Faster Payback and Lower Emissions than Geothermal

Special Report: Propane in the Midwest

For energy-conscious homeowners living in the Midwest, where home heating and cooling comprise the bulk of a home's energy use in a typical year, a geothermal system may sound like an attractive solution to high monthly utility bills. But given the extraordinarily steep upfront cost to purchase and install a geothermal unit—not to mention the potential cost of repair and maintenance of underground components—are those monthly energy savings enough to justify the initial investment? According to the Comparative Analysis of Residential Heating Systems performed by Newport Partners the answer is no.

The Newport study, commissioned by the Propane Education & Research Council (PERC), compared the average first expense as well as the annual energy costs of 14 different heating and cooling systems on the market today. According to the study, the average closed-loop geothermal heating and cooling system (also called a ground-source heat pump or GSHP) with an electric-resistance backup for heating costs about $22,000, and $938 a year to operate. In a retrofit scenario involving the replacement of an existing forced-air system, the GSHP would require more than six years of perfect operation for the homeowner to recover the investment through fuel-cost savings alone. Compare that to a 95 AFUE propane furnace, which has a payback time of less than a year.

But isn't geothermal energy a green alternative to propane? If the measure of green is carbon dioxide (CO2) emissions, the answer is no. Although an on-site geothermal unit itself may not emit CO2, the electricity used by the pumps, fans, compressors, and backup heating element draws power from an upstream plant that produces emissions—for states in the Midwest, most likely from a coal-powered plant. The surprising conclusion, then, is that renewable systems like geothermals can be responsible for more greenhouse gas emissions than a propane-fueled system like a high-efficiency furnace.

With consumer awareness of renewable-energy systems on the rise, building pros need to be ready to explain what kind of payback homeowners are likely to expect from their heating systems, as well as what unintended consequences they may have on the environment. Click here to download the full text of the Comparative Analysis of Residential Heating Systems (PDF).


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