Saturday, October 06, 2007

Geothermal Analysis: How's it Working (Part 2)?

From the last two posts, we know we have saved on the amount of heating oil we use with geothermal heat pump installation, but we are using a lot more electricity. One lingering question is "Are we saving any money by switching to the heat pumps or did we just change energy sources?"

Before starting with the calculation, it is important to remember the goal, namely, we wish to reduce dependence on foreign energy sources (particularly oil, but also natural gas), and to do it in a manner that helps (or is at least neutral) environmentally. In a world with uncertain oil geopolitics, it is important to consider that a big part of this process is buying insurance, and traditionally, insurance costs more than it is worth (otherwise, insurance companies wouldn't be in existence).

In our particular case, it turns out we aren't saving much money by moving to geothermal from heating oil, so it is win-win-draw: our dependence is reduced, the environment is bettered, but little savings have accrued (or, at least not yet). There are many reasons for this, and if planned properly, I don't think that this has to be the case.

This post has some technical details in it, and they are included for clarity (hopefully) and for helping others make similar calculations. There is a lot of uncertainty in some of the crucial numbers, so the actual numbers may be different. If you spot any errors, please let me know, for I'm more interested in getting to the truth than I am in advocating a position.

Let's recall two graphs from the last two posts: (1) the heating oil use, and (2) the electric use. Also, to beat a dead horse, the house was renovated from late 2005 to mid-2006. There are a lot of moving parts in all of this, and that introduces more uncertainty than one would like.

System Cost

The total cost to install the 3 wells and the heat pumps was $44,800. To break this down, it was $32,410 for the heat pumps and new air handler, $15,390 for the 3 wells, and we received a $3000 rebate from CL&P. However, we did not install air conditioners, which I estimate would have cost $15,000 for high efficiency condensers. The incremental cost is then $29,800. This cost could be bettered if one plans for geothermal initially instead of making a decision half-way through the process of renovation, but okay, enough self-flagellation.

The Quick Guestimate

It helps to have a so-called back-of-the-envelope number that is easy to calculate. Here is my version of that. In the older house, for the winter months (Nov-Mar), we'd use between 1500 and 2000 gallons of heating oil. With 2 gallons/day for water heating (I'm still amazed it is that much and am kicking myself for not making sure the de-superheater came with the geothermal unit), and adjusting for the number of days, we can roughly say between 1200 and 1800 gallons were used to heat the house. Last year we used 700, with about 280 for water heating (from 11/17/06 to 4/9/07), and so we used 420 gallons to space-heat. In this simple comparison, we saved between 780 and 1380 gallons of heating oil, or about $1850-$3300. (Heating oil last year was $2.39/gallon).

For power, we used to use between 50-60 KWH per day and we now use around 120 KWH per day in the winter months. In the old house, we used fewer lights, but we used more electric space heating. Let's say net-net the effects cancel, and we are using about 60 KWH per day heating, or about 8600 KWH in the same period we used the 700 heating oil gallons last winter. At $.18/KWH (one of the highest rates in the Continental USA), that cost us $1548, so it is about $300 - $1700 saved from the geothermal, so according to this quick calculation, we made somewhere between 1-6% return on investment. Can we better the estimate? Let's try.

A More Detailed Estimate

To make some the conversions below, I used the EIA kid's page

A more detailed review of the electricity usage makes me conclude that over the period of 11/17/2006 to 4/9/2007 (the period in which we used 480 gallons of heating oil for space heat), we used between 8360 and 9430 KWH for operating the heat pumps These numbers are still suspect and requires some subjective guessing, which I won't get into right now. With some effort, I think I can separate out the heating from the other electric use, but that will take a lot of work.

Let's calculate the amount of oil saved not by looking at past years, but by looking at how the heat pumps work. The heat pumps have a coefficient of performance of 3.5-3.6. That means that for every unit of energy used to run the heat pumps, we get about 3.5 units of thermal energy out. So, our 8360 KWH turns into 25,080 KWH thermal energy, and converting that to BTUs, we get (using 3412 BTU/KWH) 100 million BTUs. One gallon of heating oil contains, roughly, 139,000 BTUs of energy, and let's assume our boiler is 85% efficient as advertised.

Combining all this together, I get between 845 and 953 gallons of heating oil saved, or between $2020 and $2280 last year. At an electricity cost of between $1548 and $1697, we only saved between $470 and $583, or 2% of our installation cost. At that rate, we are looking at 50 years for this to pay for itself in its present state.

Here enters yet another uncertainty in the calculation. How much did we save in cooling costs? The geothermal is very efficient and would be better than the air conditioners that we would have installed--even very efficient ones. How much savings would that translate into? The hard-core green people would say none, because we are using more electricity cooling the house now than we did before. For the moment, I'll assume no savings.

