PV Solar vs. Geo
My wife and I are planning to build a new house (2400 sq. ft) in Southern Delaware. We are considering PV solar and perhaps a closed loop geothermal. Not sure we can afford both. Rebates in DE. appear to be higher for solar than geo. Both technologies would provide credits for Fed tax; no DE state tax credits. In addition, we would receive credits for unused solar production and be able to sell SRECs. Nothing similar for the geo install. In addition, one builder claimed that he could build the house so that it would make geo unnecessary in that it would take a 50yr payback period.for the geo. So I’m leaning toward the PV solar but would like to hear opinions.
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Replies
Ken,
I'm not a fan of ground-source heat pumps (a type of heat pump that many marketing people call "geothermal") for most residential applications. They cost far more to install than can ever be justified.
The most important thing you can do if you are building a house is to plan a very tight, very well insulated thermal envelope with high-performance windows. If you do that, your heating and cooling costs will be very low, and you won't need expensive equipment like a ground-source heat pump to heat or cool your house.
Ducless minisplit units will almost always be much cheaper to install, and almost as efficient, as a ground-source heat pump.
Now that PV prices are coming down, it can make sense to install a PV system, especially if rebates and incentives are good in your state. However, the same rule applies: first, do everything you can to reduce your electrical load by choosing small, efficient appliances -- as few as possible -- and efficient lighting.
100% agree with Mr. Holladay.
A bit of general advice that applies to a lot of different areas: Always get more than one bid/opinion. Otherwise, you are relying on only one person's abilities/knowledge... or lack thereof.
You may find the 2nd (or 3rd, or 4th) opinion reinforces what you were already told. Or, you may find there is an alternative.
I don't know what builder you consulted with, and it doesn't really matter who it is. Getting another opinion is very prudent.
P.S. But it's always a red flag for me when someone throws around nice round numbers.
Here is an answer from Chris Williams that I received in another forum: Regarding the build, this is absolutely possible if you're building close to passive house standards (less then 1 air exchange per hour, R60+ roof, R45+ exterior walls). However, even if you're BTU's square foot are extremely low (under 10BRTU/square foot) and your house is large enough (in terms of square feet) geo can still make sense. Once the design heating load is less then 24,000 BTUs (more or less) geothermal starts to become less important and you might want to look at air source heat pump. ALSO, If you're building a new house, payback period is an extremely, extremely useless term. All that you need for geothermal to be more profitable is for the IRR from the system (IRR equivalent to the systems interest payment, think interest rate on an XX dollar investment in a bank account) be HIGHER then the interest rate on the mortgage (given it's fixed). If you're mortgage interest rates is around 5% and the IRR from the geo system is 6%, it's still a no brainer to go geothermal.
Ken,
It's only a "no-brainer" if the equipment lasts longer than the mortgage ... and it might not ...
Reliability is critical. Could someone tell me what type or warranties are given to a closed-loop system? I believe there are substantial warranties given to the underground loops but I'm not clear on what warranties apply to the other parts. And I know warranties are only as good as the company who installed them.
Ken,
Reliability matters, but so does installation cost. Most of these residential GSHP systems cost $20,000 to $30,000 to install.
quotes I have received for a top of the line Waterfurnace 2 ton unit, desuper, and loops with HRV has been right around and just under 20k. The put is closer to 12k after all rebates and credits are taken. Similarly with going a standard HP route (say Trane) install costs have been right around $12k. So a wash there. No brainer for geo. However factoring in the mini split option it starts to get a little more tricky. Using 2 12k btu Hyper heat units (1 in the basement and 1 on the main level) are around 2500-3k each installed. Add a whole home HRV and ducting to that price and you are around the 8k range. Then add backup electric baseboard heaters as a backup with all associated electrical and that is getting you closer to 9k. (again, these are numbers I have received).
So now we are talking only a 3-4k difference between geo and the mini split system. Even if payoff was extended to 20 years using a super insulated shell, there may be other things to consider besides just the math. Obviously something to consider is the upfront cost. You still need to shell out the 20k to pay for the geo and wait for the rebates. Luckily my bank is willing to cover the estimated cost of the net geo price in the mortgage. They will then give a second short term loan to cover the gross balance. Once we get the rebates, simply pay off that note and you are still left with the lower mortgage amount.
Geo will cost you less a month, that is almost a given. How much less is what is in question. Maybe $10. Maybe $100. It can also be used to help offset some of the water heater demands in the summer, which has a dollar value as well. Small, I admit, but it still is there. The big thing to us is the guarantee you have air supplied to spaces more uniformity compared to single point heating sources. Can it be done? Of course. There are many success stories. But its about preference too and functionality in the home that is possible to be compromised by using a single point heating source.
We have not fully decided which direction to go yet, however we are heavily leaning on geo. For the 3-4k (net) add, that can be made up in something as simple as choosing the standard or semi custom cabinet line instead of custom. Just get numbers and see where you are really at when everything is factored in.
I too have looked at PV. I see prices continue to come down, so the plan is to simply do the steps required to be PV ready. So hopefully as we near 2016, prices will be low enough it will make good sense to do that.
Edit: I should add my current design loads are around 18k BTU heating. 11k btu cooling.
A PV system should last the life of a mortgage. There may need to be a little maintenance during that time, e.g. a new inverter, but there shouldn't need to be a lot and the panels have proved that they can last 30+ years. Look at what adding PV would do to your mortgage and then compare that to what you'll save in utility bills. Depending on your utility rate, the difference in your monthly costs probably won't be much. Now factor in what a better environment and less reliance on foreign energy sources are worth to you.
Yes, costs for PV will probably come down over time. The same is true for computers, but you wouldn't wait until prices bottom out to get one!
At a minimum, I would recommend you design so that adding PV in the future will be easy to add if you decide against it for now. Many utilities offer the option to pay a small premium to assure the electricity you do purchase comes from renewable sources. I think this is a great option for anyone that currently isn't able to generate their own. If you do decide to add PV at this time, but can't swing a system that will generate 100% of your needs, you might want to look into micro-inverters. Using them offers more flexibility and could make adding more panels later and easier prospect.
You didn't mention solar hot water, but I personally would look into that as well. My understanding is the economics are even better for SHW than it is for PV and the upfront cost is generally quite a bit cheaper.
Lastly, I would echo what Martin has said. The most important thing is to build a tight and efficient home. PV, SHW, etc are what you add after that has been done.