Forgot to mention that I plan on being in the house as long as I can (50 more years God willing). And I have a family my wife and 2 daughters 12 and 10, and an 8 year old boy (as this info may help figure out if getting the $900 holding tank is worth it.. how much water will my girls end up using..lol)

Do you realize by your model, you use a/c in Feb?
It looks like your a/c is more like $200

So your HVAC costs are $850 a year. With a new hybrid system, you are probably at $600 a year. Geo probably $450.

Somehow it looks like you are comparing your seer 10/90% situation to geo when the alternative is 16/95%.

The other thing is that somehow spending $6000 to save $275 a year is a huge money making idea when it really isn't. Factor in greater than background energy inflation helps but it doesn't look like you did that. Also 4% would be an abysmal long term return.

Thanks for the reply David.

Yes, by my model, I'm adding AC into my February bill... which I know is incorrect, but at least I had a starting point (was also think that we ran our Christmas lights into January which is why I used the March bill).

What I'm struggling with, as you mentioned is how to do a good comparison with what I have today and the two other alternatives. I'd like to figure out how to do the Geo to the Hybrid option. Thus, the calculations you provided would show Hybrid saving me $250/year and Geo $450.

Not sure what you mean by background inflation. I used 4%/year as my energy inflation amount.. so is that what you're meaning?

Finally, I would agree 4% is bad, and used it in the above example, but even using 9.5% return doesn't change the difference by too much unless I can show a greater difference in price. Changing to 9.5% roi, current system utility cost for the Hybrid at $600, and Geo at $450, then the Hybrid solution comes out $5,200 on the positive side.

Thanks again.. glad to be getting some good insight on my situation.

I didn't see 4% as an energy inflation #.

Background inflation I take as overall inflation - like 2% lately. Using energy inflation at 10% often helps justify things like geothermal. I think it is safe to assume that energy costs will climb faster than background inflation. This matters some because your ROI is affected by inflation - particularly in the bond market.

I bet even at 7% roi, the hybrid solution comes out ahead.

Who knows what reality will be? I personally would go with 7% roi and 7% energy inflation. I like that because then I can ignore both (to some degree). There is the tax issue which hurts your ROI. For most people, the real issue is the 5% mortgage rate. Then if that is tax deductible, then justifying spending more on energy efficiency is pretty easy.

You stated:

"The final tidbit I have is that there is a company here in Indy that has a patent on a "vertizontal" drilling system that takes out a 10x10 hole and then drills at an angle (and I'd get about 600 feet of loop through 4 150 feet holes drilled from the back of my 130x60 foot property to the front... probably about 40 feet below my house at some point). The option for vertizontal drilling is currently offered at the horizontal rate which "expires" at the end of March (a $3,400 difference... shananagans?). "

Ask the company if the patent has been issued. If it has ask for the patent number. I am skeptical a method of drilling can be patented.

I don't understand why the price needs to increase by $3400 next week. This is a sales pressure tactic.

I was having a hard time following your calculations. The questions to be answered is how long will it take to recover the additional investment in the geothermal system vs. the hybrid system. How confident are you in the additional savings the geothermal system will provide? I assume the installer does not guarantee any savings.

How long does the underground last until it has to be replaced?

Hi Mike,
Thanks for the reply.

They have applied for a patent for their vertizontal drilling technique. They may or may not be able to get it patented, but, to me, it's the most palatable way as it requires less heavy equipment and won't tear up my yard as much as horizontal would.

A $3,400 discount is their "March" price, but it won't push me into making a decision.. it is just a sales tactic.

Regarding savings.. that's where I'm really stuck. From David's earlier reply, my HVAC bills are in the probably in the range of $850 to $1000. GeoThermal's typical savings vary from 30% to 60% from what I've read. As I have inexpensive natural gas and electrical costs currently, then I'm guessing it'll be closer to the 30 to 40% range. What I don't know is how much I'd save with a Hybrid. I've tried using some of the on-line calculators, but just can't seem to come out with a good number. Essentially, if I go from a 3 ton 10 SEER to a 3 ton 16 SEER, how much should I expect the AC portion of my electric bill to drop? One contractor said it was 50% and another laughed and said, no, it's closer to 20%.

Underground loop has a 50 year warranty. The Water Furnace being proposed is a NDV038A111, plus electric heat packs, and a deSuperheater (though I'm not sure the ROI is there for the $900 holding tank).

If you didn't have access to natural gas, then geothermal could be a good option. However it is hard to complete with a 95% efficiency natual gas furnace.

