Usually the rule of thumb is that a forced air unit uses 1000 watts/per ton when running. We see average running costs of $300/ton/year, which includes heating, A/C, and domestic hot water with a 2 tank setup and electric 2nd tank, at 14 cents/KWH.

Historically, propane went up by about 300% in the last 15 years, whereas electricity went about by about 40% in the same timeframe. Again, just ballpark numbers.

That would be $2k savings a year, docjenser, minus extra depreciation ($10k over 20 years would be $500/yr) minus higher maintenance expenses (joe ami says plus $500/yr) minus higher interest costs ($300/yr to borrow $10k for 20 years at 5 percent interest) minus what you would have earned if you had actually invested it (10 percent a year historically or $1k/yr.)

And as always, that would be $2k savings compared to what? Blowing R30 cellulose in the attic? Installing R6 insulating, sealing drapes? Buying a case of caulk?

Posted By Rosalinda on 01 Jan 2012 08:30 PM
There is no doubt the price of propane will increase, as will all heating fuels, but wont the price of electric also increase? Of course it will, so you will still have that electric bill to to run the geo system. Just how much electric does a geothermal system use? Is there some kind of rule of thumb, X number of kWh/ per ton?

-Rosalinda

Here's some historical data from my state (New York) for the last 14 years as posted on the NYSERDA web site:

http://nyserda.ny.gov/en/Programs/Energy-Prices-Supplies-and-Weather-Data/~/media/Files/EDPPP/Energy%20Prices/Annual%20Prices/residential_energy05_09.ashx

The pricing on the table is adjusted for inflation and is in 2009 prices.  Electrical pricing has been pretty stable while fuel oil and propane have increased substantially.  Cleaning up emissions of the older coal plants, and taking a lot of these off line will probably have some effect on pricing, but there is a glut of cheap natural gas, and a lot of the plants have already gone to this fuel, so I doubt the newer emissions standards will really effect price that much.  This is for NY, but you should be able to find similar info for your state.

As far as how much a system uses, I can give you some info on ours.  3 ton system with desuperheater and horizontal ground loop.  The design specs are for an annual heating cost of $593, cooling cost of $35, hot water cost of $210 (which also includes the electricity our electric hot water heater uses).  This total of $838 compares with a total cost of $3247 if we continued with oil.  This is based on our $0.11 kwh electic rate and $3.45/ gal oil.  House is 1400 sq ft with an annual heating load of 71 MBtu, annual cooling load of 11.5 mBtu, and annual water heating load of 10.6 mBtu.  These are the design specs, and it's too soon to have more than a couple of months under our belt. So far, Nov showed an increase of about 300kwh over our average monthly electrical usage (or about $33).  That # for Dec. looks like it will be around 600-650 kwh (or around $70).  So far, so good in my book.  We're using less electricity to run the system than I expected based on the HDD day info so far this year (it's been warmer than average).

FWIW, I've already done as much in insulation and air sealing as is practical in the 1840's vintage house we live in.  There is very little that can be done with it, at this point, without major work that would give very little payback over what the geo system already provides.

Posted By toddm on 02 Jan 2012 09:22 AM
...minus what you would have earned if you had actually
invested it (10 percent a year historically or $1k/yr.)

So, you're suggesting that it makes sense to base "investment"
decisions on an expected "historical" return of 10% per year?

...credibility calibration complete,

LK

I am suggesting that the best way to end up with some money is to avoid spending it. Patience also helps. Over 30-year periods, the stock market almost never disappoints. You will see that buying Vanguard 500 Index on its inception in 1976 was worth 10.36 percent/yr over the next 35 years, in fact. https://personal.vanguard.com/us/funds/snapshot?FundId=0040&FundIntExt=INT

I got there a couple of years late but I am building my house for cash. Piddling utility bills. No mortgage. No geo needed.

Posted By sesmith on 02 Jan 2012 09:42 AM

Posted By Rosalinda on 01 Jan 2012 08:30 PM
There is no doubt the price of propane will increase, as will all heating fuels, but wont the price of electric also increase? Of course it will, so you will still have that electric bill to to run the geo system. Just how much electric does a geothermal system use? Is there some kind of rule of thumb, X number of kWh/ per ton?

