To Geothermal From Propane

[fishpick]

We changed over this fall and installed a geothermal system to replace our propane forced air heat.
I know I have seen a bunch of posts about wood, corn, oil, coal, etc here - so here's the complete picture of what we did for geothermal. Usually people who share this don't share the cost, which is the most frightening aspect... at first.

I can tell you we LOVE the geothermal system. Our hotwater cost is offset by the "excess" heat from the geo compressor... we have a grill, stove and then the balance of hotwater off the propane tank and from Oct to yesterday our propane fill was only 90 gallons... and that INCLUDES the "shrink" you get in the tank with the much colder ground in Dec.

The heat is super even, the electric bills are FRACTIONAL over the old propane bills, it's just great. Only "complaint" is the blower itself is louder because these units move more air than conventional furnaces - but that's trivial, really.

The hardest part has been the ongoing installation - the people we went with were not very good so they have ben out over and over and over and over... small things - but things I should not have "found".

The best part was the cost (really) - basically the system cost $25K (4 ton unit + field loops + everything inside)... but before you freak out (like we initially did - look at the math).
In 2011 (don't know if it's still around in 2012) - there's a 30% fed tax credit, so that's $8K coming back. We are in NY so there were no state credits or rebates - but other states have them.
When we bought the system NYSERDA (NY's energy research people) had a GREAT loan program in place it just made sense.
Here's the math:
We took out a GE capital 0% for 12 month bridge loan to cover the $8K we know we are getting back in the form of the tax credit - no cost of the money and for 4 months we just have to make on time payments of $201... not a big deal. Taxes get field, credit gets applied, we pay off the GE bridge loan. Done there in another 2 months.

That left $17K to deal with. That's where the 2.9% NYSERDA loan came in - 10 year term... payments ended up at $177 / month. We are paying extra principal on each payment (so total payment is $225). There's a reason for that.
When we put all the numbers together in terms of propane costs - we knew we were paying about $225 / month for propane over the course of the each year - with propane at $2.29/gallon - and the math worked out that the geothermal unit, at that price, gets paid off in 7 years with payments at that amount. (the recent propane fill was an insane $2.94 / gallon)
Bottom line - we pay $225 a month for 7 years - which is the SAME as locking in the $2.29/gal propane price - which is unrealistic - and after 7 years it's only the cost of the electricity.
So far - the unit seems to add all of $50 / month to our electric bills.

I share all the numbers so people who are looking into this can see (at least in 2011) it's a doable endeavor in terms of "normal people finance".

Here's the summary of payments:
We had $3000 "in the bank" for our anual propane pre-buy... So here's how it gets used to kick off this project:
First 4 months of the bridge loan = $201/month (then tax return pays this off with Fed credit)
7 years - each month $225 / month (pays off unit + install in 7 years at a propane rate = 2.29/gallon)
Unit operating costs (about $50-$70/month)

 

[wjmst]

"(the recent propane fill was an insane $2.94 / gallon)"

Hahaha, that is funny. My recent fill up was...... $5.12/gal by the time all of the nonsensical fees are added in.

Sounds like you got a pretty good setup. Make sure to post an update this spring and let us know how it performed.

 

[ch47dpilot]

How big is your house? 1 or 2 story? Planning on building in the next few years in Alabama. most people run heat pumps here but in the winter when it gets a little colder (10-20F) they are no longer that efficient and then you need to use back-up heat, Basically a giant electric toaster heating your house. Since the ground is always 60-70 geothermal would be perfect for the south where natural gas isn't used that much.

 

[bucktaker]

What is your supplemental heat source? Geo is only efficent to a certain temerature then needs a supplemental source gas or electric? have you inputed supplemental heat costs into your formula?

 

[charlz]

So how did the geo integrate with your existing forced air furnace? Did you have to replace the whole thing, just the 'propane burner' part, or was it 'add-on' where you can still use propane if you need?

