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DavidYon
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| 10/15/2008 9:45 AM |
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I'm getting more hard numbers in, and am stumped on how to manage the escalating costs.
The first guy had me at a 6 ton Climate Master for $27K.
The 2nd guy gave me a quote of $26K for 6 ton Hydron Module, or $24K for 5 ton. Both include replacing main ducts and splitting into two zones.
The drillers gave me a sight-unseen quote of $17K for a 660-foot geo well, including casing, piping, pump, etc. That was for 6 ton, but since the drilling itself is only $11/foot, a 5 ton well is probably $15K at least.
The sight-unseen quote for electrical is $4-5K. This includes replacing the meter box with a dual-socket box for the HeatSmart rate, plus running a new main line from the socket to a separate 150A panel. I might be able to get that down with a more precise on-site quote or maybe having him agree to me doing some of the grunt work (stringing cable, etc) to reduce the labor.
For HeatSmart I need a backup heat source, most likely an electric masonry thermal storage heater. I don't know what those run, I'd probably be lucky to get away with $1K installed.
So 6 ton is looking like almost $50K (26+17+5+1), 5 ton is around $45K.
Yikes.
Then there's the seal-the-attic project, which is probably in the $3-5K range.
So here's where I'm at. $30K was my sticker shock last year. After running more detailed numbers this year, low $30K's was justifiable on ROI since I'm guessing that's about a 6-7 year payback. As you approach the $40K mark, payback starts stretching out to 8-9 years at least. At that point I start to have to get creative with value (residual value if we sell within 10 years, increased comfort/performance of the geo system over our current setup, etc), but can sort-of get there.
But $50K? Ouch.
Thoughts?
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senecarr
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| 10/15/2008 1:23 PM |
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| The drilling is quoted separate from the installation? |
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DavidYon
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| 10/15/2008 2:14 PM |
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Posted By senecarr on 10/15/2008 1:23 PM
The drilling is quoted separate from the installation?
There was a pretty detailed breakdown from the drilling outfit. Price for 660 feet based on $11/ft, plus cost of backhoe, drywell (for bleed output), pumping system, piped, etc. All of that was broken out in detail. And yes, this quote is separate from the inside work for the geo system (ducting, heat pump install, etc), which is separate from the quote I'll get for the electrical.
Spoke with a rep from the drilling outfit and he agreed that I'd save about $2K by falling back to 5 ton.
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joe.ami
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| 10/15/2008 11:16 PM |
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The duct work is a significant part of the job. So that expense doesn't really count if you would eventually put in AC without the geo. Also without AC but with an old fuel oil boiler there's a double whammy on home value.
So take the 5 ton if the heat load indicates it's okay; more auxiliary coil = less drilling, less duct work, less expensive heat pump.
Take the 10K you would have spent on AC (if you would have) throw in 2K for a tax credit and suddenly we're in the low thirties. Now if we figure that your house is worth more for having AC and worth even more for not burning oil (I think you were on oil) and your payback is in a few years.
Don't recall what the seal the attic project is, but try not to assign the cost of every home improvement to the geo. Also, can't you use existing system for back-up? Yes you could purchase something else, but that would be elective not required (and fuel oil purchased only in August due to infrequent use would be less expensive).
An unfortunate habit of all of us when we're shopping, is to check every box on our wish list and then sticker shock ourselves.
Every 200 or so thousand miles when I treat myself to a new work truck I get what I need and only some of what I want. I do however add features later, and you could too.
Good luck,
Joe |
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DavidYon
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| 10/16/2008 7:43 AM |
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Joe, thanks for the encouragement, but unfortunately your justifications aren't all that applicable:
- Already have AC, so that's not a new line item on the real estate listing (my personal litmus test for added home value)
- While I'd like to think that a state-of-the-art HVAC system will noticeably contribute to the value of the home, I really have to wonder. At the end of the day, the heating system is not the top-line in choosing a home. Sure, if all else is equal, someone will be swayed by energy efficiency, but personally I've never been in a situation where the decision points between two houses were so close.
