Author Topic: Geothermal system salesman claims paypack in 5 years  (Read 3588 times)

VirginiaBob

  • Bristles
  • ***
  • Posts: 429
    • LRJ Discounters
Geothermal system salesman claims paypack in 5 years
« on: October 23, 2014, 05:17:10 AM »
I stopped at the geothermal system salesman desk at Home Depot and he was telling me if that if I were to install a geothermal system, it would pay for itself in 5 years.  Here was his rationale:  The system costs $15,000 after assumed tax incentives and I'd save $250 a month on utility bills due to a 50% reduction in my current heating/cooling costs.  The interesting thing is that my utility bills total $120 (not just heating and cooling, but everything).  Let's say 60% of my utility bills are due to heating cooling costs = $72.  Saving 50% of that (which I doubt since I already have an efficient system) would result in $36 a month savings.  Heck, I could put that $15,000 in a 5% conservative fund and make $62.50 per month off of it. 

If I were to install a geothermal system, it would have to be for other reasons (interest in reducing my carbon footprint, etc.).  It just isn't there yet for geothermal.  Might cut into the calcs above if I were replacing an aging system anyways, but still not worth it from a money savings standpoint.

Jmoody10

  • 5 O'Clock Shadow
  • *
  • Posts: 97
Re: Geothermal system salesman claims paypack in 5 years
« Reply #1 on: October 23, 2014, 06:15:41 AM »
Like most things, you can save a huge amount by doing some/all of the work yourself. We are getting ready to install a horizontal loop system and will perform the digging and loop installations.

VirginiaBob

  • Bristles
  • ***
  • Posts: 429
    • LRJ Discounters
Re: Geothermal system salesman claims paypack in 5 years
« Reply #2 on: October 23, 2014, 07:09:27 AM »
Yea, a coworker of mine hired out one entity to do the wells, ordered the heat pump himself, set the unit in place himself, hooked up the existing ductwork, and hired another entity to do final connections, hydronics, etc.  I think the whole deal was about $9K after the tax breaks.  It was pretty optimal in how he limited his labor to simple tasks. 

On the same token though, you can get a traditional system and get it under $3K easy by doing the same steps, so the delta is still too high in my case to get reasonable payback. 

Kind of in a situation where the "Mustachian" thing to do is to take energy saving measures, so intuitively I'd think a geothermal system would be good, but since I made so many other energy saving upgrades to my house (insulation, sealing, etc. - which is a quick payback), we don't use enough energy to actually make it worth it.
« Last Edit: October 23, 2014, 08:06:42 AM by VirginiaBob »

biscuitwhomper

  • 5 O'Clock Shadow
  • *
  • Posts: 49
Re: Geothermal system salesman claims paypack in 5 years
« Reply #3 on: October 23, 2014, 07:14:28 AM »
Make sure you compare geothermal to other options.    Air-source, inverter-driven heat pumps (i.e. Mitsubishi Hyperheat and others) have gotten so good in recent years that many people are choosing them over geothermal/hydronic.     Your personal situation may not be conducive, but at least learn all the options first.

Gone Fishing

  • Magnum Stache
  • ******
  • Posts: 2801
  • So Close went fishing on April 1, 2016
    • Journal
Re: Geothermal system salesman claims paypack in 5 years
« Reply #4 on: October 23, 2014, 07:48:30 AM »
Yep, numbers lie all the time.  Just turn all the dials in the right direction, and presto, they say whatever you want! Heck, I don't know why anyone bothers to save more than 5% for retirement, all you need is 20% annual returns compounded over over your last 5 years of work or so and you're home free!

beltim

  • Magnum Stache
  • ******
  • Posts: 2964
Re: Geothermal system salesman claims paypack in 5 years
« Reply #5 on: October 23, 2014, 10:03:19 AM »
Yea, a coworker of mine hired out one entity to do the wells, ordered the heat pump himself, set the unit in place himself, hooked up the existing ductwork, and hired another entity to do final connections, hydronics, etc.  I think the whole deal was about $9K after the tax breaks.  It was pretty optimal in how he limited his labor to simple tasks. 

On the same token though, you can get a traditional system and get it under $3K easy by doing the same steps, so the delta is still too high in my case to get reasonable payback. 

Kind of in a situation where the "Mustachian" thing to do is to take energy saving measures, so intuitively I'd think a geothermal system would be good, but since I made so many other energy saving upgrades to my house (insulation, sealing, etc. - which is a quick payback), we don't use enough energy to actually make it worth it.

I've noticed a lot of times efficiency improvements aren't necessary worth it when replacing a working system, whether that's as involved as a geothermal system or as simple as replacing a working CFL bulb with an LED bulb.  The real advantages are when you have to replace a system anyway. If you compare a $9k geothermal to a $3k traditional (DIY on both), then the payback times become a lot better (the math works similarly for full installs too).

NumberCruncher

  • Pencil Stache
  • ****
  • Posts: 612
Re: Geothermal system salesman claims paypack in 5 years
« Reply #6 on: October 23, 2014, 10:12:14 AM »
So, what did you say to him? Did he give up on selling to you? :)

It's amazing there are so many green initiatives, which while good and beneficial, sometimes make people miss the point. Like recycling - recycling is generally good. What people tend to miss is "reduce" and "reuse" are way more beneficial.

VirginiaBob

  • Bristles
  • ***
  • Posts: 429
    • LRJ Discounters
Re: Geothermal system salesman claims paypack in 5 years
« Reply #7 on: October 23, 2014, 10:28:40 AM »
I told him that my utility bills were only $120 a month and he tried to work out the math again.  Before he got started, I told him that I was pressed for time and walked away.

Guses

  • Pencil Stache
  • ****
  • Posts: 915
Re: Geothermal system salesman claims paypack in 5 years
« Reply #8 on: October 23, 2014, 10:37:10 AM »
On top of that, I would assume that a significant portion of the bill is connection fees or other non consumption related items to support the infrastructure.

I pay around 30$ in connection fee each month. I can't reduce this even if consumption is 0.