicated a payback (discounting future savings to present value) of ~ 12 years based on the prices of natural gas and electricity increasing at approx. the same annual rate in our region.

In our first two years of operation, the cost of gas has increased by 19% while electricity is still the same price as the day we moved in. Updating the investment analysis with actual costs for the first two years reduced the projected break-even to 9.4 years. The weak points in this analysis are that we don't know what it would really cost to heat our home with high efficiency gas; and that we can't predict future energy price increases perfectly.

Our analysis shows that the up-front premium of $25,000 for GHP is paid back (future cash flows discounted at 5% annually) in 9.4 years. Following that, the GHP pays off as an investment. Our home is very well sealed and energy efficient. It has been audited and certified as equivalent to the Canadian R-2000 standard.

This leads me to the following conclusions.

1. GHP pays off if you stay in your home for ~ 10 years or more. If you sell your home before that, you probably won't get any investment benefit unless you can demand a premium because of the GHP, but it is uncertain whether GHP actually brings a premium upon sale. Logically it should, but who said real estate prices were logical?

2. The time it takes for a GHP installation to break even depends on the relative cost increases in electricity (which runs the GHP) and the alternative fuel you would otherwise have used. Relative energy costs vary tremendously across regions. Our cost of electricity is cheap -- 6.1 cents per KwH -- and is ~ 90% supplied by low-cost hydroelectric. This will undoubtedly increase as new supply is brought on line, but since prices in our region will be blended averages, electricity prices are unlikely to rise as fast as gas.

3. Such financial analyses are inexact since few people know with certainty what it will cost to heat a new home with any of the alternatives.

4. The more energy efficient the home is, the longer it takes for GHP to pay off.


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RE: Up front costs of Geothermal heat pump vs. other heating meth

I'd also add a number 5:

5. The more extreme the climate, the less time it takes for the GSHP to pay off.

For example, I live in Montreal and we have around 7500HDD (4200 in metric) but it is also very warm and humid in the summer. Because it is so cold in Winter (average temperature in January is around 14F), air-source heat pumps have a low COP and are not very effective (though they would work well for air conditioning in summer). Since a GSHP has a relatively constant COP (>3) , they work very well for the long winter heating season and save a lot of money. Electricity here is also very cheap and so this also helps multiply the savings.

I can see for a much warmer climate, with winter temperatures in the 30-40F range or higher, an air-source heat pump has a sufficiently high COP that there is little benefit in the overhead cost of a geothermal system and the payoff will be longer.

I'm very happy to have two systems that are cash-flow positive, though the retro-fit has a bigger payoff because we replaced an old, inefficient oil system which would have been much more expensive this year due to the dramatic rise in oil prices.

What would be interesting here in winter would be to have a micro combined heat-and-power system using natural gas to power a generator to drive the heatpump, the waste heat from the generator making up the balance of the heating requirement for space heating and hot water. It would not be so effective in the cooling season though. All that said, since our electricity is >98% hydroelectric, I'm happy that an all-electric system reduces our greenhouse gas emissions for heating down to near zero, which would not be the case with the micro CHP system.

Paul.


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RE: Up front costs of Geothermal heat pump vs. other heating meth

I need to add some additional view points to java_man thats not being considered. Take his 25,000.00 additional investment in geothermal and treat it as a true investment. Lets say a very modest 4% Certificate of Deposit. That $25,000.00 CD would be worth more then $37,000.00 in ten years. My calculations showed it would take me 14 years to recoup my additional costs for geothermal. That same 25K CD for 14 years would have grown to well over $43,000.00. I think you see where Im going.

This doesnt even calculate the additional costs if you are going to finance the additional $25,000.00 for a geothermal system. Work those numbers into the equation too and you will be running to the medicine cabinet for the hemorrhoid cream.

Not to mention, we all know how rapidly technology is changing. I am fairly sure we will be seeing HVAC systems competing closer to geothermal efficiencies in the near future. Check out the two links

http://www.supplyht.com/CDA/Archives/c79ed40ad83a8010VgnVCM100000f932a8c0

http://news.thomasnet.com/IMT/archives/2003/04/new_hvac_techno.html?t=archive

If you do the math properly and take the green emotional factor out of it, geothermal is not a cost saving option any way you look at it. The industry that promotes Geothermal should be upfront with us about that but their not. Geothermal is an extremely efficient and environmentally friendly option but in no way a cost savings. I wish I could afford it for my project but I cant.


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RE: Up front costs of Geothermal heat pump vs. other heating meth

Mepop,

The issues you raised in paragraph 1 of your post were considered in my analysis. I believe I did the math properly. I'll describe my methods below and you can critique it if you wish.

I used the appropriate financial analysis method for this -- net present value (NPV). This method calculates the yearly net cash flows, then "discounts" all future projected cash flows at the appropriate "cost of capital". Here are the details.

The initial capital cost I used was $25,000 at year 0. This is the actual cost of my entire HVAC system, installed, minus the quoted installed costs for a high efficiency gas (HE gas) furnace system.

The "cash inflows" calculated for future years are the difference between the annual operating and routine maintenance cost of HE gas (which is higher) minus the annual operating and routine maintenance cost of geothermal. This is the annual "saving" for the GHP.

Using this method, the initial capital cost appears at its full "present value" of $25,000. All future projected savings are "discounted" to present value. This is done by dividing each year's net saving by [(1.05) to the nth power] where "n" is the year in which the cash flow is projected to occur. For example, the projected cash flow in the 8th year is divided by 1.4775 to reduce it to its "present value".

This method is the "gold standard" for evaluation of capital projects. There have probably been millions of projects worldwide that have been either rejected or built based on this method of analysis.

When critiquing a NPV analysis, the key questions are usually:

- How accurate is the initial cost?
- How accurate are the annual cash flows?
- Was the appropriate "discount rate" used?

