Oil Boiler vs Geothermal Heating System

[wanderingdomer]

I'm looking for feedback about installing an oil boiler versus a geothermal system, as our oil boiler is toast.  We live in a 2600 ft2 log home in southeastern PA, about 20 years old, relatively windy as it's in the middle of a field.  During the winter of 2014-2015, we used 1,000 gallons of #2 heating oil, and that was keeping the thermostat at 58-62 degrees.  There were a couple times during single digit weather where the oil boiler (something like 125K BTUs) couldn't keep the house above 56 degrees (even with the thermostat set higher)--the house is horribly insulated.  Log homes in PA didn't have to adhere to normal insulation codes, so the 6" log walls are about R7, the 4" insulation in the roof is maybe R15.   There are two 275 gallon oil tanks in the basement. 

The (dead) boiler is hooked up to an upstairs air handler and downstairs air handler.  The current ductwork is not really big enough for a single whole house (air or geothermal) heat pump that'd be big enough to heat the whole house.  There's no central air, but that's not really a concern (nice to have, perhaps nice to advertise if we sold the place in 10 years).  We refinished the outside logs this past summer and fall, and are half-way done with chinking the outside logs.  It will need a new roof within 2-3 years, and I intend to add at least 4" of polyiso insulation to bring the roof closer to a reasonable amount of insulation.  There is no insulation on the basement walls, about 40% of which is above grade.  We have a large wood-burning fireplace insert that's rated for a 2500 ft2 place--it kept the pipes from freezing when we had 0 degree temperatures a few weeks ago.  We envisioned this insert as helping to reduce the oil usage by about half (oil's currently $1.36/gallon) when the price of oil rises again.  Our water heater is electric--looks like it used to be hooked up to the boiler, but the water is slightly hard, so possibly they didn't want to wear out the boiler with water heating. 

There is no natural gas within miles.  For the oil boiler, we have quotes between $7,800 and $10,000, depending on model, estimated to last 20 years, costing about $2500/yr to run at $2/gallon oil and using standard electric for hot water.  If we used wood for about half our heating, this should bring yearly heating down to about $1,750/yr.  A conventional heat pump would cost about the some as a boiler, but would cost as much to run--a boiler was suggested as a back-up anyway.  A large "high efficiency" air-source heat pump (good down to the single digits) would require additional ductwork and cost about $19,000, costing about $1,500/year to run, estimated to last 15-20 years.  This got me looking into geothermal.  We ended up with a quote for $34,500 (+$1,500-3,000 for electrical work) for geothermal, which amounts to about $26,000 after the federal tax credit (includes hot water heating and the electrical work), for a two unit x 3 ton system (one for upstairs, one for downstairs), closed system with vertical loops drilled.   This should end up costing about $1,250/year to run a geothermal heating system, the units should last about 25 years and the loops longer than I'll be around this earth.

If we move in 10 years, if oil is at about $2.50/gallon, and we use 1/2 wood heat, we'd be about $8,000 in the hole for geothermal, $11,000 if heating oil is $2/gallon.  Break-even for geothermal versus a boiler only (no wood, $2.50/gallon) is 12.5 years, 19 years for half wood/half $2.50/gallon oil, and 24.5 years for half wood/half $2/gallon oil.  I tried to look into whether buyers would pay a bit more for a heating system with cheaper heating bills (I certainly would for my next home), but it might not be a big selling point.  There is also a chance that we wouldn't move, or we'd hold onto the place and rent it out.  Although the electricity for geothermal may use non-renewable resources, I like not burning oil to heat my home. 

Your thoughts/advice would be appreciated.

[wanderingdomer]

Sorry, I meant to post this in the "Ask A Mustachian" section.  This is my first post and I'm going to try to move it there.

[trammatic]

Also a Pennsylvanian, we live in Gettysburg and have a geothermal system.  Ours was installed when we bought the house, and was definitely a selling point.  With the poor insulation you're talking about, it would probably also have trouble keeping up with your usage.  That being said, heating oil is very cheap now.  Between 2011 and 2014, prices didn't drop below $3.50/gallon, with it often being closer to $4.  That would give you much closer to the 10 year payback.  Geothermal also provides AC, if needed, and can heat your hot water, especially in the summer.

You mentioned living in the middle of a field.  Do you have enough property to do a horizontal geo field?  It would probably be much cheaper than the vertical one you were quoted...

Good luck!

[former player]

Also, can you grow a shelter belt?  Cutting down on windchill would help.

[paddedhat]

Might seem odd, but have you thought about propane?  I live about an hour north of you. I built a large ranch for a buddy, a few years back. He had an Amish outfit install a giant above ground tank, that's big enough to handle the house for over a year. He owns the tank, it's not a rental, or tied to any one supplier. He waits until the dead of summer to call a handful of suppliers for quotes. When everybody was paying $4 for heating oil, he filled his tank for $1.69 a gallon. Lately, it's been a lot less. Obviously, this covers his heating, water heater and dryer, so there are significant electrical savings as well.

My other thought is that I would get the chinking and roof insulation finished ASAP, as I believe both will make a massive difference n both fuel consumption and comfort levels in the house.  I spent a long career as a homebuilder, and always admired log homes from a distance. Your experience is just another one of countless I have heard and read about the downsides of log ownership. The biggest log home builder in my area lives just down the street, in a log trophy house he uses as a model. I asked if he would build one for himself once he retires. He just smiled and said that now he know better. Recently I ran into another contractor who had spent months in the area. He specialized in log repair and refinishing. He also told me that's there is good money in fixing them, but he wouldn't want one for himself. That said, I still love them, but wow, they can be a real PITA. 
 My recently built home is located right in the middle of the ski resorts in the Poconos. It's a new low cost, traditional stick built place, roughly 1/2 the size of yours. It's 100% electric, and my total utility costs appear to be a bit more than a 1/4 of your fuel bill. This included keeping the place at 72 in the winter and running the AC in the summer.