- Ironically, the fix-the-attic project potentially hurts the payback time for geo. It's true I'm going to do that anyway, so it's probably not correct to put that cost in the "install the geo" category. By the same token I have to compute payback on the geo based on the improved energy efficiency of the new insulation. If it's true that every BTU from Geo costs roughly 1/3 the BTU of fossil, then the lower the BTU load the longer the payback.
Unclear that keeping the existing system for backup is worth the additional installation costs and resulting system complexity.
At the end of the day, $50K buys me the following:
- Dual-zoning
- A 10 year energy-efficiency payback, depending on where you think the spread between fossil and electricity is going to go in ten years
- A more comfortable HVAC system (going on faith anyway)
- A really cool HVAC technology
At this point I'm still in the game mostly because I find geo technology somewhat fascinating, and like the "almost getting something for nothing" trick that it pulls off. But after all the research I've done, the staggering up-front expenses, the complex and disruptive install process, I can't imagine that your average home owner would even get this far.
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senecarr
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| 10/16/2008 9:49 AM |
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If you're planning on reducing the energy requirement, then calculate the attic as done and see if it lowers your needed tonnage, and therefore your install. I've considered the same thing as I'm doing home improvements (lots to do at my new house, last occupants spent way too much time and money on horses, I think). I know paying more for new windows won't ever recoup much of their cost. I know paying for storm doors won't recoup. Finishing the attic and / or basement with SIPs? Won't pay back. It does, however, free you to make improvements for the pure ascetic or comfort you enjoy from the improvement.
I'll admit, your costs look staggering to me. In my neck of the woods, it's basically a flat $1k for the line to come in. |
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Alex_in_FL
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| 10/17/2008 11:49 PM |
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Wow! You are talking big $$ there. My thoughts are:
- Could you possibly install two separate 3 ton units instead of one large unit (vice making zones?) This will likely be more comfortable and more energy efficient.
- You need to tell them to give you a load calc. For $50K they should be giving you one for sure. Even if you have to pay them $100 it is worth it.
- Keep in mind, a 6 ton unit has 20% more capability than a 5 ton unit. Units are typically sized to meet the 98% probabily day not the record hot day
- Never oversize. Oversizing increases cycling, causes shorter runtimes, is less efficient, less comfortable, far less humidity control, and increases operation and initial costs.
- As a general rule, units become less efficient the further they get from 3 or 3.5 ton capacity.
- Consider going with the 5 ton unit and get a desuper heater (desuperheaters increase unit efficiency and capacity about 2-5%).
Look forward to seeing you post what you end up doing.
Alex
What would a super high efficiency ASHP cost you? At the prices you are quoting it seems a high efficiency Trane or Amana ASHP might be far more economical.
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183eej
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| 10/25/2008 7:04 AM |
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Posted By Alex_in_FL on 10/17/2008 11:49 PM
Wow! You are talking big $$ there. My thoughts are:
- Could you possibly install two separate 3 ton units instead of one large unit (vice making zones?) This will likely be more comfortable and more energy efficient.
- You need to tell them to give you a load calc. For $50K they should be giving you one for sure. Even if you have to pay them $100 it is worth it.
- Keep in mind, a 6 ton unit has 20% more capability than a 5 ton unit. Units are typically sized to meet the 98% probabily day not the record hot day
- Never oversize. Oversizing increases cycling, causes shorter runtimes, is less efficient, less comfortable, far less humidity control, and increases operation and initial costs.
- As a general rule, units become less efficient the further they get from 3 or 3.5 ton capacity.
- Consider going with the 5 ton unit and get a desuper heater (desuperheaters increase unit efficiency and capacity about 2-5%).
Look forward to seeing you post what you end up doing.
Alex
What would a super high efficiency ASHP cost you? At the prices you are quoting it seems a high efficiency Trane or Amana ASHP might be far more economical.
I'm with Alex on the load calc. Gotta have it.
