The US Dept. of Energy has a useful calculator that tells you the cost of producing 1 million BTUs using a variety of heating types and fuel sources. User inputs electric, gas, oil, etc rates. It is at www.eia.doe.gov/neic/experts/heatcalc.xls. The calculator adjusts the rated HSPF of an air-source heat pump based on expected actual performance in the field. See their explanation below.
TECHNICAL NOTE: AIR-SOURCE HEAT PUMPS
The actual heating efficiency and seasonal performance of an air-source heat pump may vary significantly from the rating it receives
when tested under the standard procedures and conditions that manufacturers use to determine heat pump efficiency.
For a detailed discussion of this issue, see the article:
"Climate Impacts on Heating Seasonal Performance Factor (HSPF) and Seasonal Energy Efficiency Ratio (SEER) for Air Source Heat Pumps,"
Fairy, et al, ASHRAE Transactions, American Society of Heating, Refrigerating and Air Conditioning Engineers, Inc., Atlanta, GA, June 2004.
The method in the form of the regression equations presented in that paper is used in this "calculator" for calculating an adjusted HSPF
for air-source heat pumps. This method is assumed to provide a rough approximation of the actual HSPF that an air-source heat pump
will experience in different locations in the USA.
Not rocket science
I don't believe that is possible. Current geo systems are already at more than 50% of theoretical efficiency. Improvements will be made -- but not doubling today's efficiency.
Originally Posted by smcmurrey
I know that's not possible. First, it is much easier to transfer heat to/from a fluid (geo) than to/from air (AC or Air HP). More importantly, there is a lot more heat that can be extracted from the water in a geo system than from air. Thirdly, thermogodynamics states that it's a lot easier to extract heat from geo water at, say, 32 degrees than from outdoor air at 0 degrees. In summer, it's a lot easier to dump heat into geo water at, say, 70 degrees than into outdoor air at 95 degrees. The physics won't change no mater how much better compressors & fan motors get.
Originally Posted by smcmurrey
Finally, I want to reiterate what an earlier poster said. You cannot make a valid cost comparison without including the replacement & maintenance costs of BOTH types of equipment. If you load one side of the equation with the capital AND operating costs of geo, and on the other side only the operating costs of current equipment you're lying to yourself.
That old, existing equipment is going to need replacing. This is why accountants invented depreciation. If your old equipment is near end-of-life, include the full replacement cost and use the expected operating costs of new equipment.
If your existing equipment has, say, 5 years remaining life, add the full replacement costs minus the current depreciated value of the existing equipment. Also figure current operating costs for 5 years, followed by the expected new costs after that. (You will be installing more efficient equipment whether geo or not.)
This is not rocket science, folks. You learned how to add and subtract things from equations back in high school. You know not to compare apples to oranges. And everybody knows it's easier to cool your drink with ice than with cool water.
I have a Waterfurnace Evnision three+ ton unit with a horizontal loop of 3/4' pipe in three, 300' loops and about 50 feet of 2" header pipe to get to the "swamp" that is my back yard. I live in central VA and currently have a EWT of 35F. I could not be happier with my system. Compared to my coworkers, family ect, my peak utility bill is 1/3 of theirs. The biggest revelation I had with the system is how it moderates my electrical energy consumption. Yes I do have a desuperheater and my waterheater is currently OFF. As electrical rates have risen (4 to 10 cents/kWh) the payback period has decreased. My orgional ROI (return on investment) calculation was 10-12 years but I based that on the price difference between the system I currently have and the cost of a new 16+ seer 2 stage air source heat pump. I did not do a ROI for the HP/oil (40 year old furnace) as the furnace was done for and HAD to be replaced. Nor have ai recalculated my ROI.
Since the system was put in the electric rates in my area have increased over 27%, shaving a few more years off the ROI.
[rant] My system cost half as much as a Prius, will actually have an ROI unlike the prius, is not worse for the enviroment than what it replaces*, Will last far longer than a prius, and has far less cost of ownership than a prius, and will actually reduce my carbon footprint more than a prius. and when it reaches it end of its life longe after the prius has been sent to the scrap yard it will have more of its parts recycled than the prius.
* a recent study in Great Britton found out the a Prius is just as damaging to the envriroment as a Land Rover Discovery.
YOur geo unit will last far longer than an air source and there will be far less maintenance. I know that Waterfurnace test the refrigerant circuit in their packaged units with helium (hydrogen would be better but it can go boom). If they don't get a leak with He you probably won't ever have a refrigerant leak. Of course you may have to replace a loop pump or desuperheater pump but anyone who properly install one should install the proper service valves to make this a 5 minute job. Mine will be. In five or ten years the geos will be even more effecient. Remember you don't have defrost cycles with a geo. In that respects geos will ALWAYS be more effecient than a ASHP.
Its very hard to have an useful discussion regarding geo vs air sourced hp without a discussion of ROI. And its not possible to discuss ROI without talking $ which isn't allowed. However what I can say is that while there may be some places where geo pencils out there are plenty where it does not. Oregon for example.