Whether there will be more efficient systems in the future is important if you're not building today. But if you're building today (or as I did, 2 years ago) you can only use the technology that exists now. I don't think my wife would have agreed if I suggested going without heat for a few years to wait for new technology to become available. ;-)

I agree with you on one point, though. I found most vendors of geothermal systems to be somewhat evasive about the actual savings and the time it would take for a GHP to "break even" vs. compared to alternatives. For that reason, I did my own analysis. I will continue to track the actual costs and savings so I will know exactly when my investment breaks even.

By the way, my analysis showed a shorter payback period for an air source heat pump and supplementary electric furnace. I didn't go with that alternative because people in our region typically sleep with their windows open from May through October, and the homes here are close enough that an outside heat pump would have been disturbing to neighbours.


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RE: Up front costs of Geothermal heat pump vs. other heating meth

The money we piss away in our lifetimes with hardly a thought; vacations we "need" or "deserve", luxury vehicles, vacation homes, summer camps, $50.K/yr to send the kid to university out of town to study G-d knows what where there may not even be jobs etc. Yet this we analyze down to the nth degree of the last nickel. Rationalization to this extent is itself irrational.

We all have our reasons. Do it, dont do it. Who cares? For me this threads dead!

SR


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RE: Up front costs of Geothermal heat pump vs. other heating meth

fsq4cw,

Geothermal=double green

The up-front cost of geothermal is high. A fairly typical new home builder like us could have added many desirable luxury features for the $25k we invested for GHP, or they could have limited the size of their mortgage. I think mepop and others who ask similar questions about the payback on geothermal are right to do so. In our case, this analysis has convinced me that we made the right decision. Geothermal is "green" from both an environmental and an investment perspective.


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RE: Up front costs of Geothermal heat pump vs. other heating meth

Re: Java man

Look, Im with you. I cant justify NOT doing it. We did it and any home Ill ever own will have to have it period! That heat pump is (almost) a member of our family. My wife bemoans the fact that its the ONLY thing in the house that Ill ever dust!

I know everyone has to ask these questions. Most of us agonize over these questions, but at some point you have to stop the agony and make a decision. Some decisions are about more than just the money. Im not suggesting that it doesnt make economic sense either. When I compare heating costs with neighbors, theyre left in shocked disbelief, its almost embarrassing. I know the numbers are there when neighbors tell me theyre paying thousands more per heating season.

SR


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RE: Up front costs of Geothermal heat pump vs. other heating meth

Again, our outlook was long term. We hope to live in the new house forever. Therefore, I wanted to insulate myself from ever rising energy costs, with R2000 construction, plus geothermal. One builder we received a quote from actually discouraged us from using it, saying save the $24000. I look at it as an insurance policy. I'm paying something up front to get something in return. Yes the mortgage will be higher, but the savings will balance the extra cost, and increased energy prices will not have me breaking into a cold sweat. I'd rather lock in at current low mortgage rates for a long term mortgage, and save in the future on energy costs. This may not be the best financial desision from the actual accounting side as java man calculated, but it is a reasonable financial desision, and a good emotional one: peace of mind.


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RE: Up front costs of Geothermal heat pump vs. other heating meth

Yesterday's Baltimore Sun spoke of deregulation of electric prices taking effect in Maryland in July with resultant increases of 40-80%. That may influence the above numbers.


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RE: Up front costs of Geothermal heat pump vs. other heating meth

I also live in Maryland and do believe electric prices will increase when todays reverse auction is over. The experts are predicting a 20% increase, not the 40% to 80% that the Baltimore Sun is (falsely but unsurprisingly) reporting.

With that said, I ran my numbers again and even calculated a 50% increase in electric costs. Comparing a high seer heat pump with a fossil fuel back up to a geothermal closed loop horizontal system my results did change. My payback (not considering the increase in mortgage payments or the loss of investment opportunities) went from 14 years to little more then 12.2 years which still stinks!!!!! Thats not seeing a payback until the spring of 2018 folks.

If you figure in the additional mortgage payments alone using a geothermal system then I will be paying more every single month until my mortgage is paid in full. On a 20 year mortgage, I wont see any positive results until 2026. How in the heck can that be a good financial decision?

I concede with everyone commenting on this forum that geothermal is a fantastic system if you solely base it on the green concept. The problem I see with this forum is people are giving terrible advice to use geothermal to save money. The plain truth is geothermal is going to cost you more money then a conventional system even with the energy savings.

The math doesnt lie and if you want to argue those facts then youre using an emotional issue, not a financial one. Its understandable that someone give advise based on an emotional issue but it should be stated as such.

The rest of my post is pointed directly to SR. Steve, if youre going to say the tread is dead and continue to post comments, then the thread is not dead. Your attempts to push this issue looks like your doing so for self serving reasons. You steer people to your website and display information that does not give the complete picture. You should not be using this free forum to promote your business especially when you are not giving all the financial facts.

I also dont think the other members would approve of your email to me where you wrote, ("Since you have a personal relationship, I would forget about Garden Web, in fact I would not even bother talking to ANYONE else (except me of course)!")

And if your heat pump is almost a member of your family then I suggest you get out more often!!!


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RE: Up front costs of Geothermal heat pump vs. other heating meth

Mepop,

if your financial analysis shows that a geothermal system is not cost effective, then don't install one! As I said earlier, the colder the climate, the more effective a geo system is because of its constant COP, whereas an air-to-air system's performance drops off. If you're in a relatively warmer climate, air-to-air is probably the greenest and most cost effective system but you need to do a full end-to-end energy and greenhouse gas analysis and take into account the future (not easy to do admittedly).

Here in Quebec, it's very easy. The climate is very cold in winter (7200 HDD) and our electricity is almost 100% hydroelectric. Thus the effective greenhouse gas emissions of a geothermal system (and air-to-air) with electrical backup is zero. If your electricity is generated from oil/coal/natural gas, you have to figure perhaps as low as 30-40% efficiency in generating that electricity. If you use it for heat, then you can also factor in the COP of your heatpump (air or geo) and you may only get an effective performance of 85-110% in terms of greenhouse gas emissions compared to using fossil fuel directly for heating (where it is much more efficient than using it to generate electricity). Personally, I think it is an extravagant waste to burn natural gas to make electricity when up to 60% of the energy in it is lost. Much better to just burn it for heat directly.