I would take it a step further, though, and run the load calc through an energy auditor such as the one Elite Software has that uses bin data and determine projected utility costs for the various systems you are looking at. I compared geo with a desuperheater to a high efficiency ASHP with a gas furnace backup and a 14 SEER AC with an 80 AFUE gas furnace and a standard hot water heater and the monthly cost to operate the geo was $75, the ASHP was $153 and the 14 SEER AC and gas furnace was $234. I've been tracking actual geo costs for 12 months now and it's averaging about $55 per month so the Elite projections were actually conservative.
My geo cost $14K and I had hard bids of $11K for the ASHP and $9K for the 14 SEER AC and gas furnace for a $3K difference on the ASHP and $5K on the 14 SEER AC. The payback on the geo over the ASHP was 2.5 years and 2.2 years over the 14 SEER AC. The rate of return on the geo over the ASHP was 36% and 41% over the 14 SEER AC. If the $2K tax credit was available to bake into the deal, the payback would have been under a year and the rate of return would have been hard to explain to someone suspicious of numbers (figures never lie but liars are always figuring).
My counsel would be to line up the systems side by side and determine the true difference in cost for each system. Then get a descent cost projection to operate each system then do your payback and rate of return calcs.
It was money that got me to go with the geo. The comfort level of the geo though is the nice surprise. It's pretty amazing.
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Dale Walker
EarthTap Energy
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Where the sun never sets on energy savings
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TechGromit
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| 10/25/2008 8:42 PM |
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Posted By 183eej on 10/25/2008 7:04 AM
My geo cost $14K and I had hard bids of $11K for the ASHP and $9K for the 14 SEER AC and gas furnace for a $3K difference on the ASHP and $5K on the 14 SEER AC. The payback on the geo over the ASHP was 2.5 years and 2.2 years over the 14 SEER AC. The rate of return on the geo over the ASHP was 36% and 41% over the 14 SEER AC. If the $2K tax credit was available to bake into the deal, the payback would have been under a year and the rate of return would have been hard to explain to someone suspicious of numbers (figures never lie but liars are always figuring).
My counsel would be to line up the systems side by side and determine the true difference in cost for each system. Then get a descent cost projection to operate each system then do your payback and rate of return calcs.
It was money that got me to go with the geo. The comfort level of the geo though is the nice surprise. It's pretty amazing.
That 14k Geo cost, is that an estimate, or did you have that system installed and what is it? I just had my Geothermal system replaced for 15k, That was for a Water Furnace Premier model, P046T 46,000 BTU (basically a 4 ton system I beleive), it also included a Desuperheater with a new Electric Water Tank, and 5KW Emergency Heat.
I was also Qouted 8k for an ASHP for my upstairs heating zone, but that's not a firm Estimate. The new Geo system is for the Downstairs zone only. I've been toying with the idea of picking up another Goodman ASHP unit to toss outside to replace the existing 7 year old unit until I can scrap up the cash to go Geo upstairs too. If I don't do it by next year, that option will be closed to me, R-22 systems will no longer be sold next year and the existing line sets will not support the higher pressure R-410A refrigerant (not to mention the Exchanger in the blower unit). I could pick up a New Goodman outside compressor for around 2k.
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joe.ami
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| 10/26/2008 9:05 AM |
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David,
I'm sorry, i missed something, if you already have central AC, then why do you need all new ducts?
J |
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Geothermal; Savings Underfoot |
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DavidYon
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| 10/26/2008 2:14 PM |
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Posted By joe.ami on 10/26/2008 9:05 AM
David,
I'm sorry, i missed something, if you already have central AC, then why do you need all new ducts?
J
Mostly the central lines will be replaced, although I have to clarify whether the basement-accessible R4 flex will be replaced with rigid that's better insulated. Main reasons for all the fuss:
- Original main trunks were undersized compared to the branches, and this has a noticeable impact on how much air gets to the furthest rooms.
- I'm splitting the house into two zones.
- Nice side-effect will be to tighten up the seals, and replace the fiberglass trunks with real sheet metal.
