So I need an opinion from some folks on here: I am planning on building a 2 story (above ground) house with about 3500 finished sq. ft. above ground with a full walkout basement which will be about 1200 sq. ft. unfinished (in addition to the above ground sq. ft.) The total square feet (finished and unfinished) will be approximately 4700 once completed. I am building about 30 miles west of Minneapolis, Minnesota. At the recommendation of another professional, I was planning on building with an ICF foundation/basement (below ground), using SIP’s for the 2 story above ground walls and using raised heel trusses for the roof. Doing it this way (as opposed to an all ICF home) is a cost saving measure, or so I am told. I was looking at doing a geothermal system HVAC system in the home. Some building professionals have suggested that the home I’m planning on building in so energy efficient, that a geothermal system may not pay off. I of course know the benefits of a geothermal system and would love to put one in, but would like to get some opinions whether this line of thinking is correct? If I do construct the house using the afore mentioned methods, would the building envelope be “to tight” to really reap the full benefits of the added cost of a geothermal system vs. a smaller, more economical traditional HVAC system? Any thoughts or opinions would be greatly appreciated.

I've always found this argument amusing. No matter how efficient your home is, there is NO other system as efficient as Geothermal to heat and cool your home. A Btu is a Btu, regardless of how it is produced.  What matters, to you,  is what it costs to produce the required Btu's. And don't forget... the cost to own your home should be cheaper with Geo, than without. Will the payback be longer? Most likely. However, the 30% tax credit will take a big bite out of the payback time.

Bergy

Bergy,

You are absolutely correct. The price of a BTU is a price of a BTU. Perhaps I should have asked the question a different way. I am planning on never moving from this house once it’s completed, so the long term pay off isn’t a question for me.

If a geothermal system costs say….$15,000 after the tax incentives, rebates, etc. and a traditional HVAC system costs say…..$5000 (just throwing some numbers out there, albeit relatively close); with an extremely tight building envelope, it will obviously take longer to recoup the $10,000 different due the high efficiency of the home. The question was posed that is it worth it to invest the extra $10,000 up front vs. the length of time to recoup the cost of a geothermal system? In Minnesota it takes on average, 7 – 10 years for a geothermal system to pay for itself with a traditional stick built home. I would assume that with the mentioned building method (ICF/SIP) that it will take 15 – 20 years for the geothermal system to pay for itself.

I absolutely agree that the geothermal system is the most efficient out there. I also understand that with the use of ICF and SIP construction, a traditional HVAC system can accomplish almost the same result as a geothermal system with a fraction of the upfront cost.

What kind of traditional HVAC system are you considering? Do you plan to have AC? Need to factor in equipment life and estimated utility increases into your payback calculation.

Anyone that says "do it" or "don't do it" without doing the math for your particular situation is doing you a disservice. Geothermal quotes can vary widely, so I would get several quotes to properly evaluate payback. Make sure the quote you use is from a reputable contractor. No point is using the lowest quote in the payback calculation if the contractor isn't good. No one knows if the tax credit will be around past 2016, so based on what we know today, it's use it or loose it.

topace4,

Try to estimate the cost of owning a fossil fuel + AC system (if you need AC for comfort) and the cost of owning a GSHP for ever, as you plan on never moving from this house. You have to pay for either choice. Select the one that costs less.

Regards,

Masoud

Topace4, I sent you a private message. I would be more than willing to share my experiences with you regarding Sips and geo. 600rmk

How about sharing your experience with all of us?

I've been reading these forums for quite some time and accredit most of my knowledge about Sips and Geothermal to the people that have posted here and shared their experiences. My post to Topace4 was probably a bit misleading. I have not built my new home yet and do not have data regarding performance of Sips or Geothermal in a real world application. What I do have is numerous quotes from Sip and Geothermal contractors from MN. Those are the things that I wanted to share. I would absolutley love to use Geo in my new home. The unfortunate part is that in all the companies that I have dealt with, there hasn't been any consistency in the quotes. They've ranged anywhere from $28k to $52k. That makes me a little leary about going the Geo route. I have had people say that Sips and geo are the perfect fit and others say that it will never pay itself back if you have an extremely efficient building envelope. Obviously when building with a tight envelope, the HVAC system can be reduced in size and save a lot of money but will it truly be enough to make the system pay for itself in a reasonable amount of time? I plan to live in this house for a long time but if I ever have to sell it, Sips and Geo are not really a big selling point in my area. Then again I'm not using those technologies to try and sell my home. I am well aware of the tax credit being offered by the federal government but I have yet to hear from anyone that has actually gone through the process of using it on their taxes. Most contractors that I have dealt with treat the credit as if it were an instant rebate off the system. It is not a 30% instant rebate! It's a tax credit that you file when you do your taxes for the year after the install. That means I'm still financing 100% of the cost of the system with my mortgage. If anyone has experience dealing with a tax credit for Geo, I'd like to hear about it. Obviously the 30% tax credit just became available this year but if you have stories about the previous tax credit, I'm still willing to listen. On the flip side, my local power company offers a $400/ton rebate on heat pumps and there is also a possibility that the MN Department of Commerce (Energy Division) will have additional money available in the form of a rebate for those who choose to install geothermal systems. I talked to a person at the Dept of Commerce and she told me that additional money from the US Dept of Energy may be providing millions of dollars to each state for things like geo, solar, wind etc. The amount available would be the lesser of 35% of the system cost or $10,000. I specifically asked if this rebate could be combined with the tax credit from the federal government and the person said that yes it can be. None of that is final and there is no guarantee that it will be available. Each state has to provide an environmental impact statement to the DOE before they will be granted the money. If available, the money probably wouldn't be available until mid to late 2010. If this becomes a reality then the price of geo will be close to, if not less than, a high efficiency HVAC system. That's what I know for now. Thanks again to all of you who have helped me in my quest for knowledge about Sips and Geo.

