Wednesday, August 13, 2008

Our savings with a Geothermal Heat Pump

Two years ago, our A/C and furnace were getting decrepit (15 - 17 years old) and needed to be replaced. Then we had two gas leaks from our furnace, and we had to go without heat for a few days. As we were evaluating our options for replacing the furnace, we found the Geothermal Heat Pump technology.

Geothermal Heat Pumps provide heating, cooling, and free hot water when they are running. The Geo technology uses much less energy overall than other types of HVAC systems, because it transfers the constant temperature from the earth into your house via closed-loop pipes drilled deep into the earth. According to some experts, Geo systems also last longer.
So, mostly due to environmental reasons, we decided to install a Geothermal Heat Pump. We chose a Climate Master unit, which sits in the garage, connected to a blower in our former furnace closet. The pipes had to be installed in our front yard, which was totally devastated from the digging and drilling.
Our installers were supposed to use a Ditch Witch to dig the trench for the connecting pipe, which was only 6 feet down, and connects the well pipes, which are drilled down about 200 feet. Nope! Surprise, a gigantic earthmover showed up to dig the connecting trench. And the driller was quite a sight to see - I wish I had a picture. It looked a lot like an oil rig on our front lawn for a day or two. We were quite the talk of the neighborhood.

Along the way, we had to upgrade our electric system for an additional $1300. Basically they replaced the main panel. Personally I think we got hosed on this one.

Once the pipes were installed in the wells, the installers ran them up the side of our house and into the attic, then finally down to the Climate Master unit in the garage. They also connected the unit to our hot water heater. "Waste" heat, leftover from the HVAC process, produces free hot water.

Geo pipes connecting to Geo unit

How does it work? Well, it keeps the house at 68 degrees F easily during the winter (with a minimum temperature of 0 - 10 degrees outside, but usually more like 30 - 40 degrees). During the summer, it has trouble keeping the house at 78 degrees when outside temperatures run above 100 degrees. The first summer we had a lot of trouble keeping the house cool until we installed some more insulation, and our original installer came in for a check up and discovered - oops - some of the settings were improperly set, which was causing our unit to run inefficiently. So, I'm not sure why it still doesn't keep the house as cool as we'd like during the summer... maybe it's just not sized right.

What did it cost?
  • Geothemal unit and installation + backup electric heater - $9500
  • Upgrade of electric system - $1300
  • Replacement and leveling of lawn that was destroyed - $700
  • Tax credit in 2006 - (-$300)

  • Total cost: $11,200
According to some estimates, the cost of comparable energy efficient furnace and A/C units would have run about $4 - 5000. Now, keep in mind that many people would not have to incur the costs of the electric upgrade or the landscaping replacement - especially if building a new home. Then again, according to the estimates I got, $9500 was pretty cheap for an installation of a Geo system.

We also invested $250 on an Energy Audit and $565 on cellulose insulation blown into our attic. So our total investment was $11,200 + 250 + 565 - $5000 (for comparable systems) = $7015.

I just ran the analysis today to see whether the investment was worth it. I looked at our natural gas and electric bills from before the switch and compared them to the electric bill after the switch. Here's what I found:
  • The Geothermal system saves a good amount of money on heating, at an average of $50 - 60 per month during the heating months. I have to note here that we are also keeping the house at a constant 68 degrees now during the winter (due to our small child and my home office); before we installed the unit we were running our furnace at 64 degrees during the day and 60 at night. So this is not a true apples to apples comparison.

  • The Geothermal system seems to cost about the same to run as our old A/C unit did during cooling months.

  • On a first year to year comparison, we saved $400 (32%) and 8511 kwh (46%). Note: I had to convert Dekatherms to kWh to make the comparison. For some reason saving 46% of kWh did not translate into 46% of actual dollar savings - I think this is because prices went up between 2005 and 2007.

  • The Geo system brought us to a total home energy usage of 9901 kWh, with no therms at all. This reduces our impact to 75% less than the average American's use of 11,000 kWh + 1000 therms = 40,300 kWh converted. Very satisfying!

So what do I think?

