How to finance geo?

I have been lurking for months and have read 90% of the threads at least once but one thing I don't see discussed is how people are paying for their geothermal installations.

I have a 2750 sq ft home in NJ. We go through about 1,000 gallons of propane/ heating season with the stats set at 68 down/ 66 up. We have had 5 installers out and have received 4 bids. They are ranging in size and price from 2up/2down ton split to 3up/4down ton split and pricing from $48k to $60k. I won't go into the details of each because some appear way over priced ( 2/2 ton split, no desuperheaters $60k) to a more reasonable but still very expensive 3/3 ton split with desuperheater and duct work improvements for $48k.

My issue is that in order for me to install geo I will need to take a home equity loan for $50k which will put me at 90% loan to value, which I don't think banks will do in the current real estate market. Does the federal government have any loans available that aren't home equity based? I realize I will get 30% back but I need all of the money up front. I am just really surprised at how expensive it is but in the long haul, with propane as my only heating option, we will need to do this eventually.

 

I can only tell you what I did.
I determined the part I could do.
I determined the part I could learn to do
And I determined the part I would never be able to do.
I do have HVAC experience.
I hired a friend to do the load calculation. He did confirm my data. He was also a Climatemaster installer.
I let him quote me the equipment. I did not buy from him. Cost and worry about what kind of customer I would be if the vendor was a friend.
I found a driller that would drill to my specs, hook into the flow center, purge and fill with a methanol mix.
A good friend and neighbor did all new duct work with me as labor.
The unit came on line last October and has run without incident. My way is not the norm. My system is a single unit with one borehole. It seems the bulk of the problems are with multiple systems and shared loops. It can be done correctly and you have come to the right place for any and all advice.
My costs were contained and total investment was about 1/2 of the average cost for a system similar to mine. Good luck.
Steve

 

Have you checked the DSIRE website?

I tried to drill down for you. Here is the link I came up with:
DSIRE: Incentives/Policies by State: New Jersey : Incentives/Policies for Renewables & Efficiency

P.S. The following site mentions "energy-efficient mortgage loans for energy-saving home improvements":

Energy Savers: Selecting and Installing a Geothermal Heat Pump System

 

That's a big difference in pricing.

We are a drilling company that drills all of south jersey. Did your estimates include hvac and drilling prices separately?
I've heard of geo hvac contractors guesstimating the drilling prices, causing the total bundled estimate to higher than it should be.
Let me know if your interested, maybe I can help you with your drilling needs.

Dan Callahan,

Home Page

 

I actually did look at this website because I found another thread on the forum mentioning it. The installer we liked the best is out of PA, so he is not part of the NJ Clean Energy program, although he claims he ususes someone who is, but that the paperwork is painful and the state often rejects it.n If it were easier, then I could bank on two things: 1) $5,000 rebate and 2) a $10,000 interest free loan. Unfortunately there is no guarantee, and I would really like to use this installer.

Hi Dan, Nope, only one company provided it out separately and they wanted to install a total of 7 tons which feels like overkill so we won't be using them. The company I want to use did pretty much say he guesstimated the cost but was going to call drilling companies this week to get more accurate costing. I am in Springfield Twp, Burlington County, are you familiar with the geology here?

 

Yes i know the area. We are not too far from you. We are from Berlin, just outside of marlton and Medford. We can do a estate for your job if your interested, and your hvac contractor will not have to worry about finding a driller. Let me know what you think. What company did you speak with sk far and who are leaning towards using?

 

Spring is coming

and I am running out of two jobs in Ohio. Where is NJ? Have tools do travel. We also like helping folks be hands on.

How far is it from your house to DC?

Mark

 

Hey Mark, We are quite a ways from DC, I want to say 3.5 hours.

I do have sticker shock. No one seems to discuss the price online, maybe because it is more affordable outside of this area?

 

Hi and Welcome

Being Green is not cheap or easy, ask Kermit.

I wish everyone had all the money they needed because I would not have to work for mine so hard. Every market is different as to how contractors work and charge for there skills. I find I can do more in Cleveland dollars and travel to NJ or CT or NY than the local folks are able to do. Everyone's overhead and profit margins are different.

Mark

 

I am a consultant, I can live anywhere in the country and still make NYC wages however stupid me decides to live in the highest taxed state in the country.

I am doing what I can to be green. I just signed my solar lease contract, now I just need to get away from this propane. If I can't swing it financially this year, then I will shoot for next year but I won't be able to put off much longer if I want to stay in this house.

 

I am learning to be a consultant, and if I charged NYC rates propane might seem a good deal.

Mark

 

Exactly! $60k, even with 30% federal credit is somewhere around a 15 year payback. I told that guy I can buy a hell of alot of propane for that price!

 

Sorry

I was fixing a plumbing issue in DC by phone and iphone pictures. Your numbers sound high to me. I do things differently. My overhead is what it is. 3.5 hours is just a click in time. You could do more work.

Good luck,

Mark

 

HI Mark, I appreciate the offer but I also have been paying attention to the troubleshooting thread. It doesn't seem as if these systems are as cut and dry as traditional furnaces and if we have issues in the future I'd like to be able to call and have the local installer come out and deal with them. Plus I work too much to do the legwork and hubby is just too disinterested to deal with it.

 

Have you considered insulating? I'm looking into doing a geothermal project also and was very surprised at what the load calculations I was shown were telling me about what a little insulation (ok maybe more than a little). You would probably end up with a smaller (and thus less expensive) geothermal system and even if you didn't go ahead with that project, you could save on propane.

 

We have.
Our home is only 8 years old but it is in a very rural area and gets pounded by the wind and when the wind is blowing, we have recorded it at 45-65 mph. That combined with the fact that we had a horrendous builder means that our house is very leaky and drafty, especially the front and side which face the wind.

We have spoken with our geothermal installer of choice and his company is focused on green solutions and has recommended that we pull the siding and sheathing off the front of the house, blow in spray foam and then re-wrap, sheath, and re-siding the front and side of the house. I have asked for an estimate on that work. I expect it to be anywhere from $10-15k. I doubt that going down to a 2 ton/3 ton split from a 3 ton/3 ton split is going to cost that much less so now I am in even more of a financial conundrum!

I love my home in the summer, I just really want to love it in the winter too.

 

I would suggest having a comprehensive energy audit done (including a blower door test and infrared camera) by a well qualified/experienced person before deciding.

 

We did have the home energy audit done with a blower door test in 2008 but no infrared camera. I haven't a clue how to read it but the value was 3651 with the range that they proved as 793 (recommended), 2266 (typical NJ home) and 4532 (below average) but the estimated annual savings was only 3.6%. We already had the envelope sealed after this audit (full spray foam sealed envelope in attic) plus sill plate area in basement. It reduced our propane usage about 10-15%.

 

15%

Is a big savings, but may not be good ROI. Fixing systems is a non-issue if they are designed correctly.

Do you have all the windows open in the winter? LOL.

Mark

 

It will be a good ROI. In the past 3 years I have saved $1,502 in propane, the sealing was $4,000. I am anal, I keep excel files of propane and electric usage and I know I am using 100-200 gallons less per winter but I can't really count this winter since it was unseasonably warm.

It will be paid for in less than 4 years if I stick with propane.

Windows are the only good thing in this house, we made sure we paid extra for good ones. Too bad the rest of the house was built like crap.