-Rosalinda

Here's some historical data from my state (New York) for the last 14 years as posted on the NYSERDA web site:

http://nyserda.ny.gov/en/Programs/Energy-Prices-Supplies-and-Weather-Data/~/media/Files/EDPPP/Energy%20Prices/Annual%20Prices/residential_energy05_09.ashx

The pricing on the table is adjusted for inflation and is in 2009 prices.  Electrical pricing has been pretty stable while fuel oil and propane have increased substantially.  Cleaning up emissions of the older coal plants, and taking a lot of these off line will probably have some effect on pricing, but there is a glut of cheap natural gas, and a lot of the plants have already gone to this fuel, so I doubt the newer emissions standards will really effect price that much.  This is for NY, but you should be able to find similar info for your state.

As far as how much a system uses, I can give you some info on ours.  3 ton system with desuperheater and horizontal ground loop.  The design specs are for an annual heating cost of $593, cooling cost of $35, hot water cost of $210 (which also includes the electricity our electric hot water heater uses).  This total of $838 compares with a total cost of $3247 if we continued with oil.  This is based on our $0.11 kwh electic rate and $3.45/ gal oil.  House is 1400 sq ft with an annual heating load of 71 MBtu, annual cooling load of 11.5 mBtu, and annual water heating load of 10.6 mBtu.  These are the design specs, and it's too soon to have more than a couple of months under our belt. So far, Nov showed an increase of about 300kwh over our average monthly electrical usage (or about $33).  That # for Dec. looks like it will be around 600-650 kwh (or around $70).  So far, so good in my book.  We're using less electricity to run the system than I expected based on the HDD day info so far this year (it's been warmer than average).

FWIW, I've already done as much in insulation and air sealing as is practical in the 1840's vintage house we live in.  There is very little that can be done with it, at this point, without major work that would give very little payback over what the geo system already provides.

That mirrors what I have stated above, about $300/ton of load, annually, at our NY prices for heating, AC and domestic hot water.

Posted By toddm on 02 Jan 2012 06:39 PM
...but I am building my house for cash. ... No mortgage.

So, IF you really believed in your own gospel, WHY would you squander
cash that returns 10%+ when 30 year fixed mortgages are going for 4%?
...and closer to 3%, net of taxes!

"Watch what we do, not what we say."
- John Mitchell, (Crafty Richard's AG)

Thanks for the rule of thumb - that is very helpful

-Rosalinda

If you have historical oil usage data, another VERY rough rule of thumb would be that gallons of oil X 10 = annual electric use in kWh. For propane it would be gallons X 7. For example, I typically burned 1400 gallons of oil, now I use about 14,000kWh with the geo system. Again very rough and assumes an averageish COP (~3.5) and boiler efficiency (85%) but it should get you close in most cases. At current prices in my area, geo is roughly equivalent to buying oil at $1.00 per gallon, maybe slightly cheaper now as electric rates have actually dropped a bit over the last year.

Posted By toddm on 02 Jan 2012 09:22 AM
That would be $2k savings a year, docjenser, minus extra depreciation ($10k over 20 years would be $500/yr) minus higher maintenance expenses (joe ami says plus $500/yr) minus higher interest costs ($300/yr to borrow $10k for 20 years at 5 percent interest) minus what you would have earned if you had actually invested it (10 percent a year historically or $1k/yr.)

And as always, that would be $2k savings compared to what? Blowing R30 cellulose in the attic? Installing R6 insulating, sealing drapes? Buying a case of caulk?

1) Keep in mind that the life expectancy of geo heatpumps are around 25 years, much longer than a conventional system. we are replacing quite a number of them which were installed during the mid 70s oil crisis on the shore of Lake Ontario. They are still running strong, but with tax credits owners choose the exhange them for higher efficiency models with new warranty and higher comfort (2 stages). Still tying into the same ground loop and same ductwork, so the new heatpmp is a similar price then a new conventional system (A/C, furnace, new refrigerant lines). But even so, lets say "depreciation" is $500 a year.

2) You either have the money to pay for the system, then you can account for a loss in income, or you need to borrow it, than you can account for the interest. It is either or, but not both. For a save investment (as sure as the savings with geo), such as a 10 year US treasury note, you currently get about 2%, so that is $200 a year. You loose your credibility if you retrospectively pick a stock or fund which did well. It would be like me arguing that heating oil tripled since 1998, and assume it will do so again in the next 13 years.

