Geothermal Cost Comparisons

Things I Have:
- An economic assessment of a residence in Englewood, Colo. completed by Geo-Energy Services, LLC
- Residential federal tax incentive pdf

- And this e-mail from a designer with Rocky Mountain Geothermal:

Lauren,

Here is a recent study we have provided:

I have put together this economic summary.  Normally, this indicates a 7-10
payback, occasionally higher or lower.  When I put this together, I did not
really believe it, but I’ve looked over all of my inputs and other features
this thing indicates.  What this indicates is that the 30% tax credit, makes
this system a near immediate payback because it has a lower installed cost
from the initial start.

Here is the basis of assumption:
Modeled House: 24,570 sqft built with energy code compliant walls, roofs,
and windows.

Conventional system (Alternative 2): Hot water boiler for radiant floor
heating in the basement and hot water serving  4-pipe fan coils for the main
and upper level.  Air-cooled chiller for chilled water serving fan coil
units of main and upper level.  Primary chilled water and hot water
circulation pumps.

Geothermal system (Alternative 1): hot water for radiant using
water-to-water heat pump units in the basement and then water-to-air heat
pump units for the main and upper level.  Primary water pump from ground
loop heat exchanger to all heat pump units in house.  A vertical ground heat
exchanger using approximately 22-400’ deep vertical boreholes.

Convention system installation cost: $15/sqft included for all HVAC system
costs = $368,550

Geothermal system installation cost: $15/sqft plus a 15% premium above
conventional (although I argue the interior cost is nearly the same cost,
but to be prudent let’s assume a 15% up charge for whatever reason) and then
an estimated $120,000 for the ground loop heat exchanger cost.  As it stands
now, the entire geothermal system cost is a 30% tax credit (attached
brochure) = $368550 (inside HVAC) + $55,282.50 (15% premium) + $120,000
(ground loop) = $543,832.50 -$163149.75 (30% Tax Credit) = $380,682.81

Current Xcel utility rates for electricity and natural gas with 3%
escalation per year for electricity and 5% per year for natural gas (both
DOE stated escalation factors for Life Cycle Analysis purposes)

Also understand in this analysis that general assumptions about use of the
house have also been assumed with appliances, TVs, lights, etc. throughout
the house, but as far as this energy model goes, the same general
information with this respect have been applied to both HVAC systems.

This is a scalable analysis , so if installation costs were presumed higher,
say $20/sqft for the conventional system and $23/sqft for the geothermal
system, the payback calculation would remain relatively the same, just the
installation costs would be higher.

Please let me know if you have any questions.

Thanks,

Trey

Warren (Trey) Austin, III, P.E.
Certified GeoExchange Designer
Certified Energy Manager