Homeowners are discovering that geothermal heat pumps are an affordable alternative in lowering the high costs of heating and cooling their homes. The following is a homeowner who found the geothermal alternative to his high energy bills:
Jim and his wife bought a very nice older two story home in the country near Mattawan, Michigan. The home was surrounded by woods with a pond and abundant wildlife that you could watch from the living room window. They loved their new home! It is January of 2008 and the temperature outside has been in the single digits for several days. The oil fired heating system is keeping the house at a comfortable 70 degrees. Things are going well, until they got their heating bill and realized that it cost $200 for the first week to heat their home. It didn’t take long to understand that they could be paying $3000 to $4000 dollars per year to provide the level of comfort that they had been accustomed to. They knew that energy costs this high would put a strain on the family budget, and they needed to solve this problem soon. Jim thought the logical solution would be to lower the thermostat. However, to afford the amount they had expected to pay for heat, they had to lower the temperature of their home between 60 to 64 degrees. That meant keeping their beautiful new home at a very chilly and uncomfortable level. Jim, in desperation and frustration, began to research for alternative energy sources. People he knew suggested that he needed to learn about geothermal heating and cooling on the internet. He came across a web site http://www.performancegeothermal.com/. From the information he received he was able to learn more about the affordability of geothermal heating and cooling, and discovered that he could obtain a free energy analysis and estimate from a local company.
Jim contacted the company via e-mail and was shortly contacted by a geothermal professional. After a brief discussion about their high energy cost and what they could do. An appointment was set for an energy analysis of their home. When the geothermal professional arrived the first item he needed to know was the heating and cooling load of the home. In order to accurately comprise this information a heat loss/heat gain analysis was completed using a special computer program based on ACCA’S (Air Conditioner’s Contractors Association) Manual J8. To be able to properly size any heating and cooling equipment you need to know this information. A contractor who doesn’t complete this analysis is guessing, and not doing his job professionally. Any one can oversize equipment to heat and cool a home. The problem with oversized equipment is it’s more expensive to operate, has higher maintenance cost, shorter life and comfort problems due to short cycling. After the heat loss/heat gain analysis was accomplished, the geo professional was able to input the information into an energy analysis to compare different systems operating costs, verses the installation expense to establish ROI “return on investment”. The following is the information gained:
Manual J Information
Heat Loss - 43089 btuh’s
Heat Gain – 27861 btuh’s
Energy analysis Information
1. Equipment energy cost
System One:
3.5 ton Geothermal Split System with Fuel Oil Furnace for Backup
Annual Heating Cost - $525.00
Annual Cooling Cost - $96.00
System Two:
3 Ton Air Source Heat Pump with Fuel Oil Furnace for Backup
Annual Heating Cost - $1461.00
Annual Cooling Cost - $117.00
System Three:
Existing Oil Furnace and Air Conditioning
Annual Heating Cost - $4160.00
Annual Cooling Cost - $139.00
2. Return On Investment
Economic Analysis - Comparison Case 1 - Sys. 3 vs. Sys. 1
First Year Costs
Heating cost : System 3 - $4,175 System 1 - $525
System Costs
System Cost: System 3 - $0.00 System 1 - $8,767.00
Net System Cost - $8,767.00
Loan Analysis
Net Loan Amount - $8,767.00
Annual Interest Rate - 8.00%
Savings Over Loan Term of 120 Months - $43,831.31
Monthly Average Savings - $365.26
Monthly Loan Payment - $106.37
Monthly Net Savings - $258.89 (Note: this is extra cash per month do to the savings)
Investment Analysis
Net Investment Amount - $8,767.00
Savings Over System Lifetime of 20 Years - $108,712.40
Monthly Average Savings - $452.97
Break-Even Years (At Zero Interest) - 2.3 Years
Return On Investment - 45.59%
Economic Analysis - Comparison Case 2 - Sys. 3 vs. Sys. 2
First Year Costs
Cooling: System 3 - $0 System 2 - $117
Heating: System 3 - $4,175 System 2 - $1,461
System Costs
System Cost: System 3 - $0.00 System 2 - $3,997.00
Net System Cost: - $3,997.00
Loan Analysis
Net Loan Amount - $3,997.00
Annual Interest Rate - 8.00%
Savings Over Loan Term of 60 Months - $14,068.13
Monthly Average Savings - $234.47
Monthly Loan Payment - $81.04
Monthly Net Savings - $153.42 (Note: this is extra cash per month do to the savings)
Investment Analysis
Net Investment Amount - $3,997.00
Savings Over System Lifetime of 15 Years - $52,008.42
Monthly Average Savings - $288.94
Break-Even Years (At Zero Interest) - 1.5 Years
Return On Investment - 68.94%
The system Jim installed was system one. His home now is a comfortable 70 degrees without those high energy bills.
Remember you are paying the money regardless if you pay the high energy bills or you invest in the equipment. After the high efficient equipment is paid for; the money is now in your pocket!
Written by:
Steve Shannon
American Performance Heating & Cooling L.L.C
E-mail: performancegeothermal@gmail.com
http://www.performancegeothermal.com/
