Going Geothermal

Over the next few months I’ll reserve some blog entries for a project we’re planning to undertake this June – to switch our heating source from fuel oil to geothermal.   When the installation takes place I’ll describe it, and then later blog about the efficacy and savings from the switch.   Today I’ll describe our plans.

The work will be done in early June, and have two stages.  First the well drillers will come and increase the depth of our current well.   If the water flow doesn’t increase then the depth of the well, currently 360 feet, will have to be expanded to 800 feet.  If water flow increases or they figure out a way to bleed the flow (in the coldest temperatures this would be about 10% of the water) the price and depth of the well might be a bit less.   This kind of system works well in Maine, though in most of the country water tables are too deep for a standing column well to make sense (a slightly more expensive to operate loop system is used in those cases).   The water will be pumped in to the heat exchange pump and then returned to the well.   We will continue to receive our domestic water supply from the well.

Once the well drillers get their work done, the heating people come to install the unit.  The heat pump will be in the basement near the current oil tank and well water entry point.    The heat will be transferred up to the attic where all the fans and the ductwork will be located, ready to send heat to the house.   The heat pump will be a five ton unit.   Apparently unlike most forced air systems geothermal heat is low air flow, meaning that the temperature remains constant, but doesn’t rapidly decrease or increase on demand.

The total cost will be near $40,000, though after tax credits that should be just under $30,000.   At today’s fuel prices that could pay for itself in less than ten years.   Even if oil goes back down it will eventually save more than its cost — and I’m sure we haven’t seen the last oil price spike!   Moreover, it will significantly cut down on our green house gas emissions.

The cost would have been less if the house had been designed with geothermal (it was completed in 2006).   Currently it is a baseboard heating system and will require a retrofit to a forced air system.   Our house has about 3400 square feet of heated space.  It’s a ranch with a finished basement.  The basement creates a problem for a retrofit because there isn’t room in the ceiling for duct work.   Instead they’ll creatively work through closests to get a number of ducts sending heat to the basement in winter.  It likely won’t do the whole job so on the coldest days we may burn some oil.   Moreover, while it will help heat water (especially in summer) much of our domestic hot water will also come from our oil burner.  Still, the cost savings should be significant.   Moreover, it will give us air conditioning in the summer — we have no air conditioning system at this time (not even window units), so that’ll be nice.   Maine doesn’t get too hot in summer, but there are always weeks where it gets intense, and it’s often too hot to cook indoors.  It’ll be nice to have AC!

The decision to do this isn’t taken lightly.  It is a major up front cost.   Its a no brainer given tax credits to do this on new construction — but a retrofit is much more expensive (not to mention that in buying the houses we paid for the current system, now destined for back up duty).    Moreover, we made this decision last November, when oil prices were low.   My thinking was that oil prices were not going to stay low, and once they rose again when the world economy picked up, changing our system would be more expensive and there would be a longer wait (as it was our wait was simply to avoid having to have the well work done in the winter).

You see, I’ve had this knack of being right about trends.   I argued back around 2000 that the dollar would end up significantly lower in value vis-a-vis the Euro, and wished I could buy a large chunk of Euros as an investment.   I was right — but had no excess money to buy Euros.  I was warning my classes about al qaeda in the 90s, and talking about the coming housing bubble recession by 2005.   During the 1998 dot com boom I told classes “there hasn’t been so much optimism since 1998.”  Yet I did nothing to personally profit from my predictive ability, except to shift my retirement account to safer investments.

Lately I’ve become convinced that large oil price increases are on the horizon.   All that can prevent it is a mix of increased domestic oil drilling, a shift towards oil sands, and a large increase in alternative energy use.  All of this will happen — reality and markets force change whether people like it or not — but it appears likely to be a very difficult transition which could see a sustained period of very expensive oil.   While I doubt the absolute gloom and doom of the peak oil folk is right — I have a bit more faith in our ability to innovate, adapt and react — I also am skeptical of the ‘it’ll be a slow easy transition’ folk.   So rather than risk being right again but having done nothing to prepare myself, I pushed hard for us to make the decision to take the economic plunge.  I’m teaching overload courses to help pay for this, and unless something unexpected comes up, we’re going to do it.

It will feel good too to think I’m doing something about both foreign oil dependence and global warming.   So if all goes according to plan, I’ll blog about this topic again in early June when the work is underway!

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  1. #1 by modestypress on April 20, 2011 - 20:52

    but it appears likely to be a very difficult transition which could see a sustained period of very expensive oil.

    I think this is what is called “understatement.”

    Yet I did nothing to personally profit from my predictive ability, except to shift my retirement account to safer investments.

