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GeoThermal payback

17 years ago

Hey guys! I'm building a home in the Shenandoah and my builder is in the midst of receiving bids for HVAC. Let me say up front, I apparently fall in the swath of high northern VA prices so prepare for sticker shock.

First, I really love the idea of a geothermal system and am willing to accept a longer payback period for being green (plus I plan to be in the house 40-50 years). BUT - I don't want to get carried away with costs.

First bid came back at $21K for high-efficiency heat pumps and $80K - $100K for geothermal. I'm assuming he REALLY doesn't want to install geothermal. Second bid came back as $27K for heat pumps and $42K for geothermal. We'll get the actual documents on Monday so can't compare the specs of the two yet. I'm not sure what happened to the other requests for bids.

We only asked for bids from companies that do both, so if we decide to go for heat pumps we could go out for more bids and perhaps get lower ones.

This is for a two-story plus basement totaling about 5000 sq ft.

I'm looking for some perspective here. Say the choice is a $21K high efficient heat pump system vs. a $42K geothermal system. How do the long term costs compare? It just seems to me that $20K will be hard to make up.

Thanks for any advice!

Comments (15)

  • 17 years ago

    wow.... expensive..... around here in wisconsin that would be abot 25k for a house that size

  • 17 years ago

    Although many replies to your questions will be helpful in getting a broad perspective, you really need to find out from neighbors whether they are satisfied with the installations of their geotherm. If the installation is done wrong, it could be a big disappointment. But a good installation could reduce heating/cooling costs by as much as 3/4 even in really cold places like Canada, judging from comments on these forums.

    The big discrepancy in prices you got so far could be due to different types of installations or different assessments of the kind of soil conditions on your lot and how that might affect ease of installation. It would be great if you could find a consultant to give you an impartial opinion, somebody who does not sell geotherm and has no vested interest.

  • 17 years ago

    Thank you for your helpful replies. Alas, I've decided it's a bridge too far and am going with the h-e heat pump.

  • 17 years ago

    The additional cost for geothermal is a direct result of what goes on the outside of the house. For me that was about a $10,000, which was the cost to have a well company drill the two bore holes and the HVAC guy to install the verticle closed loop. The cost to install the system inside the house is comparable to conventional system. My install was on new contruction in CT. It sounds like you have a contractor that is not familiar with geothermal installs.

    I recommend you ask the guys in the HVAC section of this site for a competent installer or contact a heatpump manufacturer, like Water Furnace, and ask for a certified local installer. Don't give up becuase you can save a lot of money if you plan to stay put for that many years. My payback was only 4 1/2 years. Good luck!

  • 17 years ago

    I 2nd razl's post.

    SR

  • 17 years ago

    I live in Northern VA and have a 12 ton GT system (3 HVAC units: 1 x 6 ton and 2 x 3 ton). The HVAC bids we received in 2007 had a base quote with HE heat pumps and then an option with a delta cost to upgrade to GT. The delta cost was around $15K - but this also included some zoning on the second floor and that was probably around $2K - so maybe $13K extra for the GT. This delta cost did not include the outside work for excavating the pit (it is a horizontal closed loop system) but it did include the HVAC company costs to install the ground loop outside the house, plumb the inside, and 2 loop pumps.

    I used Southern Air Temp out of Berryville, VA. They have been doing GT systems for a long time (over 20 years). There is naother company based out of Warrenton, VA that does GT too but I have no experience with them - just heard through a friend they are good. In our area these are the only 2 companies that have a long experience with GT - which is what you want. That 80 to 100K bid sounds way too high.

  • 17 years ago

    Razl,
    If you don't mind me asking who did you use in CT. I am doing new construction and awating quotes from two different Geothermal installers.

  • 17 years ago

    Razl,
    I'm doing a gut job in NYC and would love to do GT. But I can't seem to find anyone around here with good info. So if you don't mind-How deep did you drill and what size units do you have? Did you get hot water also? What kind of backup heat?
    Thanks.

  • 17 years ago

    Hi,
    This is just my 2 cents, and I have to say up front I'm not the biggest fan of geothermal heat pumps. But, I would look at spending some of that extra $21K+ on things like more insulation, better sealing, efficient lighting and appliances, energy efficient windows for your climate -- and so on. Using this kind of approach, we cut our heating bill in half (we are in a heating dominated climate) at a very low cost -- a small, small fraction of $21K.
    Just a thought.

