Hello clients, it’s your old pal Bitey the sad polar bear. I am here to talk to you about stuff that is super important to me; geothermal homes and green technology!
Increasingly, environmentally conscious homeowners are looking to new products and technologies to reduce the impact of their home on the environment.
Like solar for electrical supply, geothermal heating and cooling has gained in popularity, but is it worth the upfront costs?
What follows is a breakdown that I definitely did not copy and paste from the Ontario Home Builders Website. Please read carefully because I definitely really did put some work into this.
The Math
You can use the following figures given by the “Ontario Contractor’s Association” and “Geothermal Systems LLC” – Jan 2014. Figures relate to a newly constructed single-family home; 2300 sq.ft. bungalow.
- High-efficiency gas furnace supply and install $5,500.00 – $6,500.00
- Air Conditioner $3,000.00 – $3,500
Total installed cost for standard install: $8,500.00 (low), $10,000.00 (high).
- Geothermal Heat Pump $10,000.00 – $15,000.00
- Pond Ground Loop $9,500.00 – $10,500.00
- Horizontal Ground Loop $12,000.00 – 15,000.00
- Vertical Ground Loop $19,200.00 – $25,000.00
Total installed cost of geothermal heating system: $19,500.00 (low), $40,000.00 (high).
Taking the lowest figures and calculating the difference, the cost for a geothermal heating system is about $11,000 more ($19,500 – $8,500 = $11,000).
If the difference translates to 50% annual energy savings (approx. $1,500.00), it will take nearly 7.5 years to pay for itself. Or, on the other hand, we take into consideration the highest figures and calculate the difference
Payback = ($40,000 – $10,000) / 1500 = 20 years
The simple payback of 20 years may not sway you the geothermal way. This is especially true if you learn that most utility companies use a 9-year payback as the cut-off point. The lower the payback, the higher the priority.
The Takeaways
So, on the one hand, installing a geothermal system is a 9 to 20-year commitment in terms of return on investment. This does not take into account the effect a geothermal system has on the value of your home once it’s installed. Appraisers are reporting; every $1 in annual savings achieved by using geothermal translates into $20 in increased home value. A typical natural gas heating system costs an average of $1,700.00/yr to operate and service a 2,300 sq/ft home. A geothermal system heating the same sized home costs an average of $900.00/yr. This is not totally insignificant. In this example, a geothermal system could increase the value of the home by $16,000.00 upon installation. This goes a long way in offsetting the cost of installation.
Having taken a quick look at the economics of geothermal systems, it’s worth noting that sometimes we should set economics aside. We could consider making our decisions based on what is best for the greater community. If you have the capacity to make these kinds of changes without putting your household under an undue financial strain, it’s worth at least considering.
Regardless of what you do to heat your home, don’t worry about your old pal Bitey. Oh, sure the icepack I rely on to survive is disappearing at an alarming rate. And yeah, increasingly my friends and I are foraging further south and mating with other bear species. But don’t worry we probably won’t end up creating a whole new race of super-intelligent bears bent on exacting ultra-violent revenge on humans.
Bitey Signing Off!
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