    If my blog, which suggests we are on the verge of the collapse of civilization, is correct, then perhaps your action will help you survive. Which again puts you into the understatement category. On the other hand, everything may continue as it has, except more so.

    Anyway, good post and I hope your project works out well for you.

    • #2 by Scott Erb on April 24, 2011 - 15:02

      Thanks. I agree that some scenarios predicting civilizational collapse are in the realm of the possible — that’s a bit scary! Ironically the comforting factor is the level of uncertainty — no one knows for sure where this is going. People are so used to normalcy they can’t imagine things falling apart. But history shows us great civilizations have always fallen sooner or later. We live in interesting times.

  2. #3 by Titfortat on April 22, 2011 - 12:31

    Yep, I wish I had invested in trojan condoms pre 1980 and the aids crisis. I would have been rich. 😉

  3. #4 by pino on April 23, 2011 - 16:05

    Over the next few months I’ll reserve some blog entries for a project we’re planning to undertake this June – to switch our heating source from fuel oil to geothermal. When the installation takes place I’ll describe it, and then later blog about the efficacy and savings from the switch. Today I’ll describe our plans.

    This is great!

    Keep us informed, I’m very interested in this type of thing. Of course I’m in it more for the dollar savings and feeling of independence than I am for the greenie stuff, but in the end, it drives us to the same finish.

    We have decided that we are going to stay in our house and not move. As such, the projects I’ve been listing are going to start getting done. Some will involve things like a tankless water heater and perhaps some small solar cells. I would LOVE to go geothermal!

    Good luck.

    • #5 by Scott Erb on April 24, 2011 - 15:00

      Yes, the economics of it are what drive me, but it’s not a bad thing to help the environment! TIME had an interesting bit on natural gas fields from shale. If natural gas production increases that should help keep local electricity reasonable (at least here our power stations use natural gas), which helps for something like geothermal. We looked into solar cells for the domestic hot water supply, but that didn’t compare well with geothermal. I’ll definitely give updates as the project moves forward.

      • #6 by pino on April 24, 2011 - 23:27

        Yes, the economics of it are what drive me,

        So I don’t really wanna get into a political discussion on this more personal post but……

        So, given you think the economics have to be right in order for you to pull the trigger, do you agree that we shouldn’t subsidize the same technology or concepts [green energy] when THEY don’t make sense economically?

  4. #7 by renaissanceguy on April 23, 2011 - 23:03

    It is an excellent and worthwhile project. Good for you! Isn’t it great that you have the means to do it?

  5. #8 by Scott Erb on April 24, 2011 - 23:37

    The reason to subsidize new technology is to get it economically viable. Any new technology starts out expensive and then the cost declines. The fear with new energy technologies is that the transition time will be too high if we don’t get a head start. Government subsidies built the economic success stories of Asia (Japan, Korea, Taiwan, etc.) and to a lesser extent Germany. Once the technology is market viable, subsidies subside.

    In general, I prefer no subsidies, but in the case of energy it makes sense because the consequence of not being prepared for a massive oil shock is so high (that’s also why I support more domestic oil production and shale natural gas — I have no ideological sacred cows here). The dangers of global warming are also great.

    However, if economic viability is not possible, then subsidies are misguided. It only is worth it if it is an investment in economic growth, not a long term government support program.

    A case in point: the EU has met Kyoto protocol standards in part by subsidizing green technologies massively. Now they are market viable and they could end up making a lot of money in the Chinese market since China wants to start being greener.

    • #9 by pino on April 25, 2011 - 01:09

      The reason to subsidize new technology is to get it economically viable. Any new technology starts out expensive and then the cost declines.

      The problem is, this doesn’t crate the best economic incentives. What if, for example, the subsidized technology isn’t a good one? Think ethanol. Then we get more and more of a product no one wants to buy at virtually any price. PLUS we get the negative side effects: plowed down rain forests and hunger.

      However, if economic viability is not possible, then subsidies are misguided. It only is worth it if it is an investment in economic growth, not a long term government support program.

      Good to see.

      • #10 by Scott Erb on April 25, 2011 - 02:54

        I agree — subsidies for bad products (usually the result of political favoritism) do more harm than good. In general subsidies should be avoided. They did build huge economic success stories in Asia, Japan’s MITI was like a post-War Japanese “General staff” plotting economic conquest! But that would not have worked if the US had retaliated. The US wanted Japan, South Korea and other states to succeed.

  6. #11 by brucetheeconomist on May 1, 2011 - 03:48

    When you said geothermal I thought of hot springs that I thought were unusual in Main.

    Ground source heat pumps is I think the same things, and it sounds like a great project.

    It’ll also produce efficient air conditioning, thought that likely isn’t used much as far north as you are.

  1. Green Tour 11 « Pressing Pause

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