Geothermal or Natural Gas for new construction in MD?

11 years ago

Hello,

I am having a new home built in the Washington, DC area. It is a two story house, 1600 sf on each floor and 1000 sf of finished space in the basement.

Our utility rates are 11.6 cents/kwh for electricity and approximately $1.15/TH for gas. I have gotten some preliminary proposals, and after tax breaks a geothermal system (2.5 ton for lower level, 2.5 ton for 2nd floor) will cost us about $10,000 more after tax breaks than a 15 SEER / 92% AFUE conventional system.

Based on the energy rates mentioned above, I would appreciate some guidance on which system might make more sense from both a financial and comfort point of view.

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Comments (6)

tigerdunes
11 years ago
I think this decision is more about one's budget and justification with a payback from less expensive operating costs from Geo HP versus a conventional nat gas/AC forced air system. As far as payback if more than 10 yrs, then I would stay conventional. But that's just me. Less than 10 yr, then one has to take a hard look at Geo.

And certainly if going conventional route, you would want at a minimum a two stage var speed nat gas furnace at least 95% efficiency.

IMO
mike_home
11 years ago
It would be helpful if you posted the details of the equipment of each system and the costs. I would also like to know the insulation values and the type of windows.

It is my understanding the Geothermal tax credit is none refundable. The refund cannot exceed the taxes you owe in 2013.
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david_cary
11 years ago
No way no how can you recoup $10k in a reasonable amount of time. I suspect it would take 20+ years.

Spend some of that $10k on insulation for the real payback.

Do you have an energy rater? When we built, it was $500+ 10 cents a sq foot for Energy star certification that included an energy audit with paybacks of different options. It also included a blower door test and duct testing.

For 4000 sqft in NC, the geo savings was $300 per year (as compared to code minimum seer 13 and 80% AFUE). Just one data point and I think the savings is probably higher.

I find the tonnage to be on the low side but your house maybe well insulated - making the geo payback even hard to imagine.

I'm not sure a 95% furnace is necessary but an audit would help. I mean spending $1000 on NG a season would be very surprising to me and then you are talking $30 difference a year.
fsq4cw
11 years ago
Despite some always saying geothermal will not pay I would suggest crunching the numbers and coming to your own conclusions. The fact remains that geothermal is currently being installed in virtually every part of the country, so others have come to a different conclusion that may be worth examining.

For your situation, a $10k differential is not necessarily a big deal if you calculate that cost over the life of a mortgage, broken down to its monthly cost against the potential monthly energy savings. All the discussion seems to be related to the cost of heating as it relates to gas. However, I would imagine that Washington DC requires a lot of A/C. At a COP-4 with geothermal, that would cost at your rate 2.9-cents per kW of cooling (or heating) required, certainly less that any other active cooling method.

Should you plan to remain in your home for 15 years or more, you will have to consider replacement cost of your gas furnace and A/C condenser at a time when a geothermal heat pump will only be at about 1/2 way through its life cycle. Will that replacement be $10k or more at a future time? Other variables to factor are tax breaks still on the table and quite attractive as well as increased resale value due to energy efficiency and green factor.

IMO

SR

Here is a link that might be useful: International Ground Source Heat Pump Association
fsq4cw
11 years ago
Despite some always saying geothermal will not pay I would suggest crunching the numbers and coming to your own conclusions. The fact remains that geothermal is currently being installed in virtually every part of the country, so others have come to a different conclusion that may be worth examining.

For your situation, a $10k differential is not necessarily a big deal if you calculate that cost over the life of a mortgage, broken down to its monthly cost against the potential monthly energy savings. All the discussion seems to be related to the cost of heating as it relates to gas. However, I would imagine that Washington DC requires a lot of A/C. At a COP-4 with geothermal, that would cost at your rate 2.9-cents per kW of cooling (or heating) required, certainly less that any other active cooling method.

Should you plan to remain in your home for 15 years or more, you will have to consider replacement cost of your gas furnace and A/C condenser at a time when a geothermal heat pump will only be at about 1/2 way through its life cycle. Will that replacement be $10k or more at a future time? Other variables to factor are tax breaks still on the table and quite attractive as well as increased resale value due to energy efficiency and green factor.

IMO

SR

Here is a link that might be useful: International Ground Source Heat Pump Association
david_cary
11 years ago
Geothermal pays back very well in lots of situations. New construction in MD would probably not be one of them.

NC 5000 sqft a/c bill is $200 a year. Geo might save $50 (our local numbers are less than 20% savinges compared to seer 15). MD is cooler. Their house is smaller. See how hard payback is to achieve on a/c? That is why the discussion has everything to do with heating.

The fact is that MD probably gets into bad COPs for a/c 5 or 6 days a year (ie over 98 degrees). The vast majority of the a/c is run at COPs over 3.

Geothermal or Natural Gas for new construction in MD?

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tigerdunes

mike_home

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