I've been meaning to have the house split-zoned for awhile now. I suppose I could ask how much of the estimate is for duct work and put that into the home-improvement budget and exempt it from my ROI calculations.
But yet another cost presented itself. My propane supplier owns my underground 500-gal tank, and the agreement is pretty one-sided (but what else was I going to do when I bought the house?). In theory I'm on the hook for $500 to have him dig up and remove the tank, or if he declares that "infeasible" (which would be a hell of a stretch) I'm on the hook to buy it at his "replacement cost, installed". If I want to buy the tank, also the "replacement cost, installed" price.
Now this tank has been in the ground for 16 years, no way in hell I'm spending big money to own that. The only reason I would even entertain keeping it that is I'm strongly considering putting in a propane standby generator, but 500 gal is overkill---an above-ground 100 or even 50 gal tank would be more than enough.
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project_x
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| 10/26/2008 5:07 PM |
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| What is your contract for the propane? I was talking with a former propane salesman, he said never pay for a hookup, or for tank removal, they'll always take care of it. Switch to call when you need propane service, and never call. After 16 years, that tank is more than paid for. |
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DavidYon
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| 10/26/2008 8:41 PM |
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Posted By project_x on 10/26/2008 5:07 PM
What is your contract for the propane? I was talking with a former propane salesman, he said never pay for a hookup, or for tank removal, they'll always take care of it. Switch to call when you need propane service, and never call. After 16 years, that tank is more than paid for. Agreed that at this point, I should not be on the hook for any charges related to the tank. But the terms I outlined above are the terms of the "agreement", which I did sign, but is pretty weak if they ever tried to enforce it. I think what's fair is for me to buy the tank at a nominal charge, and from then on get propane delivered on demand.
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engineer
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| 10/26/2008 8:52 PM |
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I'm having trouble wrapping my mind around such a one-sided contract that YOU didn't sign - do I understand correctly that you inherited the tank from the prior homeowner? Did you sign something at closing agreeing to be bound by the terms of the prior owner's contract with the propane guy?. If you didn't sign and he has no enforceable lien against your property, tell him to come and get it and forget about any $500. That or buy it from him at its depreciated value.
On the other hand, I wouldn't be so quick to go with a small tank for a standby generator. Whatever worst case scenario applies to your area (in Florida it is hurricanes), consider whether you could be without power for several weeks. This is a real possibility in Florida and other hurricane-prone areas. Further north, a severe freezing rain incident, though rare, can knock power out to rural areas for weeks. A worsening economy may cause a cash-strapped utility to shave its recovery capabilities. Our local utility bemoans the loss of experienced lineman owing to age and retirement. Do the math.
You might figure that in a long outage your handy-dandy propane co can / will truck 50 gallons out to you every several days. Maybe, maybe not. A major protracted outage may disrupt one or more of: their supply line, local demand for propane, and their ability / desire to take care of you. Remember also the 80 % rule - allowed fill capacity of any propane tank is only 80% of nominal capacity.
I have a 1000 gal underground tank connected to an 1800 RPM 25 KW standby generator. Probably overkill, but I didn't build my dream house only to have to abandon it whenever we do finally get hammered by a hurricane (hasn't happened since 1964) |
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DavidYon
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| 10/26/2008 9:40 PM |
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Posted By engineer on 10/26/2008 8:52 PM
I'm having trouble wrapping my mind around such a one-sided contract that YOU didn't sign - do I understand correctly that you inherited the tank from the prior homeowner? Did you sign something at closing agreeing to be bound by the terms of the prior owner's contract with the propane guy?. If you didn't sign and he has no enforceable lien against your property, tell him to come and get it and forget about any $500. That or buy it from him at its depreciated value.
On the other hand, I wouldn't be so quick to go with a small tank for a standby generator. Whatever worst case scenario applies to your area (in Florida it is hurricanes), consider whether you could be without power for several weeks.
...