  • At this rate, it will take us 15 years to make our money back.
  • If prices increase rapidly (possible scenario), it will take much less time - maybe 6 to 8 years .
  • There are cheaper ways to use less energy, but this way we keep about the same amount of comfort, and I can continue to use my home office, while still reducing our carbon impact (from home energy use) about 46%.
  • The Geo system does seem worth it, assuming energy prices continue to rise.
  • If you have tight budget constraints, I would recommend spending the money on insulation and weatherizing first, and investigate solar heating as an option.
  • Talk to people in your climate to see if it is worth getting a Geothermal Heat Pump system in your weather conditions!!

Update 2009: I believe that the current federal tax credit is much improved over the credit we received when we installed our system - it is now $2000 instead of the measly $300 we got :).


Matriarchy said...

Thanks very much for the detailed analysis. We are looking at things like this right now. I would not have thought of the electric service upgrade and landscaping expenses. We upgraded a panel at another house, and it cost $1200. The house we are in now has *fuses*, so we really need to get pricing on that.

New Mama said...

I've been interested in this concept since I first read about it, years ago. But we live in an area with very small yards and neighbors close to each other -- do you need a big yard to do this?

I also wonder if my wealthier village (not that *we're* wealthy by any means, but it's a "nice" suburb) would allow it.

I followed you over from Sharon's blog, BTW, and I'm enjoying your posts.

Hausfrau said...

Hi new mama!
The wells that the pipes go down have to be about 20 feet apart, I believe. We needed 3 wells for a 3 ton system. If you have a pond I think they could use that as an alternative. Have a contractor come out; they will search your yard for a good spot.

And, once the system is in, there's no reason for an upper-class suburb to care - it's almost invisible once the landscaping is replaced. It's just messy during the time the ground is torn up. But, you would have to get a permit of course (we did).

Lewru said...

Did you hear the Science Friday bit on geothermal systems today on NPR? A caller said his was inefficient in terms his bill but that it was 15 years old, too. It was an interesting segment.

Anonymous said...

Thank you for this! I have been having a hard time finding even ballpark estimates for what this type of system costs, and how well it works.

Hausfrau said...

Lewru - My geothermal maintenance guy told me that even microleaks in the pipes can cause major inefficiencies, so it's important to get them maintained every year (just like any HVAC system).

I admit sometimes I wonder if the savings have come mostly from the insulation, since we got it at the same time it's hard to tell... but I have a hard time believing we could save 46% kWh from just attic insulation.

Hausfrau said...

Hi eatclosetohome -
The cost really varies a lot by contractor. So get three different estimates, at least. And I checked your blog - do you even have any more energy to decrease ???? ;)

Anonymous said...

hello.. I really love this eco-friendly concept. However, I also read some article with Radon vs Geothermal. Will Geothermal increase Radon concentration in your house?

Hausfrau said...

Hi Anon - I never ran across any references to radon in any of my geothermal research. One of the sources I found was the Energy Star program, which gave Geo high rankings, so I felt pretty secure about it. Could you post a reference?

Anonymous said...

hello.. I will love to share with you. But majority articles I read are related to "Geothermal Energy" vs. "Radon". There is one related article from Australia - "Radon in caves and geothermal sources". I also ran across about "Geothermal plant opposition" subject. You could run the Google search on this subject. However, no one has any direct research on my concern. When I ran across my research, I found your blog. You have detail information about the cost. Therefore, I just want to check whether someone in the blogs has done related to research on this subject. I raised this question to Geothermal Consortium and Trane. However, I never heard anything back. Please keep your post, if you find something.

Mikes said...

The heat continuously flowing from the earth's interior is estimated to be the equivalent of 42 million megawatts of power (which is equivalent to the electricity that would be used by more than 30 billion homes).

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Geo thermal Heat Pumps said...

For Geothermal Heat Pumps there is no outside unit, and this means they can’t be vandalized nor will they create a loud noise while running.

Johnny said...

Great information, thank you for sharing!!!

We are putting some useful information regarding to Geothermal Heat Pumps and some other free resources, including a free saving calculator.

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Rick said...

I had a 5 ton vertical ground loop geothermal heat pump system installed during construction of my 3300 sq ft home with 6" walls 4 years ago. When it works, I love it, but I have had thermistor failures (this causes the compressor to shut down) almost every summer and once last winter. Usually this occurs during extreme heat or extreme cold periods. I now have just replaced one of the two thermal fluid pumps, again during extreme heat. Needless to say, I am frustrated with the reliability.

Alexander said...

Good post, very interesting.