In my case, the financial analysis was such that I get an immediate positive cash flow situation (since all the old equipment was at end-of-life and we wanted to install aircon at the same time) so it was a no-brainer. From a green perspective, given our clean hydroelectricity, again it was a no-brainer.

The only uncertainty is how fossil fuel prices will rise in the future (and there's no doubt that they will rise). If your local electicity supply is generated from fossil fuels, that will also rise at more or less the same rate. I'm sure that our electrical rates will rise much less fast than fossil fuel prices since the cost of the hydroelectric schemes has already been capitalized; even new schemes that are being mooted here are supposed to have a raw production cost of 1-2c per kWh - so I think *in my personal situation* we made the right decision going geothermal: lots of heating days, no greenhouse gas emission and cheap and stable electricity prices. Your mileage will vary.

Paul.


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RE: Up front costs of Geothermal heat pump vs. other heating meth

Mepop,

Until you've done a correct financial analysis, you shouldn't be chiding anyone for "giving terrible advice" about the investment value of geothermal. The math doesn't lie, but incorrect financial analysis misleads.

If you really want to know whether geothermal would be a good investment for you, re-do your numbers using net present value as the method of analysis. It is the only method that makes sense. No financial analyst would use any other method. What you have said in at least 2 posts suggests you're doing it wrong. If you like, send me an email and I'll send you an excel (2003) spreadsheet pre-programmed to do the calculations. All you'll have to do is enter the numbers.

Make sure you use the most accurate numbers possible for your up-front capital costs.

Don't use outrageous numbers for your escalation of electricity and alternate fuel costs. The appropriate numbers to use for energy cost increases are those that fit your own region's electricity supply (and gas, if that's your alternate fuel) and the regulation regime that is in place.

There will always be "bumps" in energy prices, but the only rational figures to put into such a long-term analysis is a smoothly escalating cost. If you model it on a spreadsheet, you can put in different cost increases for electricity (and gas or oil) and see what happens using different energy costs.

The correct discount rate to use is not your mortgage rate. It is the return you could get if you invested the money however you invest your money. That is likely to be higher than your mortgage rate.

Playing with the input variables is the only way you'll get comfortable with the real financial picture. Then, you'll be able to make a decision based on correct analysis. If you don't value the environmental advantages of geothermal, you're free to decide based on the numbers alone. But your decision will be an informed one based on a proper analysis.


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RE: Up front costs of Geothermal heat pump vs. other heating meth

Wow! I am glad to have read this thread if only to stop thinking our new geothermal system is going to cost so much. The difference between air-to-air and geothermal for us, is $4000 ($1000 per ton for the wells). And we'll get $1000 back from our co-op for using green technology. With our tight budget and small (well built) home we were a bit hestiant to spend the extra $$, but had decided it is worth it for a variety of reasons.

Living in the south, heat pumps are pretty much it for heat, AC is the biggie here and geothermal saves plenty on the summer cooling bill. Everyone we talk to with a geothermal system LOVES it (not sales people, homeowners). We will be insulating like crazy which may slow down the ROI a little (waah, a more efficient home :) but we plan to live here forever so what's 12 years in the grand scheme? That and some people do still place other priorities in life higher than money...


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RE: Up front costs of Geothermal heat pump vs. other heating meth

I have been a reader for a long time and hope that my experience will assist those who are doing this job themselves or maybe an insite on the topic. I am a private contract and in my research I have found that you dont have to be a professional or an expert to install once of these systems. I have researched companies on the web and found two in Vermont that will do free radiant floor plans for you and one in Washington state. I have also found a company from Ohio that will plan your geothermal lines for you also. So if you have the land it is cheaper to rent a backhoe and dig your own lines. if you like email me at taylorhome@cox.net and I can supply you with my info my 6000 sq ft home using geothermal / radiant heat......


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RE: Up front costs of Geothermal heat pump vs. other heating meth

Re: mepop

Wow!

Im sorry I didnt save a copy of our correspondence for my own records. However, your quote of my words will suffice. What I meant, and mistakenly thought was abundantly clear, was that since YOU have a personal and business relationship with this OTHER gentleman (as indicated to me through your correspondence), who IS an IGSHPA Certified Designer, you should take ALL your advice from HIM! He is the expert! Im saying this and meaning it literally; Im not being facetious. An IGSHPA Certified Designer is the highest level of competence. Why listen to anyone else including ANYONE on this forum, unless someone here has demonstrated a competency of equal value; particularly when this expert advised you NOT to install geothermal? When I said, "(except me of course)!" I was just inserting some sarcastic humor, which I plainly thought was obvious. Had I been serious, I would not have put that phrase in parentheses. I regret you took that so seriously as I think (I no longer have the copy) I explained that I am IGSHPA accredited, which may be fine, but is not the same thing as being an IGSHPA Certified geo-exchange designer who can design from A to Z a geothermal system for an large office tower.

As I have previously stated, my professional involvement with geothermal is primarily with industrial, commercial and institutional applications. The people I do business with are mechanical engineers responsible for large physical plants and institutions, elected officials, and developers. I doubt ANY of them ever visit this site or mine for that matter!

While I try to present the information on my web site accurately, no web site is the final word. Thats why I have links out to other sites providing even more information and other points of view. I have often encouraged people on this site to continue their research and I still do!

Suggesting our heat pump is almost a member of our family was another attempt to insert humor where things are getting a little over-charged.

For me, wanting this thread to be dead is because I see a nasty edge creeping into this.

Mike lighten up! Its not life and death!

Steve


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RE: Up front costs of Geothermal heat pump vs. other heating meth

Have any of you looked into solar space heating as an option? I ask because I have heard alot about green energy on this post. From what I have read it sounds like one of the cheaper sysems to install and run, am I missing something, or is it just not a highly considered option?


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RE: Up front costs of Geothermal heat pump vs. other heating meth

Since everyone else is focusing on the financial aspects, allow me for a moment to say something about the green one.

I will go on a limb and say that Geothermal systems are still "niche" markets. Not many people know what they are, even fewer have them.

