Transitioning Between Propane and Electric
After a year of house hunting, we finally landed a home within a school district of choice. The home is set to deliver in April 2023 and fingers crossed the propane prices drop by then. Not too hopeful on that price drop, so I began looking into this HVAC topic more closely. The home is in the Philly suburbs, so I think Zone 4A.
The setup:
1. We are tied to propane for heat, cooking, fireplace, water heating (Navien NP240A tank less). Dual zone heat with 2 Lennox ML193UH070 furnaces and 2 Lennox 13 SEER AC units (model 13AC XN030-230-26). I got an electric connection for the dryer.
2. The builder has locked us into a tank lease for 2 years and the propane price is based on the Non – TET TX Mont Belvieu propane index +$1.35 which at the moment comes to about $2.5 per gallon. We cannot change the heating system on the house and any such change would trigger a $5200 “removal” fee by the propane supplier and I’m guessing they will also remove the tank if they observe that I have used less propane than what they’ve estimated. I will speak with them once more between now and April to see if I can avoid this lease altogether and just buy it out upon moving in. To be figured out. Based on my initial chat with them, the propane supplier has estimated that we will need 4-5 refills a year, so approx. $3000-$3500 annually in propane gas spending for the 3120sqft finished area using the current pricing. Index link: https://fred.stlouisfed.org/series/DPROPANEMBTX
3. Upon completion of this 2-year contract we have the option for a “lease buyout” at $5200 and then finally shop around for propane and get heat pumps. This is my main concern and design question. I will have 2 propane furnaces and 2 Lennox AC units. I plan on swapping those out to Lennox air source heat pumps and somehow finding customers to sell the 13 SEER AC units to – most likely won’t get any decent amount for those units based on what I’ve heard from the few local HVAC guys I spoke with.
4. We pushed to get the Manual J from the builder – and they shared it surprisingly. It is attached. The home is South facing and I have no idea why it says on there that the main door faces west. It also mentions that the basement is finished and it isn’t. My guess after reading for a few hours on this blog and other questions posted on this topic on this forum, is that this is another one of those “Garbage in – Garbage out” Manual J calcs. Can someone verify the calculations?
5. The insulation details are in the attachment. The builder is using 2015 IEC code and has mentioned in an email that they will push for a blower door test with 5 ACH50 or lower. Windows are Plygem silverline and the construction is Tyvek over OSB. Based on some homes I walked through in the construction stage, it seemed like the envelope was pretty tight. I will try and hire a HERS rater and have them accompany me at the pre-drywall walk-through however I doubt that I will be able to obtain the blueprints of the house which are required by HERS raters. Should I skip the rater and just hire a standard new home construction inspector?
6. Once the above questions are answered, how do I go about sizing my heating system and designing my heat system to reduce/eliminate the propane usage?
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Replies
I'm sorry you're locked into that propane agreement, as you pay 2x what my heat pump costs per MMBtu and you have a huge breakup fee.
The easiest way to figure out the heat loss would be to use this: https://www.greenbuildingadvisor.com/article/replacing-a-furnace-or-boiler once you've spent a winter in the place. This method is based on what actually happened, not what was expected to happen.
Seems like it comes down to how bad do you want this house.
If this clause was not made expressly know to you before you signed, I would walk away from the house. It seems like the housing market had done a 180° turn around here in the last 60 days.
Seems to me any builder that would lock you into such a bad deal is likely out to screw you in 10 other ways seems best to cut your losses now.
Walta
It was explicitly stated on day 1. I signed when rates were low and knew what I'm signing up for. We didn't want to walk away from a home for a HVAC system issue as any other older home we purchased would need some design/ insulation update work involved too. With the new construction we signed knowing that they are doing a blower door test and pushing for lower ACH scores.
Tighter home will be best. The $1.35/gallon minimum price is already more expensive than a heat pump at $.15/kwh unfortunately. The builder must get a huge sum from the propane company.
Is the HVAC installed? Can you just replace the Lennox AC units with Lennox heat pumps now before they are installed?
Agreed - this would be extremely cheap to do upfront and expensive to switch out later.
The propane lease contract states that the home MUST be tied to propane for primary heat for 2 years. If found otherwise then we are in breach of contract and owe a "removal" fee of $5200.
I have tried to negotiate with the builder to have their hvac contractor put in a heat pump but they are not budging on this. I'm sure that they have received kick backs from propane organizations and also probably own the propane company itself. Funny thing is that I can't even locate the propane company on Google maps or yelp and their address on the contract shows up as a UPS store when I Google it. Shady as it gets.
So shady, but almost no one chooses propane willingly as it's a pretty poor heating source. You're only a few hundred dollars upfront to install a heat pump vs. $5200 + brand new heat pump + removing the old equipment. I'd bribe the installer.
You are probably still ahead of the game with the $5200 fee than trying to add heat pumps 2 years later, so much cheaper to do now. I would just break the propane contract and either consider it an expensive lesson learned or contact a lawyer.
And just to clarify, they won’t install a heat pump connected to the propane furnace (vs a stand alone heat pump and air handler)? You could argue that the heat pump is backup if the propane burner fails, but the propane furnace is still the primary source of heat.
Talk to your lawyer asap. I'm betting a good one will see an easy way out of this horrible propane deal and maybe even the collusion tactics with your builder. What a POS.
This is a side note to your broader questions, but why do you doubt you will be able to acquire blueprints of the house? If the builder won't give them to you (which seems really odd), you should be able to just get a copy of the permit drawings from the building department (you may have to pay for them to dig them up, or pay for copies if they aren't digital, but it's usually a small sum). Depending on how high tech your building department is, you may even be able to get copies online.