You should take the conservative approach to calculate the ROI.

I totally agree Mike. That's why I'm having such a hard time with Geo being the best.

However, with these numbers..(and if you can comment on the % benefits, that would be great)

Cost/ AC Heating AC Heat
year Benefit Benefit Cost Cost
current $840 0 0 $374 $466.87
hybrid $667 30% 5% $224 $443
geo $420 50% 50% $187 $233

A Geo solution yields about a $4000 benefit over 20 years.
Any idea what the cost of installing a Geo unit will be compared to a hybrid in 20 years :)?

David, as a follow up to your mortgage comment..
My mortgage rate is actually a variable rate home equity loan currently at prime minus 1% (2.25 percent). I only have a couple of years left and realize that I'm running a somewhat risky gambit doing it this way, but it has paid off well over the last two years (going from a 6% loan to 2.25%). I would expect that I'll finance most of this solution by increasing my home equity loan and then paying that amount off in 2 to 3 years hopefully.

Its true, natural gas is pretty inexpensive right now but will it always be? Thats a great quoted price for the geo-system. It would be great if you could get the geo and keep the natural gas for the extra cold weather.

What is your delivered cost per KW for electricity?

Please note that the $12,740 is after the 30% gov't rebate, but also includes the $900 holding tank that I don't think I'll get.

Rates are as follows:
Customer Charge
For bills of 0-325 KWH per month $ 6.70 per month
For bills over 325 KWH per month $11.00 per month
Energy Charge
Any part of the first 500 KWH per month 6.70 cents net per KWH
Over 500 KWH per month 4.40 cents net per KWH
With electric heating and/or water heating
over 1000 KWH per month 3.18 cents net per KWH

So, if I switch to GeoThermal, then it would seem that my electricity rate will drop from 4.40 cents to 3.18 cents (which would be huge as I can't seem to get my family to turn off lights and I have too many computers running in the basement..lol). Does that seem correct?

Your electricity rates are low. Can I run an extension cord to your house? :) I am paying 18.5 cents per KWH.

My only advice is to talk people who have had a geothermal system installed in their house and get their first hand opinions before making a final decision.

Your electricity rates are low. Can I run an extension cord to your house? :) I am paying 18.5 cents per KWH.

My only advice is to talk people who have had a geothermal system installed in their house and get their first hand opinions before making a final decision.

For a minor fee, sure you can run your extension cord..lol.

I'm suppose to get some references tomorrow from one of the local contractors and I'll give them a buzz. Supposedly there's a guy in my neighborhood that got one recently, but I've yet to hear from him.

Also, I have an assumption that if I go with either Hybrid or Geo, then I should get the 3.18 cents rate for being "all electric". Which leads me to the question, is that for all my electrical usage or is it only for my HVAC portion?

As always, this place always provides some great insights! Thanks to everyone that has responded to my questions.

At 3.18 cents/kW & a COP of 4, you'll be paying ~.795 cents per kW of heat (or cooling) delivered - let them run all the computers they want!

BTW: $900 is a ridiculous amount for a buffer tank!

SR

I hope you put that 3.18 cents rate into your model. It just makes geo that much harder to pay for itself. Your $600 hybrid bill just went to $450 and geo went to $340. A couple of LED or CFL lights pay off decades earlier. Or low energy use TVs or computers.

I have not put in the 3.18 cents as of yet as I was not 100% certain if it applied to a Hybrid solution, which it sounds like it would. Thus, a Hybrid and Geo will both theoretically cut out around $600 from my yearly bill of $2000. So, it really sounds like a GeoThermal is not going to be my best option.

Perhaps I'm stressing too much over what could be a swing of roughly $4,000 one way or the other over the course of 20 years.

So, now I need to figure out how long to keep my current system..lol. I missed out on last year's $1,500 rebate and now am looking at $500.. but can be saving $600 for being all electric. Thus, the longer I keep my current system, the less I'll be saving overall.

Was just reading some other posts and it would seem I may need to figure in the costs of air-duct improvement to take full effect of a 16 SEER Hybrid or only go to a 13 SEER which would work with my current duct work. Looks like I may need a manual J calc done.

Any idea if a GeoThermal has any sort of duct limitation like a Hybrid 16 SEER option "MAY" have?

"Vertizontal" drilling system" sounds very much like the EarthLinked system.

SR

I am curious to know what type of duct improvement will be done to increase the SEER rating from 13 to 16.