This coming heating season, the savings look a little better. Heating oil now costs about $2.70/gallon, and electricity has come down to $.17/KWH. If these values stay the same, then we are looking at savings of $850-$950, and that would make the return a not much better 3%. I think we'll do better, but that is because of other things we are doing (details in a later post).

Where would geothermal work best? It seems to me that the Northeast is not the best spot, primarily due to the electricity cost. Note that if the power cost was down to $.10-.12 per KWH, then our return would climb to 4% at the same heating oil cost, and given current interest rates, that makes it a decent-enough long term investment (the 4% is an after-tax equivalent on a long-term investment). In essence, our geothermal is a bet on the heating oil/electricity spread. If electricity costs are cheap and heating costs are high, geothermal makes more sense. This could happen if indeed the dollar keeps plummeting. The bulk of our oil is imported, but the bulk of our electricity is domestic and is based on nuclear and coal and not oil.


I'm a little ambivalent about our move to geothermal. On the one hand, I'm glad we did it, for we are using two-thirds less heating oil, but on the other, I wish we had planned a little better, for better planning would have saved us a little more money, and I also don't like what happened to our electricity usage. It did buy us some insurance though, for we are now less dependent upon foreign sources for our survival (and heat is necessary for survival!), and it did make the world a little greener and one step closer to something we could call sustainable. Perhaps that's worth the extra cost (and probably better than sending the Sierra Club a check for $10,000), but if geothermal or something similar is to become widespread, it will have to be a little more cost-effective.

Friday, October 05, 2007

Our Electricity Use Over the Years

In order to assess both how the solar panels and the geothermal heating and cooling have impacted our energy usage, we need to understand our electricity use. The first step in doing so is finding out how much we have used historically. The recent past data can be obtained from the power company. Connecticut Light & Power keeps the last 2 years' data online for easy access, but we have more.

While digging through old boxes full of bills looking for heating oil invoices, I also collected the electricity bills and cross-checked them with old check registers. As a result, a history of our usage from the time we moved into our house until present has been compiled, and it is given in the first figure.

The red line shows, according to Connecticut Light and Power, how much energy we pulled from the grid, and the blue line shows how much we have used. The difference is the amount we generated from our solar panels since May, 2006. The amount generated doesn't look like much, and compared to what we now use, it isn't, but the details deserve its own discussion, and now is not the time.

There is a lot of structure in this plot that needs to be explained. The big drop in usage from late 2006 to May, 2006 is the renovation phase. We moved out of the house in this period, and the amount shown is what was used during the reconstruction.

Again, we have to divide the house into two periods: (1) the old house (2000-2005), and the newly renovated house (May, 2006 to present). Let's look at the old house first.

Interestingly, our electric usage peaks in the winter and not in the summer as the national and regional power does. The reasons for this are many, namely we didn't have central air, we had one room that was fully electric heat, and we used a couple of small space heaters in some of our draftier rooms. Although the summer usage was lower, a small summer peak is present in the data, and it got bigger from 2001 to 2005, because over that time we purchased more window air conditioner units. 2005 was also a particularly hot summer (next figure).

The big spike in our electricity use starts in November, 2006 with the turning on of the geothermal heat pumps. Clearly our electric use has gone up significantly, but as the last post showed, our heating oil demand decreased significantly. So which one has won out? The newer system is more efficient, but by how much, we still have to estimate. I'll get into the details in the next post, but before that, this part cannot end without showing the energy use versus the average temperature, and that is given in the next figure.

There are four main groups in this plot. The lower purple circles are during the construction phase and can thus be ignored. The blue dots are prior to the renovation, and the red dots are after. The four red dots falling below and to the right of the others are from the brief period where we had a new house, but the central air wasn't in, for we were awaiting the completion of the geothermal system. We had our four window air conditioners going full blast during this period, and interestingly enough, the data match up pretty well with the old house in the 2005 period (the dots hotter than 60 degrees closest to the lower four red dots). The house was not at all comfortable in this period, and needless to say, the final completion of the geothermal was welcome indeed, even though it came too late for the 2006 cooling season.

There is a lot of scatter in the blue data, and there are a couple of reasons for that. The first is that electricity demand is a combination of heating and lighting, and it is when the days are shorter that they are generally also colder. Part of the demand is for lighting, and de-tangling the two effects may not be possible. Other contributing factors are guests and vacations, and these effects have not been taken out. A final factor adding to the scatter is that in the earlier data, some of the data are estimates and not actual readings. This was prior to the time that CL&P had electronic meters, and reading the meter was much more variable. I've noticed that the newer readings are all "ACTUAL" readings and not estimates. On the warmer side, as previously noted, the amount of cooling capacity increased over time, and that and vacations explain a good deal of the scatter during the warmer periods.

