Is geothermal worth it if you have gas & cheap electricity?

Discussion in 'General Discussions' started by Gallagher, Jan 20, 2011.

  1. Gallagher

    Gallagher New Member


    It's about time for us to replace our conventional gas HVAC and we can choose between a conventional system or a geothermal system. Our utility bills are currently very reasonable. Our house is well insulated and gas & electricity are pretty cheap in our area. I calculated that we would not break even (even considering the tax rebate) for 13 years. Has anyone else been in this situation and chose geothermal? Most people I've heard from who switched to geothermal had very expensive utility bills and thus the decision was much more straightforward.

  2. Mark Custis

    Mark Custis Not soon. Industry Professional Forum Leader

    A switch to geo

    is all about the design and then implimentation.

    Done correctly cheap electric power at 400% beats 95% all winter long.
  3. geome

    geome Member Forum Leader

    Have you had quotes done by reputable geothermal dealers? They can provide you with a cost comparison that may be helpful to you (if you don't have this already.)
  4. engineer

    engineer Well-Known Member Industry Professional Forum Leader

    Be certain the quotes properly account for real world utility unit costs and delivered efficiencies. I'm in the process of advising a northeastern client for whom it would take a COP of 6+ for geo to pay over NG, but the economic analyses from all 3 bidders gloss right over that reality
  5. tstolze

    tstolze Member

    I have a small fairly efficient home, ~1200 sq ft, 2 ton 2 stage with desuperheater setup. My break even to pay for the complete system I figure around 15 years, no gas is available. I didn't get quotes for anything else, I wanted Geo and that was the bottom line. This is the entire system, not the cost over a standard air source HP.

    My rates are, winter ~.07 kWH for the first 750 then ~.046 after that, summer is ~.105 kWH. Our electric was averaging $130 a month before the install, my Dec. bill was $96, last Jan. and Feb were $175, $156. December's weather fell right between them two months, and we received our 10-1/2% increase since then also.

    I feel areas with cheap electric are in for many years of steady rate hikes over the next several years. Our provider, AmerenUE, just received a 10-1/2% increase last year and have filed for another 10% increase this year.

    My old unit was 16 years old and was a standard A/C with strips for heat, the tax breaks are in place, and we had the $$$ to pay for it, and I must say I am very happy with the outcome. :)
  6. moondawg

    moondawg Member

    At today's prices? What about the next 20 years?

    Since 1967 the real price of electricity has been on a downward trend (overall) while Natural Gas has been on an upward trend.
    (real natural gas prices since 1967:
    (real electricity prices since 1960:

    Especially as electric generation from renewables increase, the safe bet is that these trends continue.

    Still, 6+ COP is a pretty compelling argument.
  7. AMI Contracting

    AMI Contracting A nice Van Morrison song Industry Professional Forum Leader

    The answer might be "no it's not worth it". It is my job (when people in my area ask the same question) to show them why it is worth it and occasionally I tell them it is not a good fit for their home.
    Solicit some bids and see if geo companies offer anything compelling.
  8. engineer

    engineer Well-Known Member Industry Professional Forum Leader

    Client is looking at north of $100k for geo for a 5k SF home. One bidder used a gas price nearly double what I worked out. Another provided an operating cost analysis full of charts, tables and graphs going 25 years out. Nowhere was there mention of actual unit costs of power and gas or what rates of inflation were used.

    One game I won't play is to try to predict future rates of inflation of one fuel verses another.

    I like geo; I'd like this guy to have geo; he has 2 technically competent bids in hand, but I insist that the economic analysis be impartial and reasonably rigorous to the extent of using actual verifiable present unit that too much to ask?
  9. docjenser

    docjenser Well-Known Member Industry Professional Forum Leader

    At 13 years it is still about 8% Return on Investment annually. Not bad if the mortgage rate to finance this is between 4-5%.:eek:
  10. geome

    geome Member Forum Leader

    A good return for people that can pay cash too.
  11. engineer

    engineer Well-Known Member Industry Professional Forum Leader

    I take gentle exception to MD's assertion that renewables coming online will cut electricity costs:

    1) Many utilities and governments have adopted market-warping artificial targets for injecting extra renewable power into the generation mix. Don't infer from this that I don't favor such market interference, but it comes at a cost. As long as we are willing to spend hundreds of billions to maintain sea lanes and secure oil throughout the Mideast and are OK with tearing the tops of Appalachian mountains, fossil fuels will remain "cheaper" than renewables.

    2) The smart grid / smart initiative is NOT about finding ways to reduce your power bill. If you heat and cool your house with electricity, you will do so at the same time everyone else is doing the same thing, and the new "smart" stuff is all about sending you unpleasant price signals to discourage peak consumption. Onsite thermal storage is about the only way out of that scheme, but that isn't cheap, either.
  12. MefromMichigan

    MefromMichigan New Member

    new geo homeowner

    I envy you w/ access to natural gas and electric. As someone experiencing geo-problems, I would 100% say stick w/ natural gas. That's my "unscientific" answer for you.
  13. sunnyflies

    sunnyflies Member Forum Leader

    I'm so sorry to hear you are experiencing problems. I know that can happen and it's both frustrating and unfair, but it can also be curable. The guy who put in my system is frequently called in to straighten out geothermal systems someone else installed badly.

    I hope you will be able to find someone with the experience to cure whatever ails yours so that you can enjoy its benefits without any more problems.
  14. AMI Contracting

    AMI Contracting A nice Van Morrison song Industry Professional Forum Leader

    Geo is less expensive to operate than nat gas around us MfM.
  15. Gallagher

    Gallagher New Member

    Thanks -- would you mind telling me the price of NG in your area and also how many months people typically use heat? Our heating is on for about 4 months/year.

  16. AMI Contracting

    AMI Contracting A nice Van Morrison song Industry Professional Forum Leader

    Gas in our area (mid MI) is about $.11/cuft. Deep winter 3 months with a bumper month on either end.
    Electricity is as little as $.075/kwh
  17. docjenser

    docjenser Well-Known Member Industry Professional Forum Leader

    Introducing renewable power has resulted in 20% higher electricity costs to the consumer in Germany. Most of the subsidized solar roofs and windmills there are financed by a 20 year guarantee for a way above market rate, up the 50 cents/kwh, for electricity fed back to the grid. So almost everyone got a solar roof and a windmill, and everyone is paying the price. Not saying this is bad in order to transform over to more renewable energy, but the is no free lunch out there....
  18. engineer

    engineer Well-Known Member Industry Professional Forum Leader

    You read my mind - I was thinking about Germany as I wrote that up.

    We have a local utility serving the college town. It allows a limited number of PV feed ins at something like $0.30 per kwh. However, it charges everyone else up to $0.18 per kwh, about 50% higher than the Florida average. You get what you pay for.

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