Electricity, propane, natural gas, fuel oil, diesel (and more) are all capable of heating and cooling. As you work through your calculations, it's very possible that Geothermal will cost you more up front than these other "well known" methods.

As our population increases however, they will become less sustainable. Think when there were only 100k of us on earth. We could cut down trees, wear fur coats, burn fires, pretty much whatever we want -- with little impact to nature. Now as we push towards 7B people on the planet, things are different.

Things we've done that have caused damage have been outlawed (think freon, leaded gasoline, dumping into rivers). The alternative is expensive, yes, at first. But the price goes down over time. The same is true for all new things.

And it will be true for renewable energy, including Geothermal. Governments already know that we can not continue to abuse fossil fuel like we are doing. Many countries are already offering credits and incentives for homeowners to make the leap.

I am fortunate enough to be in a position to spend a few extra (thousand) dollars for this new technology in my modest 3,000 sf CT home. Judging by the size of the home you are building I would presume you too are in a somewhat fortunate position.

By going with this technology early on, we are helping to make this technology more mainstream and more available to the millions of others that will have to do it for it to make a difference. Not doing so, in my most humble opinion, is almost selfish. We, dare I say "the fortunate few", often pave the way that many others follow. Let's do it in a way that is the right way, not the most "self financially motivated" way.

thank you for your time,
A


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RE: Up front costs of Geothermal heat pump vs. other heating meth

What is it that drives the cost of geothermal up as compared to a conventional system? Is it the digging and drilling? is the equipment much more expensive?

If you install the system yourself, what kinds of dollars can you save.

Anyone have any thoughts on using geothermal with radiant heating?

great forum btw. It's nice hear all the differing viewpoints


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RE: Up front costs of Geothermal heat pump vs. other heating meth

There're two things which drives prices in a market: supply/ demand and volumne. Demand for geothermal equipment is relatively low and so this means that volume is also low. Price is inversely proportional to volume. Drilling, of course, adds to the cost. All that said, the equipment itself is not particularly expensive as it is pretty simple.

If you install the system yourself, you will save some money but at what cost? Where's the warrantee if there's problems? How can you be sure the system is sized properly (not that that is particularly difficult to do with programs that are available from Natural Resources Canada).

Geothermal works very well with radiant heating, but, again, it has to be properly designed. A water-to-water heatpump is actually quite cheap. We just had our second EnerGuide done and the auditor had installed his own system (though he is now a certified geo installer) and he was able to buy a water-to-water heatpump for around Can$1500. But you do have to know what you're doing to make it all work properly.

For any Canadian readers here, I'd strongly suggest getting an EnerGuide test done before installing any geothermal system as you will be eligible for a reasonable grant after you do it due to the energy savings. Our house went from dismal (22 on the EnerGuide scale of 0-100) to 82 (better than R-2000) after we'd installed the geothermal system and fixed the air leakage problems.

If you're serious about designing it yourself, you'll need some software to help. The Buildings Group of Natural resources Canada has pretty much everything you need (and it's all available for free). I'd recommend Hot2000 as a starting point to help evaluate your current house and try out some ideas for upgrades. The program does model geothermal heatpumps pretty well and the estimated running costs it came up with for my house are within 10% of reality .

Feel free to contact me if you'd like more information.

Paul.

Here is a link that might be useful: Natural Resources Canada free software


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RE: Up front costs of Geothermal heat pump vs. other heating meth

okay - did anyone find a good geothermal contractor in maryland???


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RE: Up front costs of Geothermal heat pump vs. other heating meth

I've been studying Geothermal for 2 years now. What drives the price up are the people building and installing the units. It costs less to produce a geothermal unit than it does a comperable air source heat pump. They are the same thing except you substitute the outside condensor coil for a water heat exchanger and the condensor fan motor for a small pump and you don't have the outside cabinet to build. The same geo unit will cost twice what the air source unit will cost. The additional cost are the indoor plumbing and the outdoor loops. I'm and Engineer and design and build equipment and machines everyday. The other thing here is all you hear is how hard it is to design one of these systems. I hate to sound like I'm paranoid but these people want to keep the cost of these systems high. I will design, build and install my own split two unit 4-1/2 ton system for about $5,000 dollars.
Mike


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RE: Up front costs of Geothermal heat pump vs. other heating meth

Interesting thread. I hadn't considered Geo as a viable alternative since our place is pre-exisiting, however, furnace is 10 years old and 80%, and we have no A/C - originally considered air source heat pump but am beginning to wonder about geo - there's quite a lot of it (at least in new construction) here in Kamloops, BC.

Again like Quebec, we have mostly hydro-electric which is currently about the cleanest energy that can be produced - and n gas is going up reasonably steadily...

In the naysayers book, and some of the other calculations, people are assuming fossil fuels will follow current pricing trends.....but are forgetting things like Peak Oil. In the past couple of years, I've read that the oil industry spent MORE on exploration than revenue GAINED from new sources, in other words, it lost money on todays prices vs new sources found.

This won't remain a steady curve, it'll become logarithmic....and what about rationing? If you look at the more pessimistic views of the world and oil, things are going to turn pretty nasty in the next ten to twenty years....and I'd like to know I can still at least be warm at home, if I'm walking to work....

I don't think it's a matter of which countries the West can invade to secure cheap or available oil, with emerging countries becoming such big users too, for one, it'll be scarce, and the time will come when we have to husband our resources....and burning oil or gas just for heating will become unsustainable.

When I lived in New Zealand in the late '70's-early 80's we had a bout of fuel rationing...believe me, given finite allocations, I'd rather heat my house cheap and still have a car to drive, for example.


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RE: Up front costs of Geothermal heat pump vs. other heating meth

Hello,
How many tons of equipment does that $110k cover. For that much money, I can send my kid to college to become a doctor, and still install a wiz-bang geo system.

In all calculations, the more work the cheaper it gets. When doing a rough estimate I use 600 sqft per ton for a guestimate. 12.5 tons at $110k. Get real. That should be 12 holes and 2-3 systems. If a system goes for 15k then you are into 45k tops. Drilling 12 holes should be much cheaper per hole than a smaller job.