Actual performance numbers for any system geo or air are very hard to come by and for good reason... they tend to be lower than they would like you to believe. That isn't to slam anybody but marketing is, well marketing, and if one vendor says their COP is 3.5 but isn't talking whole system it puts another vendor who wants to be more, uh, informative, in a corner.
So, for what it is worth here are some things to consider. If you are thinking about geo make sure you fully understand what you can expect the performance of your system to be. Undersized loops can dramatically reduce the efficiency of your system. If a vendor won't commit to a whole system efficiency you should wonder why. I'd certainly expect any geo system to give a COP or at least 3, preferably higher, with all losses fully figured in. Assuming a COP of say, 3.5, electricity at 10 cents/kw, gas at $1.50 and a 90% furnance you'd be paying $1.66/therm if you burned gas vs 84 cents for geo. So if everything works correctly your bill should run about half with geo vs gas. If anyone is doing better than this then either the spread between electricity and gas is larger than my example or the COP is higher.
You can do your own math from here. If your bill is $600/mo and you already have a high efficiency furnace you'll save $300/mo. Now just figure out how long it take to pay back.
Next up I'll try and compare geo vs air sourced.
My heating bill is about 1/4 of that. Resistance heat, and that was during the coldest month, which was last month. I had one customer insist upon a geo, and his house was no bigger than mine. He'd been reading up on them "on the internet" and simply decided that's what he wanted. I explained he'll be long gone from this earth before he sees a benifit (an older gentleman with an air source heat pump that just needed a new compressor). One thing geo has in its favor, some very good salesmen. We do not install them, never will. There simply is no ROI in this region (mid south). The geo guys will beg to differ, but I've yet to see a convincing plea. BTW, was your argument for or against? I really couldn't tell.
Originally Posted by sbe
I take that as a compliment because its not possible to make such a thing except for any given set of conditions. Take the example above where the savings is $300 a month, is that a good deal or bad? Well, obviously that depends on the incremental cost of the geo for one thing, but it also depends on something else, interest rates. If the homeowner paying 7% to borrow the money for the additional cost of the system that is going to add more cost that if he is borrowing at 4.5%. Taxes also figure in. Here in Oregon you can install a solar collector on your roof and the state will pay 90% of the cost. Its terrible policy, but the economics might work for the homeowner if he is only paying 10% of the cost (just imagine how many people would be buying Prius's if the government was subsidizing them like that).
Originally Posted by hvacrmedic
I prefer to let the numbers speak for themselves. Every structure has a certain need for energy, every situation has a cost of electricity, gas, propane or other fuel. Since 90% furnaces are so cheap these days I take that as my default and compare to geo or air sourced and see what the payback is.
However since you asked here is what I have found. Where electricity is cheap and piped gas is available in general an air sourced heat pump wins unless the climate is extreme (by which I mean cold). If the only option is propane or fuel oil an air source heat pump always wins, again unless the climate is extreme.
Where electricity is less cheap (more than 15 cents) it becomes difficult the advantages of an air source heat pump start to fade in heating dominated climates, even mild ones.
The only places I have seen geo as a slam dunk based on a reasonable ROI are where you have an open loop system, easy access to a pond or swamp or a large spread between the cost of electricity and a fossil fuel AND the weather is extreme (think New England with no access to gas and low to moderate electricity rates).
The problem with these generalization that they are just that, generalizations. Given how trivial it is to run a calculation for a project I can't see why rather than arguing one can't just talk fact. If when discussing which way to go one simply said "well I'm going to save $xxx/month and the difference in cost is $yyy so my payback period is zzz months" that is something concrete we could talk about and make useful comments (like confirming if the savings sounds right for the size and load of the structure).
So I apologize for the long answer but this has been a frustration of mine. It's easy to argue back and forth getting no where unless one is looking at facts, in this case savings and cost of system. If we could at least talk about the approximate cost of a geo system generating AAA tons vs the alternative (air source heat pumps or furnaces) I think it would be very useful in that people need to know how to trade off fixed upfront costs against operating costs. Since that isn't considered appropriate for this site I encourage people to run the numbers themselves paying extremely close attention to the assumptions and promises the vendor is making regarding system performance.
With that information in hand it is then pretty straight forward to make the right decision.
Even with the 30% tax credit you don't see a payback from a geothermal system with EER's approaching 30?
I think it depends largely on how large the power bill is. The larger it is the easier it is to justify. You can't do much for someone with a $200 power bill but you can save the guy with the $900 power bill a lot.
Also keep in mind residential users pay their power bills with "after tax" dollars. Your company's power bill is a deductible expense so Uncle Sam shares the cost - whatever your tax rate is - but a home owner's is not. To pay a $500 power bill he may need to make $750 to have the $500 left to pay for power. ($1000 if Obama has his way.)
If he can cut that power bill 40% the $200 he saves is really $300 he would have had to earn. (Or nearly $400 if we return to Clinton era tax rates.)