I'm gonna guess you are in the early stages of your research as $5,000 won't buy you a highend furnace and ac change out let alone a duct system to go with it.
You might find that your fossil system runs more than 10K while the 15K could be the net geo cost (or it might be 30K). You need to get some bids and work with real numbers.

A "traditional system" can not achieve near the same result as GT. In a heating dominated climate 300% efficiency vs 95% is far from similar results and the fraction of the up front cost could be as high as 2/3rds.

Geo saves you just as much pct wise regardless of the homes construction. Net savings in dollars while the same percent varies wildly depending on the envelope. Other factors are fuel available natural gas vs propane or fuel oil and savings such as insurance premiums for homes without gas appliances.

You could concievably heat and cool your home for $30/mo with the right insulation and heat plant, but you might spend an extra $100K getting there, so you need to get real numbers and balance lifetime ROIs with budget.

Good Luck,
Joe

I'm also in the planning stages, asking a lot of the same questions.  My house will be significantly smaller (approx 2000 sq ft ranch w/walkout basement).  My plan is to use sips, probably raised heel trusses with spray foam for the roof, & some sort of insulated basement - either ICF or poured with 2" foam board on the exterior, and an insulated slab. 

I've heard the same things that you mentioned, except for one thing.  The hvac guys I've talked to have pretty much universally said that once we have the plans drawn, to bring them in & they'll do the manual J & look at different scenarios to see what makes the most sense. 

The numbers I've gotten have been around $10,000 for a high efficiency gas furnace and $25,000-$30,000 for geothermal (before the rebates).  In my case, it would be $7000-$10,000 more when all is said & done.   Initially I made an assumption that I could save $100/month in heating costs,.  That would keep my payback under 10 years.  Now it's sounding like even with a gas furnace, heating costs may be so low that $100/month isn't reasonable to expect.  That's going to push the payback out some.

Here are some things I'm considering.  All of these payback numbers are based on today's gas prices.  As we all know, they tend to go up.  Over time, my gut tells me that the payback will get shorter.  At the very least, it is, in a sense, insurance against rising costs.

Geothermal units last significantly longer, from what I've heard.  If you plan to be in the house more than, say, 15 years, it's probably realistic to factor in cost of replacement of a furnace when you look at payback time.

We would like to do photovoltaic at some point.  Right now it's just not cost effective, so the plan is to wire the house for solar but not do it now.  I mentioned that gas prices tend to go up - well, so do electric rates.  The option of installing solar gives the option of essentially heating your house for "free" - not paying for gas, not paying for electric.  You don't exactly have that option available with a gas furnace.

just a couple thoughts.  for what it's worth, I haven't made any final decisions yet.  We're hoping to break ground in about 2 months - I'll be happy to share what we end up doing...


edit:

I forgot to add one thing.  You need to do some research on your financing options.  I work for a financial institution, and will not get a loan through my bank.  We (as many banks do) sell mortgages to 3rd party institutions, and they eventually end up part of mortgage-backed securities.  Because the bank sells the loans, they give up lots of flexibility. 

One of my concerns was exactly what you described.  Yes, I will get money back with the tax credits, but my monthly mortgage payment will remain the same.  There are some ways around this - 

You can refinance your home the following year after applying the amount of the tax credit to your principal balance.  The problem with this is that you will incur additional closing costs for the re-fi, and the bank may not view you as having enough equity to refinance.

You can try to get something similar to an 80/20 loan.   Once you have an idea of the amount of your tax credits, you can request a 2nd mortgage in that amount.  You'll have to make payments on 2 separate loans in the interim, but once you receive those tax credits, you can pay off the 2nd mortgage.  Problem with this one is that banks are tightening standards and 80/20's are getting harder to come by.

here's the route we're trying to go.  I found a local bank that does not sell their loans, which allows them more flexibility.  The loan officer I talked to said that if we had a big chunk of money that we wanted to apply to the principal, they could do an adjustment of the payment based on the new principal balance.  There was a fee involved, but it was something like $100 - well worth it in the long run. 

So....I wouldn't automatically go to "your" bank - make sure you shop around & ask the right questions...

$30 is close to monthly HVAC bill, and $100k may not be far off what it took to get there compared with the similarly-sized and age stick built house 1/4 mile down our road whose owner reports $300-$400 monthly electricity bills.

That said, there are other benefits of ICF over stick-built (termites, durability, sound reduction) that are hard to price.

Star Heating and Cooling replaced an old geothermal unit to cool and heat my home at a cost of $11,000 this past March 2009. This fall, circuit breakers started tripping, getting hot, and we had no hot water. I contacted a electrican(s) who discovered that the new geothermal unit far exceeded the capacity of my homes electrical capacity. I have to upgrade the electrical service to my home from a 400 meter base to a 600 meter base supplied by Duke Energy. The approx. cost for the electrical upgrade to service my home is approx. $4000. I have several other bills related to this situation.

Is Star Heating and Cooling liable for installing a system that far exceeded my homes electrical capacity?

Please advise,


Donald D. Thomas
7075 Hawthorne Drive
Plainfield, IN 46168
Phone 317-523-9014
Fax 317-839-0063
Email : [email protected]

It's hard to imagine any $11k geo system consuming so much power so as to necessitate a service upgrade from 400 to 600 Amp

Their must be much more to this story...do tell!