I recently found a manufacturer that makes an airhandler with a AC coil, Water coil and electric strip. The water coil is approximately 40k btu, the AC can be 4 tons. The cost is under $3k retail. The company makes product for York. The water coil can be used for Hot Water preheating or as heat.

As I have said many times in the past get more bids.


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RE: Up front costs of Geothermal heat pump vs. other heating meth

If I were going to spend 110K for such a system (I wouldn't), I'd think about investing that money to get a fixed return. In that way the monthly heating bill would be taken care of (for the foreseeable future) and most of the principal would still be available.

I am interested in vertical loop systems and in particular the electricity costs involved in geothermal vs. the heating/cooling and electricity costs in conventional efficient systems. Finding definitive answers has proven rather challenging! We intend to build a home in Kamloops, BC (western Canada)with a total area of 2650 sq.ft.(1550 up and roughly 1100 down + garage) but if we could heat the garage for free, we'd do that as well. It will face south and receive tremendous sunshine in summer along with very high temps, but be cloudy and fairly cold in winter.
We're considering an efficient Carrier system because we'd NEED to add humidity in summer. Not only would dryness affect people,but also flooring, furniture and paintings, etc.
Any comments? Especially from Canadians or others who live in DRY climates.
Cheers.


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RE: Up front costs of Geothermal heat pump vs. other heating meth

I am in the process of getting geothermal bids for my remodel in Maryland, outside of DC. Can anyone tell me what I should expect to pay to heat and cool 7500 sq.ft. on a 3 zone system?

So far, I only got a ballpark number from the firm that claims to be the only "experts" in the area. It was far more than double our original figure for a traditional system (combined electric heat pump and propane gas).

My GC says the original HVAC contractor is going to come in with a more reasonable number and that they have experience with geothermal too. How important is IGSHPA certification?

I feel like the "experts" are charging quite a premium for their expertise, but in reality they have a kid with only one month's experience designing our system. We're determined to do geothermal for the "green" reasons, not just to save money in the long run, but our resources are not unlimited and I don't want to overpay. Any advice?

Thanks!


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Geothermal- What's the best?

We have decided topurchase ageothermal unit for a house we are remodeling. So far we have received two quotes one for $11,000 for a Trane and $16,000 for a Waterfurnace premier with desuperheater both of these are 3 ton units. Now we are responsible for the digging of 350 feet of 6 foot deep trench. We were told that for $4,500 they could lay pipe and bring it into the house. We are now thinking maybe we should just buy the unit ourselves and install it. What does it cost for similar 3 ton units with desuperheater? We have no idea.


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RE: Up front costs of Geothermal heat pump vs. other heating meth

Bisonjam, you can search on this forum for all the comments I've made about our three ton Climatemaster, including desuperheater, with I hope a zillion caveats. That said, we're glad we did it.

We paid $7659 for the unit itself, including installation and minor sheet metal modification. We paid quite a bit more to drill a well (it's an open loop system; would have been better to have a closed loop like yours), upgrade our electrical service, deal with associated plumbing, excavating, testing, and so on. All told about $14,000, not all of it chargeable to the heating system.

We did a LOT of the work ourselves, but would have had no clue to the wiring of the heatpump unit itself; I would suggest that you want the dealer to install the system (it should not be a large part of the cost) and then if something goes wrong he can be held accountable more readily.

We needed to rent an excavator to dig a fairly short trench (24 feet, I think) about four feet deep and only 18" wide. I did that at considerable savings, but I had to worry about ripping up the sewer line, caving in the house foundation, backing into the garage, and so on. At one point I was near tears, but my wife got me back on track! If you have plenty of room you can no doubt dig a nice, wide trench cheaper than you can have it done, and it is a lot of fun, actually. My mistake was not giving myself enough time and working too long in the sun without breaks- and, I didn't have much working room.

So far we've been happy with the Climatemaster, but it's only about 6 months old.

Good luck,

Mark


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RE: Up front costs of Geothermal heat pump vs. other heating meth

i wonder what mepop's oil bills will look like this winter...yeoch!


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RE: Up front costs of Geothermal heat pump vs. other heating meth

I don't know if this helps any but the guys who were estimating my place worked up numbers for geothermal and they were just about twice the cost of a regular heat pump (14 to 17 K vs 7 to 9 K standard). This they attributed to each geothermal system being a special built unit. They said that in 5 years or so they should be mass produced and the costs will come down.


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RE: Up front costs of Geothermal heat pump vs. other heating meth

Re: qbert

As the cost of energy goes up geothermal becomes more of a bargain. $17k sounds like a good deal for a properly designed & installed GSHP. The cost of drilling is not likely to EVER come down so dont wait! At $1M a copy, the cost of owning & maintaining a state-of-the-art drill rig is like keeping a plane in the air! Dont dream that its going to get cheaper. The maintenance & replacement cost of these machines will only become much higher; guess whos going to be paying?

IMO

SR


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RE: Up front costs of Geothermal heat pump vs. other heating meth

I am currently looking into installing a Geothermal system as a retrofit on our 12 year old house mainly because of a combined Federal and Provincial grant that would pay for almost 30% of the cost of the system but that still means a 17k - 18k investment

My problem at the moment is the calculations all the contractors of these systems use indicate our current energy use ( propane ) should be far, far higher than they actually are which , of course, skews the calculations on how much the system will save us over time. Either I have a much tighter home than I suspected or these calcs they are using are designed to give higher numbers to show higher savings.

I would very much like to hear from anyone who has converted from a natural gas, oil or propane system to Geothermal. Specifically how much did your electrical bill increase as a percentage? 5% ?, 10% ? 50% ??

This , for me, is the sticking point at the moment and I need to hear from real people living in real houses who have made the change over .

Don


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RE: Up front costs of Geothermal heat pump vs. other heating meth

Re: d.goodbrand

We live in a semi-detached bungalow that is a mirror image of our neighbor and $ave 86% on heating compared to them. We set our stats at the same temp.