    Gary

  • 17 years ago

    The good insulation, selaing, windows and doors are just smart building practices that should be done regradless of the HVAC system. But for GT, they are prerequsities.

    The incredible energy efficiency of geothermal heat pumps is undeniable - it's just simple physics. For every BTU used to run the GT heat pump, you extract 3 to 4 BTU's from the Earth - hard to beat. The problem is finding an experienced installer who can design the system properly, install it properly, and then provide service. And even if you do find someone, getting a fair price is also a big hurdle.

    I don't think I would go with a GT system if I could not get timely and quality service - you have to think about the long term support of the system. Mine normally works like the energizer bunny but when it breaks (and yours will too and at the worst possible time) you will want that fixed quickly and you can't just bring in any old HVAC company to work on it.

    For my GT system, I will reach the break even point at 7 years. It should have been 5 years had I not run into gigantic boulders when digging my pit but that is the way it goes sometimes. The good news - and the main reason I did GT - is that my heating and cooling bills are reasonable and predictable. I condition just under 10,000 square feet of house. This past month (very cold Novemeber in the Mid-Atlantic) my total electric bill was 317 dollars - 85 dollars of which is for lights, gadgets, and other daily usage. We pay 9 cents per kWh in the winter, 11 in the summer (those are loaded numbers with all fees and taxes added).

    So the savings with GT can be wonderful, but I would not be lured into that if you cannot get the support you will need or if the price is just too high.

  • 17 years ago

    Hi Sniffdog,

    My reservations about the geothermal heat pump come from looking at the overall process. The heat pump itself if very efficient -- maybe 300+%, but, for most people, the electricity comes from a coal fired electric plant that is only 30% efficient -- so when you look at the whole thing, you are really no more efficient on the heating side than if you put in a 95% efficient condensing boiler or furnace, which would also generate less CO2 as well.

    As one engineer friend of mine says: "You burn 4 BTU of coal to make 1 BTu of electricity, and then use a heat pump to convert that 1 BTU of electric energy back into 3 or 4 BTU of heat -- you might just as well burn the coal right in your house."

    Judging from the emails I get, there are also a lot of people who's geothermal heat pump systems have problems -- so, as you say, finding a really good professional is key.

    While I agree that insulation etc. are "..just smart building practices that should be done regardless of the HVAC system. But for GT, they are prerequisites." its not the way a lot of people go about it. A lot of people go the heat pump route, and don't do the rest -- I'd just like to encourage people to look at a range of things, and actually compare the payback for each.n measures.

    Gary

  • 17 years ago

    The subdivision I live in is all electric with no gas and propane tanks are not allowed on the lots. I like the feeling of gas heat but don't like the price swings propane comes with. For many out in the country who don't want to deal with a propane tank geothermal would be a good answer.

    Geothermal in the southern states is incredible when it is 120 in the shade and the ground temp is 65 degrees.. it can idle along while a conventional a/c is running at peak load straining to keep up. 75 degree house 65 degree heat sink compared to a 75 degree house 120 degree heat sink.

    Geothermal in the northern states is awesome when its 10 degrees outside and 70 in the house with say a 55 degree heat sink.. compared to a 10 degree heat sink.

    Geothermal in the mixed climates is the best of both worlds! hot humid summers and pretty fridgid winters with a fairly steady heat sink still.

    Natural gas 90+eff furnace in the north... very much worth it for the money spent. Natural gas down south with a 90+ eff would not pay back near as fast over a lower efficiency model.

    There is absolutely nothing wrong with high eff gas of any sort but I am pretty convinced that where you have a high cooling load the best 'GREEN' bang for the buck along with a heating load is Geothermal.

    GEOTHERMAL- So what if it only breaks even on the coal BTU's to heat where I live. When the seasons change that geothermal will run circles around the conventional heat pump or A/C. What is a 95% eff furnace doing when its 100 outside?

    It all depends on where you want to look at it from. If I lived in north dakota and didn't need a/c or the added cost of geothermal.. It would be harder to justify the cost of geo over a high eff gas unit.

    I have heard some say solar and wind isn't green because all of the emissions produced to make the panels and turbines etc. Valid point indeed but come on put the crack pipe down.

    There are multiple technologies out and people need to seek them out as to which ones are more beneficial to them and the area they live.