And interest on the installation is a tax deduction if a second mortgage pays for it. That lowers the effective interest rate. If he pays 6% it is effectively 4% after taxes.
It's a double whammy. You save after tax dollars - 30% of the system cost up-front and every dollar you save monthly thereafter - but get to pay for it with deductible interest.
I just ran the numbers on a $40,000 installation (10 tons) that will save $400 per month and that's a 10 year payback at 6% "before" any tax credit. The homeowner will get $12,000 reduced taxes so he effectively pays $28,000. If you finance $28,000 for 7.25 years the payment is $400/month at 6% - the savings on the power bill - but the homeowner will get to deduct the interest so even in those first 7 years he will see positive cash flow from that interest deduction. The HVAC portion of a GEO system should last 20 years so it may be break even in the first 7 but the remaining 13 he's saving $400/month. That $62,400! And the loop cost was $20,000 and should last 50 years+ so replacing the mechanical equipment 20 years down the road gives you effectively a new GEO system without the expense of drilling the loops so the next 20 years looks even better!
When you add the certain increases in electric and fuel costs GEO is definitely justifiable for large homes with high power consumption but as I say you won't be able to do much for the small home with a $200 power bill.
Loop costs are admittedly very high - about $2000 to $3000 per ton - but an EER of 30 definitely will save a lot.
I keep looking for a geothermal mini-split or VRF system. They have commercial water cooled VRF systems but so far I haven't seen a single phase version suitable for homes. Imagine if they can achieve a SEER of 26 using an air cooled condenser what they could do with 65 degree water!
But you have to be careful which geo system you compare. Incredibly some have fairly low EER's - like 16 or 17. I'm talking about the ones in the 25 to 30 EER range in my numbers above.
Geo vs 23 SEER IQ drive. The difference between initial investment and payback of that difference? Plus, with the IQ there is the comfort factor.
Your analysis for the cost of funds, pre vs post tax etc is all sound unfortunately that is the easy part to figure. But you've assumed is a $400/mo savings and that isn't at all clear.
Remember I'm comparing geo with air sourced heat pump. And your analysis can't be generalized for anywhere (in my case it's Portland, OR) but is good only for where the installation going to be. For us in the NW our mild winters it just isn't clear at least without a detailed how efficiently each system will perform. I'm sure someone can sit down and do it but it is not a simple thing when you really get into the process.
Luckily there is a reasonable shortcut. You find installers and manufacturers who will disclose the COP for real systems that have been properly instrumented. The European companies more open to providing this information than domestic suppliers, I suspect because with their much higher cost of energy they don't have to puff the numbers to make them compelling. The answer I get is around 3.3 and that is on the best case side of the range (meaning the field has been generously sized so it isn't heavily loaded under worst case conditions).
Perhaps that number is low, so try plugging in any number you want and then compare it with the full system COP for the air sourced alternative (again in Portland). I couldn't find the saving to justify the capital cost to suck the heat out of the ground instead of out of the air.
But I'm happy to be proved wrong, but so far no geo person has run any numbers that do so. Mostly they compare their systems to resistance heating (and ignore gas heat) because otherwise the numbers don't pencil out. Hey, that's Ok, its called marketing, but I'm an engineer and I like to deal with the problem at hand which is to compare the cost of heating with gas, air sourced heat pump and geo heat pump as against the capital cost of each.
Originally Posted by 4l530
The cost of the loops system is the big kicker, and is hugely variable.
The best candidates for geo systems are new construction, people with large properties, and people that live on lakes.
For most of us that live in suburban areas, the cost of drilling, even if the property is accessible enough for it, makes geo systems prohibitively expensive.
If more government is the answer, then it's a really stupid question.
I had the same experience. Even with the 30% tax credit on the ENTIRE geo install versus the $1500 max on the high end DFHP, I came up with a geo cost almost 3 times the DFHP with a generous manufacturer rebate. You have to look at you energy life style. On our larger home,our entire energy bill has been running about $15-1600/year. Guessing that maybe $1000 is for heat/AC/hot water, it takes a very long time to get a payback. Maybe on a new house with an expected long occupancy, the geo could work. You have to do your own numbers. Make sure you include all of the local/state/utility credits in your area.
Originally Posted by traverse
I was very gung ho for geo. The numbers didn't work for me.
Gosh, VK. I sure would like to see those numbers in more detail. I could be wrong but I am having a hard time seeing how a 5 ton+ geo can be operated in the dead of winter for $200 when you used to burn through 1000 of propane on a 93% efficient furnace previously. Seems like magic to be able to go from $2400/yr to $300/yr. I would enjoy seeing how one does that trick.
Originally Posted by JVK
Also, $2400-$300 = $2100 savings/yr. If you could get that kind of savings/yr, the payback might be possible in 8 years. Just having a problem seeing that kind of percentage drop in costs.
The Waterfurnace dealer I knew told me that if natural gas is available in a particular area, they will not even consider to target that location.