THE TRUE COST OF A GEOTHERMAL HEAT PUMP COMPARED TO A STANDARD L. P. FURNACE IN A NEW CONSTRUCTION

Geothermal provides opportunities for your customers to lower their monthly expense owning a new home.  Let’s look at a new home costing $250K with a standard heating and cooling system and upgrade the system with a geothermal heat pump.

 

True Cost of Geothermal Heat Pump Verses L.P.Gas
A Standard House with a 95% L. P.  Gas Furnace and 13 seer A/C.
Price of the new home (Note: the cost of the standard heating and cooling system 16K) $             250,000.00
Length of the Mortgage in years20
Annual interest rate5%
The monthly payment  $                  1,650.00
Estimated monthly heating and cooling cost $                      338.00
Total monthly payment $                  2,038.00
  
A standard House with a Geothermal Heat Pump System Upgrade. 
Price of the new home (Note: the cost of the standard heating and cooling system 30K) $             265,000.00
Length of the Mortgage in years20
Annual interest rate5%
The monthly payment  $                  1,749.00
Estimated monthly heating and cooling cost $                      128.00
Total monthly payment $                  1,877.00
  
Home Owner's Monthly Savings after installing Geothermal $          161.00
  
The Home Owner will receive a 30% energy tax credit on the cost of the total heating system. The system cost is 30K
The current mortgage $              265,000.00
Tax credit on $30,000 dollars of 30% applied to the princple  $                   9,000.00
New mortgage balance  $              256,000.00
Current Monthly Mortgage $                   1,749.00
The length of the mortgage is now  18.86 years  
Mortgage intrest saved $                14,776.00
  
Lets add the monthly energy savings to the current monthly mortgage 
Current monthly mortgage  $                   1,749.00
Monthly energy savings $                      161.00
New mortgage payment $                   1,910.00
The length of the mortgage is now 16.38 years 
Mortgage Interest Saved $                20,415.00
  
The True Cost of a Geothermal Heat Pump 
Geothermal System Cost $                30,000.00
Standard Heating and Cooling System cost  $                16,000.00
Geothermal System Cost difference  $                14,000.00
  
Substract the Energy tax credit  $                   9,000.00
The actual cost of the geothermal upgrade $                   5,000.00
  
Substract the energy savings for 20 years "without inflation" $                29,040.00
The True Cost of The Geothermal Upgrade is $  (24,040.00)

 

Note: Calculations are based on a 20 year example with fuel cost not increasing. If fuel cost do increase the savings will be greater.

Put together by Steve Shannon at A-1 Geothermal. 269-375-3063