    The whole green thing is like looking at a dozen frogs in a bucket and picking the greenest one and then taking them outside and dumping them out on the sidewalk in the sunshine.. all of a sudden there is a greener looking frog than that other one you picked but they are all still green frogs, as long as its green pick one that you like.

  • 17 years ago

    When I looked at geothermal and decided to go for it, the decision had nothing to do with being green. I just looked at bottom line costs to me over a long term - like 20 years - which is how long I will be in my new house. It just made financial sense for me but as countryboy stated, it may not for others depending on where you live and many other factors.

    I agree that the first dollars one should spend when it comes to the thermal design of the house is insulaiton, ventilation, sealing, windows, doors. There is no question in my mind that is the biggest bang for the buck.

    I love my Geothermal system but I recognized after we had been in the house for about a month (when the heat crapped out) that there are long term risks that one has to consider that are far beyond getting the thing installed and working properly.

    There is only one company in my area that can honnestly claim they do GT - they have over 20 years of experience in GT systems and did a great job for me. They came out and fixed my problem which turned out to be related to the flow rate not being adjusted correctly for all 3 of my heat pumps. However, with the financial crisis going on and the decline in the housing market, I started to think about what would have happened if my HVAC guys went belly up. Who would I call to work on the system and repair it? I think this is a risk that needs to be factored into the purchasing decision. You will always be able to find good HVAC companies that can work on the standard types of systems. We aren't there yet - at least not in my area - with GT.

    The OP has stated that they are having a hard time finding a GT company. If you can't find anyone local who not only says they can do it, but can show they have successfuly installed GT systems over many years and can get your references, I would look for other solutions and put more money into the thermal package.

    I looked at the cost of spray foam with HE LP and electric A/C - and it was about the same cost as my GT system with a cellulose insulation package. I think that would be a good alternative for the OP to look at if they cannot get GT.

    I also think that doors are often overlooked and they have always been a big source of air infiltration in houses I have lived in or rented. I recommend getting really good doors that will not warp, have 3 point locks and tight seals all the way around the face of the door. Get the best windows you can afford - double pain with low e-glass & argon gas. The delta cost for these features are well worth the money.

  • 17 years ago

    Either being green or eventually being able to leave some of the green in your wallet.. I think both are pretty good incentives regardless if your the piggy that lives in the straw house or the piggy that lives in the brick house it will keep the wolf from eating your wallet.

  • 17 years ago

    razl - where are you in CT and who did you use? We spent $9000 on 2 279ft wells with vertical loops (in addition to our water well which had to be hydrofractured - that was a lot more). Our GSHP (inside equipment and labor for new construction, incl running ductwork in chase with 1 side left unsheetrocked) was just under $25,000, with another $2550 for second zone and humidifier so $36,000 total plus whatever the electrician charged for running power to it (not broken out separately). My dad trenched for the lines so no charge there.

    As far as OP's question on payback, your numbers seem way out of line (100K? I thought you could build a house for that in West VA! Probably could in West TX). That $25,000 in CT (*not* a low cost state!) included 4 ton 2 stage Tranquility 27 and 2 80-gal stone lined HW tanks as well as all ductwork. But we were considering oil-fired "hydroAir" boiler since we had chase for ductwork and lots of ledge, that plus central AC would have been $30,000. Thank goodness the wells weren't that much (and were useful in trying to find water - the 2nd well we drilled ended up being for water, 1st and 3rd for geo) and my dad did the trenching (1 trench for lines from all 3 wells). Last year when oil prices were so high we probably made up $3000 of the $6000 difference. Oh, and got a $2000 rebate from the state for geo. So it's pretty much paid for itself already. With the extra tax credits this year for geo that are higher than for high AFUE furnace (not the case in 2007) I'd say your payback would be sooner, even with oil prices down, if you can get a reasonable estimate. $42K may be reasonable, $100K isn't.

    sniffdog - you heat 10,000 sf for less than $250?? Of course your electric rates are lower than ours - we pay 18.16 cents/kWh though I did see some kind of "refund" of 2 cents/kWh there last month so lowered it to 16 cents. How many kWh/mo do you use? Jan 19 - Feb 18 my actual reading was 2299 kWh. Non-heating season is usually about half that. But your house is nearly 4 times the size!

    I was thinking of having electric company do an audit on our house, maybe with infrared camera or blower. It's a modular so we really have no idea of air infiltration (esp. b/t the upper and lower floors) even though the doors seal tight, Andersen 400 windows, max insulation they sold (R-22 in 2x6 walls).

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