3) Higher interest costs? 10K at 5% for 20 years will cost you 5838.94 in interest over 20 years. 4) Maintenance. What is the increase maintenance over a conventional system? I would argue that you need to change the filter twice a year (same as conventional) and that is it. May be you could tell me what maintenance a closed loop system would need? I am not aware of anything. You don't seem to know any facts about geo system nor do you have any data. This seems to be caused by the fact that you do not own one, which is amazing in view that you have over 500 opinionated posts here. Nothing wrong with it, but you should stop misleading people here.

There is a simple formula here. Worst case you don't have the money for the $10K increased cost, you take out a loan at 5% for 20 years. It will cost you a monthly payment of $66, or $792 a year. After 20 years the additional $10K is paid for, including interest.$2000 in operational savings a year still save you $1200 a year, no matter how you spin it. More if energy prices go up.

Compared to what? A conventional system serving the same load, not matter if R30 cellulose, R6 insulation, sealing drapes, or a case of caulk is in the equation.
Which begs a last question. You decided to go without geo, you have no experience with geo, and you don't understand the very principle about investing into energy saving renewable energy systems: Why are you posting here?

You can approach end of life with two strategies, Looby: long-term health care insurance or asset protection. The fact is only the govt can take your house from you.

In fact, docjenser, if you borrow $10k, your lender is probably going to want it back. So amortization, depreciation and interest expense would add up to $1,300/yr. Paying cash, the opportunity cost plus depreciation would be $1,500. You'll have to ask Joe Ami why he thought geo maintenance costs more. Vanguard Index 500 is a mutual fund that holds stocks that account for 70 percent of the stock market's value, so it is pretty hard to call it an arbitrary pick on my part.

Wrong you are about my understanding of green. Small is greenest of all, and geo would rarely make sense in a small house. There are lots of examples in his thread of people who used geo to great advantage, but they weren't investing. They were minimizing expenses. Do you invest in a Toyota Prius?

Posted By toddm on 02 Jan 2012 09:22 AM
That would be $2k savings a year, docjenser, minus extra depreciation ($10k over 20 years would be $500/yr) minus higher maintenance expenses (joe ami says plus $500/yr) minus higher interest costs ($300/yr to borrow $10k for 20 years at 5 percent interest) minus what you would have earned if you had actually invested it (10 percent a year historically or $1k/yr.)

Care to share my entire quote...... I may have said "even if geo was $500/yr to maintain.....it still saves" but I don't recall suggesting a standard well functioning and designed resi system costs $500/yr to maintain. We know you play games with words and numbers, let's not take me out of context to support your argument.

Can you tell me where to get 10% on money I invest today? "Historically" Doesn't help the fact that I'd be lucky to get 2% ($200) on a CD.

Posted By toddm on 03 Jan 2012 09:45 AM
There are lots of examples in his thread of people who used geo to great
advantage, but they weren't investing. They were minimizing expenses.

Congratulations! It appears that you've solved the great cosmic mystery that's
confounded algebraticians & statesmen since (at least) the mid 18th century.

Now, for the benefit of We The Ignorant, would you please reveal the elusive
but quintessential distinction between a penny saved and a penny earned?

We had been looking at ways to minimize our utility bills in preparation for retirement and had invested in solar for electricity and for hot water (electric backup). We then looked into what could be done to improve our heating costs and after researching geo we realized that we had a great natural asset in our overflowing artesian well which reduced our install costs dramatically since we could use open loop. Conversion from oil to electricity as the energy source was a big factor since we are now getting much reduced electric costs due to the solar. Bottom line is cost is the biggest motivation, and we really really wanted to get off of oil.

Posted By toddm on 03 Jan 2012 09:45 AM
In fact, docjenser, if you borrow $10k, your lender is probably going to want it back. So amortization, depreciation and interest expense would add up to $1,300/yr.

