3. How Geothermal Heat Works

Geothermal heat is 350% efficient because it pumps a coolant underground and uses the earth to warm it to about 60 degrees. The warmed coolant transfers heat from the earth to a refrigerant within the heat pump. (It’s referred to as a heat pump rather than a furnace, as it doesn’t produce heat, only transfers it.) The first question I had was “How can 60 degree coolant heat a home to 70 degrees?”

The temperature of the gas refrigerant is manipulated through compression and expansion. The gas is compressed to raise its temperature, and is then pumped through an air coil to transfer heat to the air that is circulated through the ductwork. After it transfers its heat, the refrigerant leaves the air coil in its liquid state and is exposed to the coolant pumped through the buried pipes, adding heat to the system. The cycle repeats itself, compressing the warmed refrigerant and pumping it through the air coil. Reversing the flow of the refrigerant and cooling it through expansion provides cool air to the house.

The system uses the following components:

R-410a refrigerant in a closed loop within the heat pump

• This refrigerant is continuously cycled between its liquid and gaseous states
• The boiling point of this refrigerant is –40 degrees. The boiling point rises as the pressure and temperature rise. Cycling between its liquid and gaseous states increases the heat transferred in the air coil.
• This refrigerant is environment friendly and will not deplete the ozone layer in the event of a leak

Coolant pumped through a closed loop of buried pipes to transfer heat from or to the earth (some systems cycle ground water through an open loop)

• During the winter, the coolant transfers heat from the ground to the refrigerant to convert it to a gas
• During the summer, the coolant is used to cool the refrigerant and transfers heat from the system to the earth
• This coolant is environment friendly and will completely decompose within three days in the event of a leak
  A compressor to increase the temperature of the refrigerant by compressing it (or decrease the temperature by expanding it) while in its gaseous state

An air coil to transfer heat between the refrigerant and the air pumped through the ductwork

• During the winter, the refrigerant is pumped through the air coil as a gas and is cooled back to its liquid state by the air circulated through the ducts. (The air is warmed to about 180 degrees in this process.)
• During the summer, the refrigerant is pumped through the air coil, where it cools the air circulated through the ducts
• The warmed refrigerant is cooled by the coolant in the buried pipes. (The air is cooled to about 45 degrees in this process.)

A bank of electric heating elements to provide additional heat in the event that the heat pump can’t produce hot air fast enough.

• These elements are turned on if the house is about 3 degrees or more below the thermostat setting, and cycle off as soon as the house is warmed within one to two degrees of the thermostat setting.
  

2. Options

(Despite my best efforts the data tables remain difficult to read. I have tried posting using html, separating cells by tab and separating by characters with little success. I have tried to summarize the information following the tables.)

Return on investment is different for each house. The amount of energy required is different due to the size of the home and how well it is insulated. The cost of installation also varies. In our case, the geothermal system included the additional expense of installation of ductwork but eliminated the need to reline the chimney. The other systems could have been tied into the existing supply lines for the radiant heat, but the chimney would have to be relined. To help us decide on our heating system, we compared the installation and operating costs of the different systems over a ten-year period.

To make a fair comparison of the costs for the different types of fuel, it’s necessary to determine how much of each fuel needs to be purchased by converting its energy value to BTUs.

We used 2,030 gallons of fuel oil for the winter of 2007-2008. The number of BTUs purchased is calculated by the formula:
2,030 Gallons x 140,000 BTUs/Gallon = 284,200,000 BTUs

This is higher than the number of BTUs actually required to heat our home because our oil burner is less than 100% efficient. The baseline needed to use for comparison is the number of BTUs used to heat our home, which is calculated by the formula:
2,030 Gallons x 140,000 BTUs/Gallon x 70% Efficiency = 198,940,000 BTUs

The table below displays the cost to purchase this number of BTUs for different types of fuel:

BTUs Source BTUs/Unit Cost/Unit Efficiency Expense*
198,940,000 Fuel Oil 140,000 $3.25 70% $7,511.00
198,940,000 Fuel Oil 140,000 $3.70 90% $5,841.89
198,940,000 Propane 91,500 $2.48 90% $5,988.73
198,940,000 Nat Gas 100,000 $1.28 90% $2,829.37
198,940,000 Electricity 3,412 $0.09 350% $1,499.30

*Expense = (BTUs x Cost/Unit) / (BTUs/Unit x Efficiency)

The table below displays the cost of installation and 10 years of operation for the different systems:
Geothermal Natural Gas Propane Fuel Oil
Installation $32,400 $5,000 $5,000 $5,000
Reline chimney $3,000 $3,000 $3,000
False chimney $1,200
Connection $300
Interest $7,750
Sub Total $41,350 $8,300 $8,000 $8,000
Operation (1st year) $1,500 $2,830 $5,989 $5,846
10 years operation $18,009 $33,977 $71,901 $70,140
Total $59,359 $42,277 $79,901 $77,140
Years to Break Even NA 18 7 7