I had another guy give me a quote of $13,000 to put in a Carrier (ClimateMaster 31?) Geo Thermal unit with a "Slinky" installation of the loop (2000 feet of loop over 120 feet of "trench" 7 feet down). The guy is an independent contractor, fully licensed, bonded and insured and has 10 ratings on Angie's list (all A's, some big jobs, some small jobs). He speaks highly of the company that quoted me the $18,200 install and said he's a great friend of the owner (small circle of HVAC buddies??)

He said a "drilled" loop would be $17,000 as he has to contract out the drilling and well, it's simply expensive.

My question now is, "What are the general thoughts around a Slinky install?".

Regarding Earthlink System... yes, from the one pic I found Googling it, it seems to be basically the same concept.

Regarding duct work.. to clarify, what I've read on other forums is that if something bigger than a 13 SEER is installed, there could be a need to redo/improve ductwork to handle the greater force of air (but I really don't have any real details on this.. only going by what I've read.. and could be completely off??)

"What are the general thoughts around a Slinky install?"

The bottom line is despite personal preferences for one method over any other; any properly designed & installed closed ground loop is basically as good as any other - in terms of performance (heat extraction & diffusion). There may be differences in head resulting in greater or lesser power required to pump the fluid. This should be largely mitigated by proper design & installation practices.

In plain English - there is NOTHING wrong with a properly designed & installed slinky!

SR

There is not greater airflow with a higher seer system. There is not cooling or heating - just less electricity use.

The duct work has little relationship to the SEER rating. If the duct is undersized for a 16 SEER unit, it is equally undersized for a 13 SEER unit. You might need to modify the duct connection to a bigger coil, but this is not a significant amount of money compared to everything else.

Ah ok... so then for my calculations, I'll need to simply make sure the 13 or 16 SEER "fits" my duct connection and then need to figure out if going from a 13 to a 16 is worth it.

SR.. thx for the slinky info. I got another email from the contractor that said the trench would be about 7 feet deep and 1 foot wide, thus, the average depth of the coil would be about 5 feet. For some reason I thought the minimum ground depth, here in the middle of Indiana, would be more than 5 feet.. like 8 or so.. but I'm probably wrong.

"The trench would be about 7 feet deep and 1 foot wide, thus, the average depth of the coil would be about 5 feet."

This tells me that they would install a vertical Slinky, probably with a backhoe. A chain trencher, 'Witch Ditch' would probably be narrower than 1 foot wide and would be a faster install, unless soil conditions do not permit this technique.

Avg. depth of 5 feet could mean that the loops are 4 feet in diameter meaning the top of the loop may be only 3 feet below the surface. If this is so, then this may not ideal. Top of the loop should be at least 4 feet deep (minimum) or deeper. Digging should be contracted to someone with the right equipment (chain trencher, 'Witch Ditch'). Even then this may be less than ideal in that it's harder to flush a vertical slinky (standing up) than a horizontal slinky (laying flat) in that any trapped air will reside at the tops of these vertical loops. This trapped air could be a serious impediment to liquid flow as it may form an air lock thus shortening or short-circuiting the entire loop.

Bottom line in plain English, it will work - if properly designed, installed, purged and FLUSHED!

SR

Thanks again SR.

I'll be sure to chat more about the equipment and depth in a couple of weeks when I meet with him.

I'm off to spring break now so won't be on this thread for a bit.

Truly appreciate everyone's input.

New learnings...
My house's load is really at 3.5 tons.. but apparently they do not make a dual stage 3.5 ton GeoThermal unit (they being WaterFurnace and ClimateMaster). So, the general consensus is to go with a 4 ton dual stage. My question today is in regards to COP and EER. My understanding was that the COP of the WaterFurnace was around 5.0 and ClimateMaster was 4.12 or so.. and the EERs were 30 and 27 respectively.

When I got the Geo calculation (heat load of around 68k and cooling around 36k), the COP and EER for the two WaterFurnace results showed the 3 ton at 3.92 COP and 18.74 EER and the 4 ton at 3.63 COP and 15.5 EER. That seems like a pretty big efficiency drop... do you experts see that as correct?

I do have a desire to go with GeoThermal, but the ROI is razor thin at best due to my low Natural Gas and Electric costs. The multiple quotes I've now received from dealers with WaterFurnace and ClimateMaster are in the range of $17k to $20k... though none of them are apples to apples comparisons.

Thanks for all the help everyone has provided.

So, what did you decide to do? I also live in Indianapolis area and I'm trying to assess the financial benefits of Geo vs conventional. Having a hard time seeing an ROI under 10 years.