You have some homework to do if you want any of that grant money. First of all, your system has to be designed, installed and drilled by CGC accredited designers, installers and drillers. You must have (for submission to the CGC) heat gain/loss calcs done to the CAN/CSA F280 HRAI standard. Expect to pay a premium to have this premium, Certified CGC system installed. Guess where your grant money goes

SR


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RE: Up front costs of Geothermal heat pump vs. other heating meth

OK, you save 86% on your heating bills but how much higher are your electrical bills than your neighbour and what kind of heating is he using now? ( and how old is this semi-detached bungalow ) Does that 86% include both the increase in your electrical bill and the cost of his heating fuel?

There are so many variables involved with this that it's safe to say everyone will have a different end result. My house is already nearly airtight and is insulated almost to the maximum and at 2900 sq feet I use on average of 2300 litres of propane ( about 608 US Gallons ) a year to heat the house AND the water heater.

Re Grants. To install a trenched closed loop system and a 5 or 6 ton unit will cost around $25,000 . The grants will cover roughly $7750. To get the grants we needed to hire an approved energy auditor which recorded all the systems in the house covered by government grants and do a air loss test. This I have already done. Once I've completed whatever work I decide to do I call them back, they verify the work was done and submit the paperwork to the goverment . The end result is installing a system of that type would cost me between $17,000 and $18,000 after the grants are taken into account.

The problem with all of this is each house is different. If someone's living in an old farm house with little insulation and they are paying $4500 a year to heat it with oil for example the Geothermal will pay for itself faster because it's that much more efficient than oil but an already energy efficient house takes longer to realize a positive benefit in the wallet at the end of the year. By the calculations I've been given and from what I've researched my electrical bill will go up about $100 to run the Geothermal and that is primarily why I'm interested in hearing from anyone else who installed one of these systems after running previously on oil, propane or natural gas.. ....how much has you electrical bill gone up running this thing ??

In my case that nearly doubles my electrical bill and although I can expect to eliminate an averaged propane bill of $166 a month the added $100 a month average increase in my electrical bill means my net savings per month is only $66. Given the system will cost me nearly $18,000 to install after the grants saving $60 month takes 23 years to break even and even when I factor in that in ten years it's likely that both electrical energy and oil, gas etc will double it still doesn't bring the break even point down to anything reasonable that is why I would like to see what increases others have seen in their electrical bills as that is my sticking point on this system.

A poster at the start of this thread said their " kw usage has more than doubled " and if that is typical then for me, even in the long term this doesn't seem to be a smart way to go because one thing I do know is Ontario is going to "smart" meters and all "smart" meters do is screw you over a bit more during the times you want to use power. It's cheap at night during the low peak times but that defeats the entire purpose of a programmable thermostat that would be turned down at night and turned up just in time to hit the peak rate. The "social engineers" may think they are doing this to save power but the end result is a cash grab that I calculate will be somewhere between 5.5% and 11.4 % above what I'm paying now because most things in the house will be running during the high or mid peak range and that's another reason why, in my case, Geothermal seems not to be the best solution even though I really like the whole idea of geothermal, However, the math isn't adding up for me so I would be most interested in hearing from people on this

Don


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RE: Up front costs of Geothermal heat pump vs. other heating meth

Don,

I put in geothermal last year, and I worked with a dealer who provided me with the equipment so I could install the geothermal myself. I received six quotes for the full installation that started at $28,000. I did it myself for just over $16,000 total ($8400 after the grants). This includes the costs to contract out the ductwork (~$2000) and trenching (~$1800). The dealer provided me with expertise, an energy evaluation, and even came to my house to fuse the pipe and fill and purge the system. He provided me with the certification required to receive the provincial and federal grants.

Most geothermal installers are overcharging for these systems because they would rather install less systems and make more profit - they only want to deal with the super rich who will pay the $$ to be green.

But to your point, my average electric bill before geo was $120 per month in the spring and fall with no heating or cooling turned on. I heated my house with a combination of a pellet stove for the upstairs and electric heaters in the basement.

From Oct 05 to May 06 I spent $1900 on electricity and $1300 on wood pellets, and my second floor was cold!

From Oct 06 to May 07 I spent $2400 on electricity (colder winter, tenant turned up the heat in basement) and $1200 on wood pellets.

My geothermal went in last September (07).
This year, from Oct 07 to May 08 I spent $1647 in electricity.

If I take my average cost of electricity (based on the past three years in months where I did not heat or cool my house) of $120 and subtract that from my electric bills from Oct to May of this year, it cost me $656.13 to heat my house this year, and I had the thermostat set to a comfortable 22 degrees C. It is a 2200 sq ft house in Southwestern Ontario. The savings were undeniable.

If you are interested, the dealer I worked with is at www.NiagaraGeothermal.com.

Here is a link that might be useful: Niagara Geothermal Energy Solutions


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RE: Up front costs of Geothermal heat pump vs. other heating meth

Thanks for the info John. It's been very helpful.We don't live very far apart it seems so I will look into the dealer you mentioned

Don


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RE: Up front costs of Geothermal heat pump vs. other heating meth

I know this thread has been going a long time, hopefully some folks will still look at it.
I'm planning a 2100 sq ft single story home in Oklahoma to build next year. Its out in the country, with a high priced coop electric.
Have traded emails with a geothermal installer in the area. He installs Climatemaster systems, which are built here in Oklahoma. Seems like a knowledgeable pro.

Rural heating around here is traditionally propane. According to the installer, a backup heat source is required by code. I am a big time wood stove user, and planned for this to be my only back-up, which does not satisfy the code requirement. He recommended using a small heat strip system to satisfy the code, if that's what I wanted. Said the cost would be trivial in the overall budget.

I still have not decided whether the geothermal is right for me, this installer is sending me literature that hopefully compares some installation costs. Its all a cost issue for me. Will be in the house many years, and worry about increases in rural electricity costs and propane.

Very difficult for anyone to come out and say "well the geothermal would be around 20 grand and convention 5 or 6 grand"
Would love any input, thanks.