Notes:

• Costs of operation for geothermal heat excludes the costs associated with air conditioning and hot water, as these benefits are not a part of the other systems
• Costs for a false chimney is a guess at this time (I will update later after I receive a bid)
• Connection costs for natural gas is a guess
• With a 90% efficiency rating, it would be necessary to purchase only 1,580 gallons of fuel oil (down from 2,030 gallons)
• $3.70 per gallon was used as the price for fuel oil because that was the last price I was quoted (a later check showed the price had risen again to $3.789 per gallon in May 2008)
• Assumed a 4% inflation rate for all fuel types
  
• If the rate of inflation for fuel oil matches the average rate of 13% over the last 9 years, the total cost for the oil burner system would be $114,608 over the next ten years and the break even point would be just 6 years
  
• Fluctuations in the cost of natural gas is less predictable because the price is more supply based than a steady trend in inflation (at least in the past)
  

Natural gas turned out to have the lowest cost for the ten-year period. We still chose geothermal for the following reasons (in the approximate order of importance to us):

• At this time, the city does not have natural gas service
• The break even point between natural gas and geothermal for our home is 18 years – we expect to live here for at least that long
• Geothermal heat will provide us with a central air conditioning system and will meet some of our hot water needs
• It is the right choice environmentally and we want to move away from fossil fuels
• The energy costs and the loan payments will be less than our historical cost of fuel oil, leaving us with more cash even if we do not maximize our savings over the initial ten-year period
• It should be a good selling point for the house when it’s time

In any case, we are confident the geothermal system will prove to be a good long term investment for us.

1. Introduction

We own a large, old, energy inefficient home in central Minnesota. Since moving here in August 1999 the cost of home heating oil has nearly quadrupled, from $0.84⁹ to $3.23⁹ per gallon in February 2008. (I recently heard some people paid $3.69⁹ per gallon in March 2008.) With our current heating system in need of replacement, we recently took a hard look at all of our options hoping to find a solution that would have an impact on our energy use and costs.

Our choices came down to installing a high efficiency oil burner and hoping oil prices would stop going up, waiting to see if the city opted for natural gas in the fall of 2008, or committing to installing a geothermal system (see a future posting titled Options for details.) We felt our best option was to go geothermal.

I started gathering information on geothermal heat in 2006. I was doubtful we would be able to convert as our home used radiant heat and geothermal could only heat the water to 110 degrees (our oil burner heats it to between 140 and 180 degrees.) I was unwilling to damage the walls or woodwork or to have the ductwork visible, so converting seemed unlikely. By fall of 2006 our oil burner was beginning to leak water – too slow to require immediate replacement but we knew its days were numbered. In February of 2008, I talked to Brian, the owner of Albany Heating (http://www.albanyheat.com/), about how we could install geothermal heat. The challenge was to get ductwork to the second floor. If we could run ductwork through the chimney venting the oil burner, our problem would be solved. However, the inside measurements of the chimney were only 12x12 and the minimum size needed was 16x20. Brian suggested that by removing the chimney entirely we would be able to create a space approximately 20x20 – more than was needed for the ductwork.

I didn’t immediately embrace the idea of removing the chimney. Removal would create an opening in the aluminum roof we had installed the previous summer, and my philosophy is to avoid making major changes to the existing structure. I contacted Terry from Pogatchnik Building Restoration to see if there was any way to save the chimney above the roofline. It was about a week before Terry had an opportunity to look at the chimney. He felt that bracing could be installed, but that sagging would occur within a few years. He suggested we instead install a false chimney using plywood and a brick veneer to retain the original look. By this time, I was over my mourning period and was able to let the chimney go. The decision on whether to install a false chimney or to cover the opening with aluminum shingles will wait until late summer.

Brian’s original estimate to install a geothermal system was $34,500 and involved drilling two 180 foot wells. Brian investigated the option of directional boring in place of drilling wells, and came back with a revised estimate of $32,400. The next morning we received additional encouragement to convert. We received a delivery of fuel oil to replace what had been burned in the previous four weeks – at a cost of $1,295.60. We suspected Brian placed the order after delivering the estimate, but he denied it.

For me, the decision to convert to geothermal was largely financial. It is cheaper to install a new heating system than to continue to burn fuel oil, even under the assumption that oil prices will stabilize (not likely!). However, the opportunity to reduce oil consumption by more than 1600 gallons per year was also a strong incentive. Converting to green energy is the right thing to do, but likely won’t happen until clean energy is as cost effective as continuing to use oil. This is one case where the return on investment justifies the upfront expense.

Future postings will include:

• Options: Details of operating and installation costs for our different options
• Specifications: Specs on the system we chose
• Directional Boring
• Chimney Removal
• Decommissioning of Old System
• Ductwork Installation
• Furnace Installation
• Desuper Water Heater
• Taxes/Rebates
• History of Energy Expenses
• Previous Owners' Efforts at Reducing Heating Expense