If I had known more about geothermal at the time I might have gone that way instead of a pellet stove. No doubt the pay off would have been longer (pellet stove paid for itself in 4.5 years versus propane) but in the long run it would eliminate the 'sweat equity' part of a pellet stove (hauling pellets, filling stove twice a day etc.)

 

[soulasphil]

I used to heat the house with electric radiators in each room. I didn't go geothermal because I didn't know enough about it and the regulation to preserve the environment is too complicated. This summer I installed a pellet burner with ample storage space and hot water heating with heaters in each room. No need to handle pellets, they are blown into the silo then taken to the burner by a worm conveyor. Lots of hot water for the bathrooms too. Very comfortable, almost silent and much smaller electric bills.

 

[fishpick]

@ch47dpilot - We bought a 9 year old 2800 sq ft (monster) 2 story colonial several years ago - on the cheap.
@bucktaker - we considered a double plenum and keeping the propane for backup... but after the full manual-J calculation the unit can satisfy the house heat loss all the way down to 12F... so the number of days we need suplemental heat is like 3 - total. So we opted for a 220V AUX element in the unit. Geo is differnt than an air based heat pump because it can alwasy "make heat" from the 42 degree eath 6-7 feet down... so it's always making heat - the equation figures out when can the 44K BTU's it makes NOT satisify the building based on heat loss. The 3 times this year AUX has been needed (the thermostat logs to the web) - it's run for about 5-10 minutes total each time... and the temp has been single diget with wind. So the reality is, that is rather negligible. We had to go through the full NYSERDA energy audit to get the loan - and the sizing against that audit is very scientific. The way geo works - I would NEVER consider installing a system without the full on Energy Star house audit. Very little expectation to run that AUX a lot - all the time.
@charlz - the old furnace is in the barn waiting for me to get rid of it... the geo unit looks like a furnace and sits right where the old falme unit was. Hooks into the existing cold air and plenum. There are installations where you can retain your old furnace for supplemental / backup heat if you want. We opted not to because it was just "messy".

We looked at several flavors of large outdoor boilers... wood gasifiers, pellets, corn, you name it. I came to the conclusion (with the help of my wife) that having to "feed" something all the time to keep us warm was not a wise decision in terms of the mariage longevity... so - geo fit there really well.

The other side of that is the lifespan of any combustion pot is 10 years max... geo is good for 25 or so before you need to worry about the compressor part. So, my numbers were about the same as yours - 5 years for a pellet system... and then replace in another 5 after payoff... geo just made more sense for us longer term.

 

[71bronco]

Quote-------We took out a GE capital 0% for 12 month bridge loan to cover the $8K we know we are getting back in the form of the tax credit - no cost of the money and for 4 months we just have to make on time payments of $201... not a big deal. Taxes get field, credit gets applied, we pay off the GE bridge loan. Done there in another 2 months.

I don't know what your tax situation is but we couldn't apply the credit all in one year. We had to break it up over 3 years.

Jeff

 

[bucktaker]

fishpick
I thought ...from others info that geo needed supplemental heat at approx the same level as a air to air ...more or less . mine switches to back up propane at 29 degrees or > 2 degrees diff in set point and temp.....hummm gotta keep that inspection in mind

 

[fishpick]

Quote-------We took out a GE capital 0% for 12 month bridge loan to cover the $8K we know we are getting back in the form of the tax credit - no cost of the money and for 4 months we just have to make on time payments of $201... not a big deal. Taxes get field, credit gets applied, we pay off the GE bridge loan. Done there in another 2 months.

I don't know what your tax situation is but we couldn't apply the credit all in one year. We had to break it up over 3 years.

Jeff

According to our accountant - it's all good in one year as long as you are paying the taxes to get the cash back on the credit itself. i.e. - we pay more than $8K in Fed taxes so we can apply the full $8K credit.
(that may be a change as part of the "green jobs" legislation)