"There is a simple formula here. Worst case you don't have the money for the $10K increased cost, you take out a loan at 5% for 20 years. It will cost you a monthly payment of $66, or $792 a year. After 20 years the additional $10K is paid for, including interest.$2000 in operational savings a year still save you $1200 a year, no matter how you spin it. More if energy prices go up"

I walked you through it, by the hand, on the last page. $10K, 20 years, 5% interest, will result in $66 per month or $792 per year. That is interest and paying the loan back. Why do I need to add amortization and depreciation? The system is paid off! The additional $1208 I save per year (based on $2000 savings per year) will add up to $24,160 after those 20 years, more if fossil fuel prices increase. That is a pretty good ROI, considering the fact that I had not to invest not a single $ of my own money.
Now I could assume I would have invested my saved $1208 annually in a Vangaard mutual fund with an average return of 10.36%, giving me additional earnings of $26,383 and compound earnings of $29,399. For a total of $79,942. All of what I would not have without geo!
But you know what, I am not going to do that. I am going to stick with what I know I have, namely a positive cash flow even if I need to finance it and pay it back.
PS: No, I would not buy a Prius and call it an investment. I think it is a no fun car. I buy a TDI diesel. As a matter I have 2 of them. Now I can do good and have fun. That is what I call a real good investment!

Well docjenser, you may have reached for my hand but then you wandered off course. Geo costs more to buy (amortization) and more to replace (depreciation). Technically depreciation recognizes the decline in value of the asset each year as it heads off to the scrap pile. So, your $2k is reduced by $1,292 plus the maintenance premium. (I rounded up interest expense to $300 to get my earlier figure of $1,300.) Doubtless, the real numbers are different, but you get the picture. Paying a lot upfront is not an investment if the asset wears out, be it Prius, TDI or geo. That isn't to say that geo won't save money overall, once you compare hvac correctly, by doing a lifecycle cost analysis.

BTW I wonder how many folks thought refinancing mortgages was free money up until about 2008 -- "not a single $ of my own money" -- and where they are living now.

Posted By toddm on 03 Jan 2012 07:49 PM
... plus the maintenance premium.

WHAT "maintenance premium?" For geo? Higher maintenance than an
ASHP's outdoor unit exposed to rain, snow, ice, 110F, animals, debris?
Higher than a fossil fuel system with soot, oil burner, burner nozzles,
oil tanks, CO detectors, etc., etc.?

...BTW, would the acquisition of a clue be an expense or an investment?

LK

Posted By toddm on 03 Jan 2012 07:49 PM
Well docjenser, you may have reached for my hand but then you wandered off course. Geo costs more to buy (amortization) and more to replace (depreciation). Technically depreciation recognizes the decline in value of the asset each year as it heads off to the scrap pile. So, your $2k is reduced by $1,292 plus the maintenance premium. (I rounded up interest expense to $300 to get my earlier figure of $1,300.) Doubtless, the real numbers are different, but you get the picture. Paying a lot upfront is not an investment if the asset wears out, be it Prius, TDI or geo. That isn't to say that geo won't save money overall, once you compare hvac correctly, by doing a lifecycle cost analysis.

BTW I wonder how many folks thought refinancing mortgages was free money up until about 2008 -- "not a single $ of my own money" -- and where they are living now.

I don't get it where your $1300 a year come from. Your problem is that you add it all up. Amortization, Depreciation, interest, loss of potential investment return (at 10.36%) on money you would have saved, non existing maintenance premium. That is what I mean with misleading.
If I take out a loan to buy something, and pay back the loan plus interest, than the principle amount plus the interest are my cost of ownership (plus operating costs of course). No adding depreciation, or amortization, as costs. The thing is paid off!

Docjenser, ask your bookkeeer to explain depreciation to you.

Posted By joe.ami on 03 Jan 2012 09:46 AM

Posted By toddm on 02 Jan 2012 09:22 AM
That would be $2k savings a year, docjenser, minus extra depreciation ($10k over 20 years would be $500/yr) minus higher maintenance expenses (joe ami says plus $500/yr) minus higher interest costs ($300/yr to borrow $10k for 20 years at 5 percent interest) minus what you would have earned if you had actually invested it (10 percent a year historically or $1k/yr.)

Care to share my entire quote...... I may have said "even if geo was $500/yr to maintain.....it still saves" but I don't recall suggesting a standard well functioning and designed resi system costs $500/yr to maintain. We know you play games with words and numbers, let's not take me out of context to support your argument.

2nd inquiry