You might figure that in a long outage your handy-dandy propane co can / will truck 50 gallons out to you every several days. Maybe, maybe not. A major protracted outage may disrupt one or more of: their supply line, local demand for propane, and their ability / desire to take care of you. Remember also the 80 % rule - allowed fill capacity of any propane tank is only 80% of nominal capacity.
It wasn't an item at closing, no. But the only way to get propane service once I took possession was to sign a short, very one-sided agreement. So back in '02 the path of least resistance was to just sign up with these guys, not really considering that backing out was even a remote possibility. I now realize that the only alternative would have been for them to come rip the tank out of the ground, and then I'd be on the hook to get something else online from some other propane service.
Had I done that, the previous owner (I assume he signed something similar), would have been on the hook for the $500-to-rip-it-out fee or to buy the thing at installed replacement cost if the company decided to call it infeasible to take the tank out.
I'm guessing that digging up and removing the tank would cost a heck of a lot more than $500. So if they are going to be pr*cks about it, they may try to pull the infeasible stunt. If not, you'd think they'd be pretty incented to just sell the thing at depreciated value, which would be a win-win situation as far I can see.
And yes, I see your point on tank capacity. I guess if I'm bothering to get a generator, then being prepared for some worst-case conditions wouldn't be a bad idea. Historically we have only lost power for approx 4-6 hours at a time at the most, about once or twice a year. Usually that's car accidents near transmission lines, occasionally it has been weather related.
So unless the 500-gal tank is getting close to the end of its life, or otherwise might be an albatross, the easiest thing would be to just keep it if the terms are reasonable.
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joe.ami
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| 10/26/2008 10:18 PM |
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David, I'm having an especially hard time here helping you with the do I or don't I geo situation for the following reasons:
You have ducts but want different ones
You have attic insulation but want more
You have to pay for a propane tank you didn't order
You have to up grade electric.....
You saddled your geo purchase with a variety of extra things and still point out that it pays for itself in ten years.
Do you need a new car? Based on your ROI (50K in 10 years) geo can buy you a Lincoln as well in just 6 more years (8 if you want all the bells and whistles).
j
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DavidYon
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| 10/26/2008 11:08 PM |
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Posted By joe.ami on 10/26/2008 10:18 PM
David, I'm having an especially hard time here helping you with the do I or don't I geo situation for the following reasons:
You have ducts but want different ones
You have attic insulation but want more
You have to pay for a propane tank you didn't order
You have to up grade electric.....
You saddled your geo purchase with a variety of extra things and still point out that it pays for itself in ten years.
Do you need a new car? Based on your ROI (50K in 10 years) geo can buy you a Lincoln as well in just 6 more years (8 if you want all the bells and whistles).
j
Well, yes and no:
- The duct rework, agreed, should probably be taken out of the I in the ROI
- The attic insulation is a bit of a grey area, since it probably should be done anyway. But in terms of operating costs it slows down the R in ROI, since it also reduces my propane bill. In fact, it reduces my propane bill more than it reduces my geo operating costs. On the other hand, doing the attic is probably the difference between 5 and 6 ton, which kinds of lumps it into the I. Maybe split that down the middle.
- Disposal of the propane tank and/or the cost of renegotiating terms is directly related to the geo switchover. This is in the same category as removal of the existing furnace/AC compressor---which I assume is costing me money but simply wasn't itemized in the quotes I've gotten.
- Upgrading electric---ditto. If I weren't doing the geo, I wouldn't have to be upgrading the electric. Squarely in the I of ROI.
So no, a lot of these items are not "extras". I simply would not have to be spending money on them if I stayed where I am with propane. But clearly they are examples as to why it's harder to get there on refits.
And the original point I was trying to make is that once the break-even time horizon stretches out to ten years, things start to get squirrely fast. There are lots of unknowns in the kind of time period---length of occupancy, rates of fluctuations of the costs of different energy sources, etc. So the risk that break-even may not be reached in ten years goes up, much more so than, say, a five-year estimate.
