One afternoon in mid-March, I came home from work. It seemed like any other afternoon, except for the fact that the house felt a bit chilly. I went to check out the thermostat and saw that the temperature in the house was in the mid-60s, even though the thermostat was set to 70 for that time of day. When I went down to the basement, I discovered the issue. The furnace had died. Ouch.
What I didn’t realize at the time was that this was the beginning of an interesting, but complex journey. The day after the furnace died, we met with our HVAC company. It seemed like we basically had three options:
- Replace our gas furnace with a new Energy Star gas furnace (around $10k installed)
- Replace our gas furnace with an Energy Star hybrid electric heat pump/gas furnace (around $12k installed)
- Replace our gas furnace with an Energy Star electric heat pump geothermal system (around $25k installed)
Before I get into the logic we used to make our decision, let me preface it by saying that I’m not a huge fan of natural gas. Before our furnace died, we had only two items in our house powered by natural gas (furnace and water heater). Our long term plan had always been to convert the house entirely over to electric, with the hope of offsetting our power grid consumption with solar panels and/or wind turbines at some point down the road when it is economically feasible to do so. Now that the furnace had died, it seemed like a good time to investigate replacing it with a solution that required no natural gas at all.
Unfortunately, at first glance, the price of the geothermal system seems like a non-starter. But let’s think about it for a minute and break it down. Since our furnace had broken, we would have had to fork over at least $10k anyway, regardless of which option we chose. So, that brings the additional cost for the geothermal to $15k over the replacement gas furnace. Now, let’s also factor in that the compressor outside of our house (that creates cool air for air conditioning in the summer) is also a relic of the past. If that were to die, we would have to replace that at a cost of roughly $5k installed. So now, the difference in price falls to $10k. Lucky for us (as lucky as you can hope for when you have to shell out this kind of money), about three weeks before our furnace died, President Obama signed the stimulus bill. That bill gives a tax credit (credit, not deduction) for 30% of the cost of the system, with no limit on the credit amount. Let’s do the math: 30% of $25k = $7,500. That brings the difference in price down to $2,500. Considering we should save about $1000 per year in utility bills, we should be able to pay for the system in less than three years.
Now that we could stomach the cost, we realized that we would be able to accomplish several things:
- Install a state of the art geothermal system that will keep us warm in the winter and cool in the summer while uses a relatively small amount of energy.
- Do the right thing environmentally. It’s nice to do the right thing, but realistically, before the stimulus bill was signed, it would have been very difficult to justify.
- Improve our home with an HVAC system that would be a major selling point if we were to sell our home in the future.
In the next portion of this series, I’ll discuss how the geothermal system works and what type of logistics/coordination was required leading up to the install.
About the author:
Josh Goldfarb is the President of NetflowData LLC, a cyber security and network traffic analysis consulting firm. He resides in Silver Spring, MD.