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RE: Up front costs of Geothermal heat pump vs. other heating meth

If you plan to be in your home for many years I would recommend that you invest in your home by installing a geothermal system. That will have 2 immediate effects. First you will increase the resale value of your home and second you will save a tremendous amount of money on energy - from year one.

Some food for thought as you age in your home, first, when you retire and may be on a fixed income, you want your overhead to be as low as possible. No other form of active heating and cooling will be as inexpensive as geothermal. Second, as you age, you may not be as able to deal with all the firewood, so guess what, your other source of heating will become your primary source. Geothermal will have the lowest costs.

Should you choose geothermal, have your contractor install the proper size aux heat strips for the backup as if thats the only system available. Its cheap insurance and it wont be called on much.

SR


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RE: Up front costs of Geothermal heat pump vs. other heating meth

check out www.geothermal-house.com and see the efficiencies that we have accomplished with geo units, we are in the process of putting actual heating bills so the people out there can compare to their homes


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RE: Up front costs of Geothermal heat pump vs. other heating meth

Hello Everyone,

Full disclosure first: I work with the CGC, the Canadian GeoExchange Coalition (CGC). We just issued the following consumer advisory which I thought might help:
http://www.geo-exchange.ca/en/canadian_geoexchange_coalition_warns_of_contractor_nw124.php

Canadian industry leaders, utilities, and our governments in 2005 turned away from the model that the US has and developed a national quality program based on CSA standards for design and installation of geo systems. CGC Accredited Installers and Designers meet a higher standard - not simply full training but insurance, proper licensing, previous experience, a written promise to uphold our Code of Conduct and work to best practices (including properly documenting systems and treating customers fairly), and the possibility of having to fix any honest mistakes or losing their accreditation, in the face of consumer complaints. The federal and several provincial governments require our quality program for their incentive, and the Canadian market is growing much more quickly than the US market as a result.

A program history is here:
http://www.geo-exchange.ca/en/accreditation_program_description_p34.php

Our concern and our members' concern is that consumers are at the mercy of unregulated and uncontrolled industry at this time.

In the United States, there is no ASTM Standard for design or installation of these systems.

Here is a link that might be useful: Canadian GeoExchange Coaltion


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RE: Up front costs of Geothermal heat pump vs. other heating meth

Has anyone installed a geothermal heat pump in Maryland? We are also planning to build a new home in central Maryland. I would like to know how warm the system is in the winter (do you have to use the backup system much) and have you noticed a cost savings to monthly heating bills as compared to your neighbors? Finally, can you recommend a local geo contractor?


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RE: ROI on resale of geothermal

I understand from real estate websites that I might get 50 percent back on the cost of a geothermal system - but in today's frantic oil climate, I'm wondering if this may no longer be the case. The house is 1500 square feet, with central air, the monthly KH use for winter is about 425, the highest in the summer is 1100, and I hope to also install solar to take care of part of the load, once tax incentives arrive (if ever). Installation of geothermal is projected to be about $15,000. I have a 1000-gal fuel oil tank, the bill for which causes me to blanch.
Any thoughts on whether I can break even on the $15,000 when I sell the house (which will be five years or less)?


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RE: Up front costs of Geothermal heat pump vs. other heating meth

Re: lshemick

5-fill-ups at 500gal a shot at $3/gal is $7.5k (50% of you geothermal investment). Let me guess, your 1000-gallon oil tank is buried right? How much do you think youll have to reduce the price of your home when you tell your real estate agent about that buried treasure!

Geothermal installed at ~$15k is a no brainer!

SR


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RE: Up front costs of Geothermal heat pump vs. other heating meth

It boggles my mind that people think 10 years is a long time. After installation, you pay each month (including financing) about what you were already paying anyway (probably less). You do it for 10 years, (especially with all the new government incentives, rebates, and low-interest financing now available) and after 10 years you're paying a ridiculously paltry amount for heat. Of course it makes sense.

Think of the payback over 20 years once that loan is paid off! Even if you only end up paying even 1/2 of the normal cost over that period (including the cost of your system and electric), you're still saving substantially. I know not everyone lives in a home for that long, but seeing low energy bills does increase home values. I've seen homes sold almost immediately with their main advertising point being their geothermal system even in our horrible present climate while others still linger on the market. Not only that, but why not decrease your monthly bills slightly (before the loan is paid off)? Slightly lower bills, a higher sales price which will pay off the rest of that loan - still makes sense.

We had someone come out to our house and they specifically calculated everything from current estimated heating costs, heating/cooling with geo, then savings/payback period. This was a full service option, including thermostats, etc. Finding that should not be difficult.

One argument I saw above made no sense. If it really is worth insulating your home to use a normal system, it is a no-brainer to insulate your home using geo. Whether you decide to use geo or not, you can't say, "Well, normal is better, because we insulated, too." That makes no sense. Insulate either way. Then compare.

The financial analysis does not make much sense, either. Yes, it would be wonderful if we could just stop paying the oil company, live without heat, and invest that money! Realistically, while you could want to put away the whole $25,000, you really are still using it for heat either way over those 14 years as projected. Geo, with the loan, electric, etc, will cost about the same each month as heat before the loan is paid off, so you can't just pretend that money could be invested elsewhere. Use it upfront with geo, use it over several years with oil, it makes no difference. That money is being spent on heat. Should it be spent on something worthwhile, or just, at the end of 10 years, have you still spending the same amount on more heat with oil?

Geo will typically initially cost you a little less (including the loan and electricity) per month than you would be paying otherwise, then suddenly drop dramatically to only the cost of using the system as soon as that loan is paid off. That's money you would have spent anyway each month with your normal system (even though some of it went to financing, it is still less that what you would have paid for oil). Then suddenly, once the loan is gone, you actually DO have perhaps $1,000 a year in money saved that you can invest if you wish over 10 years.

If, with financing costs, it does cost more per month than your normal heating system, that's one thing; but if not, the argument that it is wasting money is not valid. You're spending it anyway. Might as well spend it on something that will, in the future, save you tons of money. (Not just a little, a lot.)