So if I was looking at an easily-demonstrable 6-7 year payback? Sign me up! But once it starts to approach ten...? Then as I said before, I have to start getting creative in how I assign value since the payback is no longer such a sure thing.
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joe.ami
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| 10/26/2008 11:25 PM |
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OK, again, take out the "optional" upgrades and I think your ROI as shorter than your extremely baggaged presentation.
Use the existing ducts and save thousands.
Don't do crap with the attic and save thousands.
Leave the propane tank in the ground (trust me they'll come get it for free if theey want it) and save hundreds.
Don't buy the Lincoln and save thousands.
You can paint the picture however you want, but with geo you'll save 10's of thousands. Or you can lose with everything else.
To speak plainly, did you have other investments right now that garunteed double your money in ten years? Sign me up.
j |
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Just a Mechanic;
Geothermal; Savings Underfoot |
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DavidYon
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| 10/27/2008 9:04 AM |
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As I said:
- As I have said, and will say again, I will recompute the ROI without the rezoning.
- The original $50K for 6 ton estimate does not include the attic work.
- Nor does it include the propane tank disposal/changeover. I do think I can get that cost down into the white noise if not outright zero. I mostly wanted to vent on how underhanded these whole you-get-the-tank-for-free deals can get.
Joe, the tenor of your recent responses imply that I am trying to diss geo. I'm not. I'm more motivated than most people to get there. Witness the crazy amount of research done, the high (but not infinite) threshold of pain I have for up-front costs, and my high (but not infinite) threshold of pain for the disruptions the refit will incur on the homefront. I'm willing to get past all of that.
Equating a geo refit with doubling your money in ten years is a bit of a stretch. The numbers I am personally looking at don't get anywhere near close to a $100K savings over ten years. Even if we can somehow get creative with reapportioning the install costs into other buckets, I don't see how it gets much below $35K for the initial install. The numbers I am looking at don't get anywhere near close to $70K in ten years.
My total energy costs (heat, a/c, hot water) this year will be about $4200. Figure on geo it will be around $1200. Nominally, in ten years that's only $30K---not even a full payback. To get that figure higher you have to start playing with the different rate increases between electric and propane over time.
At that point it's crystal ball time, no gaurantees given. Yes, propane has almost tripled in ten years while electric went up around 40% in the same period. Will propane triple again? Perhaps. Will electric continue its fairly shallow upward rise? Maybe.
I've played with several different scenarios and can see how you can bring the break-even point somewhere between 8-10 years. To get it significantly sooner you have to start making some aggressive assumption on propane increases. Again, maybe that will happen. Seems more likely it will start to track what gasoline did---once you hit a certain point the price stabilizes due to the fact that people are forced to cut back, which curbs demand.
At any rate, I will find out what portion of my costs are attributable to duct work, and get back to y'all.
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Talking Dreams
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| 10/27/2008 6:23 PM |
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Greetings all! I am brand new here. I am a housewife and have been investigating the geothermal heat pump possibility. I just found this forum and I am riveted by the discussions I've read.
I came here to FIND information not to give it, but I can't help commenting on this thread.
David: You are right when you say a geothermal heat pump will probably not be the deciding factor for someone to buy your home. However, if there are two otherwise identical homes for sale and only one of them has geothermal, I believe that in today's market you could sell your house for at least $5k more than the comparable home without geothermal. So you do have to take the increased value of your home into consideration when calculating the cost of the new system.
I am throwing the 5k out there because right now very few people know about geothermal and even among those that know about it, there is skepticism as to how much energy is actually saved over other heat/a/c systems. Ten years from now, who knows? Geothermal will either become the thing to have, or the technology may be surpassed and your system will become the "beta tape" of the heat industry!
On another note, I happen to know quite a bit about contract law. Your propane company presented you with an adhesion contract which you signed under economic distress. Let the propane company take you to small claims if they think you owe them money for the tank. First, they won't want to bother with that. Second, the court is unlikely to agree that you owe them anything.
I'm going back to reading the other threads about the heat pumps now. |
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