Geothermal Heating Cost Case Study

When considering the Geothermal Heating Cost compared to other heating/cooling systems, there are many variables to consider. There are differences in efficiencies, fuel types, tax credits, loans, grants, and utility rebates to name a few. While all variables need to be accounted for in a complete analysis it it also important to learn which situations are the most advantageous for GSHP’s even if no extraneous credits or incentives applied. This way we are able to more quickly identify the ideal projects and pass by those where it is less advantageous.

When it all shakes out the thing we are trying to represent is the potential value of each option. The best way to do that is to estimate the life cost of each system. This life cost is defined as the installed cost, less any incentives, plus energy costs for 20 years.

For a moment lets skip past installed cost and look at energy costs over the life of a system.

Lets take a home that uses 100 million BTU per year to satisfy the heat demand. This is less than most homes in northern climates use but it provides a good reference.

The current prices for energy in Montana per 100,000 BTU delivered is a s follows:

We did not use any energy cost increases in this example for simplicity and because it is difficult to predict how each specific energy source will rise in comparison to the other sources.

In this example we can see that the propane system is way more expensive than both the natural gas system and the geothermal heating systems. Most times when people are considering a propane system it is because natural gas is not available. Therefore, it makes sense to compare the propane system and natural gas system to the geothermal heating system but not to each other.

GSHP energy savings over propane = $45,400

GSHP energy savings over natural gas = $4,600

Now lets consider the possible installed costs associated with each system.

Propane Comparison

Natural Gas Comparison

From these two examples we can learn where to look for good applications of GSHP systems.

Roughly defined, propane systems that have high energy demands and are possible open source systems represent the best applications from an economic stand point. Natural gas fueled homes that have low energy demands and would require closed loop vertical systems represent the worst applications from an economic standoff point.

About Taylor Hendricksen

I'm a Web Designer and Developer at my company, Hendricksen Design. I love renewable energy, building things, macs, skiing and garlic.

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