Finally, I just want to say that while January, 2005 represented our peak heating oil use, January, 2007 represents the high water mark for us in our electric usage, or at least I believe it will be. We are working on reducing that peak value, and hopefully the new changes will be in before the winter comes...and the changes aren't the switching to fluorescent light bulbs, which, I'm somewhat embarrassed to say, we still haven't done as yet.

Wednesday, October 03, 2007

Geothermal Analysis: How's It Working (Part 1)?

Now that it has been about a year since we have converted to geothermal for our cooling and our first-stage heating needs, it is time to check the results. It hasn't been easy to do this analysis. A lot of time was spent digging out old bills and check registers to find out how much heating oil we actually used, how much we are now using, and whether or not the conversion was worthwhile. The short answer is yes, it has been worthwhile, but there are a few side-effects and mis-steps we made along the way.

Locating our old heating oil bills wasn't easy. With having to move our for our renovations in 2005, we boxed everything, and of course, the process wasn't as efficient as one would have hoped. We are packrats to a large extent, so most of the bills were located, and the information was cross-checked with the checking account records and verified by the weather data. I think the analysis is as complete as it can get here, and the results pass some simple consistency checks.

The first figure below shows the amount of heating oil we have used on a daily basis since late 2000. The gap starting in the Spring, 2005 is because of the renovations, and the start of the geothermal period starts in late-2006. We had hot water starting May, 2006, but I've left that period out due to complications of how much heating was used in the renovation period.

The amount of heating oil used are given by the blue bars and are in daily amounts. The use of daily amounts is because the deliveries are not on a periodic schedule and vary depending upon how cold it has been. For instance, the very first bar represents 386 gallons used over 65 days. The very next bar is 278.3 gallons but is was used in only 24 days, and so on. Conversion to daily rates makes the analysis easier.

There are many parts to this first graph that deserve comment. One issue is shown by the red dashed line, and it represents the baseline heating oil use. The line is drawn at 2 gallons per day, and interestingly enough, it is the same for all years--both before and after the renovations. I'm assuming that this 2 gal/day is predominantly the amount we use for water heating. Here is one area where we blew it. The geothermal units can come with a water heater attachment (the desuperheater) that effectively gives you free hot water during periods of high geothermal heating and cooling, and we didn't get it. I think that was a big mistake.

The most interesting item is the major reduction in the amount of heating oil used since the installation of the geothermal. The total rate for last season was about 4.2 gallons/day, and about half of that was for heating water! So, yes, the geothermal heating has significantly cut into our heating oil use! However, it has come at a cost, namely more electricity, and that discussion is taken up in part 2.

Most remarkable about the reduction is that the renovated house is 60% larger than the older house. We are now at 4200 square feet instead of 2600 square feet. Countering that, though, is the fact that the present house is insulated and thermally wrapped whereas before, there was very little insulation, and the house was drafty. Nonetheless, the data suggest we went from roughly 2000 gallons of heating oil per heating season to about 700--a reduction of 65%. This reduction estimate is a little too high, as we will see below.

There is another complication, and that is that each year is a little different in terms of how cold it gets, and that factor needs to be taken into account. The way this is done is with something called the Heating Degree Days (HDD). A heating degree-day is a measure of how cold it is, and the amount you need to heat increases as the number of HDDs increases. The exact definition is that the number of HDDs is the total number of degrees the daily average temperature (in fahrenheit) is below 65 degrees. For instance, if the high and low temperatures for the day are 78 and 50, the number of HDDs for the day is 1 degree day [65-(78+50)/2]. For average temperatures over 65, the number of HDDs is zero. For a cold day where the average is 30 degrees, the number of HDDs would be then be 35. The next figure shows the number of HDDs for the same periods shown in the first figure.

From looking at the HDDs, the proper year to compare the new data to is the 2001-2002 season, because it was a similar winter in terms of overall heating. Taking out the water heating, we went from 6 gallons/day for heating to about 2.3 gal/day. The reduction is still 60% in our heating oil use.

The next figure shows the relationship between the amount of heating oil used and the number of heating degree days.

In the figure, I've noted 2 blue data points that are below the trend in the old house, and that is because we were on vacation during these two periods, so our demand was indeed down, but not for weather-related reasons. The red points are from the renovated house with geothermal heating. The red line shows a simple linear model for the new period, but it is not correct. The way the heating works is that the first stage is always geothermal. If the geothermal cannot keep up with the needed heating, the second stage heating (heating oil) comes on-line. The non-linear dashed line is probably closer to the current set-up in how our heating needs use heating oil.

Our biggest goal is to reduce our foreign oil dependence, and the switch to geothermal heating as first-stage heating has surely done that. In this manner, the new units have been successful. But at what cost? To answer that, the electricity data need to be analyzed, and that will be a subject of a later post.