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RE: Up front costs of Geothermal heat pump vs. other heating meth

hey ya'll, i've been reading these forums for a while now and i thought i would just put my two cents in. i currently own a 4900 sq/ft school building in wich i am forced to stay in about a 1/6th of the livable space due to heating costs. currently it has all electric baseboards!! everything just to heat this small section of the house runs me around 300 a month and this is not living too comfortably. every person i have spoke with about geothermal has been pretty close to eachother. system install would range from 30,000 to 43,000 depending on the system i go with. now the huge selling point for me is that for the same price it costs me to heat my tiny portion of the building i've been living in, i would be able to heat the entire building and stay comfortable. so for the additional 300 i would spend on my mortgage i will ultimately be getting a greater return and will be able to pay my house off much quicker than the original 30 yr loan i have. the added bonus that the building is split into apartments that i will be renting out will also make this a much worth while project for me.


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RE: Up front costs of Geothermal heat pump vs. other heating meth

Up front cost for geothermal can be as much as twice as a conventional
system, however with an average of 50 percent savings on energy and
a 30 percent federal tax break it more than justifies the upfront cost and the longevity of the system is three rimes that of a conventional one


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RE: Up front costs of Geothermal heat pump vs. other heating meth

Look into an Alternative Company called Lee Alternative Energies, LLC
they have been doing Geothermal and Solar for over 25 years
and even if you don't use them they will be glad to steer you in the right
direction at know cost 410-667-1059 or
863-558-6835


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RE: Up front costs of Geothermal heat pump vs. other heating meth

The 30% tax credit on installing a geothermal heat pump system in the USA caught my interest. The 30% tax credit will run until 2016, so no real big hurry.

So I figured that my monthly costs for gas and electricity run about $275. So if I were to save the entire amount by installing a geothermal system, it would take me about 6 years to pay back a system that costs me $30000. This is calculated based on ($30000 - $10000 ) / 12 / 275.

If I save 50% in my monthly electric and gas bill it would be about 12 years.

The $30000 is just a number I pulled out of a hat.

If I lived in California and not Missouri, my electric costs would be about 2.5 times as much, so it would make it a lot more attractive. I believe in doing things Green, but I am still on the fence.

By the way, electricity in my area is about 0.04 per Kwh.

Natural gas from Lacleud Gas is cheep also.

I will keep you updated.

Another good tip for you follows:

ClimateMaster Tranquility 27 has the following specs:

ClimateMasters Tranquility 27 series of heat pumps are available in sizes 2 tons (7.6 kW) through 6 tons (21.1 kW) with efficiencies up to 31.5 EER and 5.1 COP.

The ERR and COP are the highest I have seen when comparing systems. I don't know how much the system is, but I am researching it right now.


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RE: Up front costs of Geothermal heat pump vs. other heating meth

We installed a closed loop Geo system in October of 2009. It was retro-fitted into our farm house and we were told that it would cost about $70.00/mo in the coldest winter mos to run (we live in Michigan). We paid $200/mo for electricity before the install. Now we pay $400/mo for electric ALL YEAR ROUND on the budget plan. We keep the thermostat set at 72 and heat 2500 sq ft. Today we had to call the installer because the condenser quit working and they are installing a new one tomorrow. Until then we will have to run it on auxillary heat (who knows how much that will cost over 24 hrs). This system has been a complete waste of money for us and is, in my opinion, only efficient in a new build. Also, it runs very loud and sometimes wakes me up at night. Go with an outdoor wood boiler and save yourself serious cash. I figure for the $25000 we have invested in the GEO we could've bought a wood burner and 15 years worth of wood! FYI


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RE: Up front costs of Geothermal heat pump vs. other heating meth

Has anyone used the savings calculators on many of the geothermal websites? Do they accurately reflect your savings? I am considering geothermal to either replace my oil fired boiler or use the oil as a backup. My house is about 4400 sq. ft and located in central Maryland. The cost after rebates will be $39,500. The system will consist of two 3 ton units and one 2 ton. Any comments would be welcome.


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RE: Up front costs of Geothermal heat pump vs. other heating meth

To the guy in Maryland proposing the $39,500 system. How much does your electricity currently cost? I'm talking the total rate per KW delivered (divide the dollars by the KW used)?

Do you get alot of below freezing (32F) weather in Maryland?
Do you have access to natural gas?


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RE: Up front costs of Geothermal heat pump vs. other heating meth

I am trying to get a real world price.
I have a 1400sq foot per side duplex(about 2800-3000 sq feet total). I am looking at getting an open loop,( I think System) installed. Going to be using my current well and not drilling a second.
I have a quote for installing a system that will heat both sides of the duplex using my current hot water baseboards. Contractor was highly recomended by well driller that put my well in. Total cost around $20K. Both sides use about 500 gallons of oil a year(1000 total) for heat and hot water. At Current rates thats about $400 a month for oil. I could rent the other side for an extra $200 a month heated and I figure pay off the 20K in about 5-6 years, so for me seems to make sense.

Does $20k sound about right to install a Geo system?

I live in New England where winters are long and cold.


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RE: Up front costs of Geothermal heat pump vs. other heating meth

Re: roadrnnr

So you're planning to install an open loop water-to-water geothermal heat pump system. What type of hydronic radiators do you have now? What is the current supply temperature of water from the boiler? How do you plan to make up the difference in Btu delivered between your present system and a geo system since there will likely be a MINIMUM of 25-degrees less with the geo system?

"Does $20k sound about right to install a Geo system?" I doubt it; this is not a simple swap out of an oil boiler for gas. You have to think about efficiency, zoning, controls, variable speed circulators, A/C, DHW, buffer tanks, backup boiler, electrical panel requirements, plumbing, additional radiators and on and on AND ON.

I would guess $45k ~ $60k (minimum) would be more like it.

BTW: Assuming your existing well can pump the required gpm/hr, how deep is your well, what will pumping cost as this is not a closed (balanced) system, what do you plan to do with all that water and what happens if the level or flow of the water table drops?

I'm not trying to talk you out of this. I think it's a great idea - if done right and you're truly prepared for the challenges and CO$T$ ahead!

IMPO

SR


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