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Just How Much More Efficient are GeoExchange Heat Pumps? The Environmental Protection Agency and the U.S. Department of Energy have both recognized geoexchange technology as the most efficient and environmentally friendly home heating and cooling system available. According to studies by the Environmental Protection Agency, GeoExchange systems achieved a 48% increase in efficiency over gas furnaces, a 75% increase in efficiency over oil furnaces, and 40% greater efficiency over air source heat pumps. This all sounds wonderful, but just how does this relate to the consumer in California where electricity costs are sky high, or to the homeowner in New England thinking about replacing an oil furnace? This analysis seeks to investigate the actual comparison costs of GeoExchange systems to other conventional HVAC systems. The emphasis here is to present real world cost comparisons to be used by consumers as a tool for determining expected operating expenses, and payout times for new and replacement installations.   GeoExchange vs. Air Conditioning Nearly all conventional residential and light commercial buildings use refrigerant type air conditioning systems for cooling the interior space. These units all have the familiar outdoor condenser units. Variations include packaged heating/cooling units and air source heat pumps. All use outside air to cool the refrigerant, while rejecting heat into the surrounding air. For the purposes of this discussion, all of these units will be referred to as "air source" equipment. Comparisons between GeoExchange Heat Pumps (GHP) and conventional air source units are convoluted because of the sharp decrease in efficiency of air source equipment as a function of outside air temperature. Manufacturers of air source equipment are quick to post impressive EER and SEER numbers on their "high efficiency" models, but a closer examination of the actual performance data shows that these lofty numbers do not correlate well under realistic installed conditions. A typical example of a 3-ton air source unit shows manufacturer's SEER as 12.0. However, a closer look at performance values yields a calculated EER value of 10.5, at rated conditions (95° F entering condenser air, 67° F wet bulb evaporator). This would represent a daytime temperature of about 90° F. When the outside temperature rises to 100° F, the air source EER drops to 9.2, which represents a reduction in efficiency of 12%. If outside temperature rises to 110° F, the air source EER drops even further to 7.7, which represents a reduction in efficiency of 27%. This means that the unit is requiring 27% more electricity to yield the same cooling. Another aspect of the air source units is that the cooling ability of the unit is also a function of outside air temperature. A typical 3-ton unit can put out 3 tons of air conditioning when the outside air temperature (at the condenser) is 95° F. But, if the outside air temperature rises to 110° F (115° F entering the condenser), the unit can only put out approximately 2.6 tons, a reduction of 14%. Condensers that are clogged with dirt or debris will have even further reduction in efficiency.   The performance of an appropriately designed GeoExchange system is independent of changes in outside air temperature and humidity. Since the temperature of the earth where the geoexchange occurs is relatively unchanged throughout the year, the GHP's efficiency of both heating and cooling seasons is fixed. Typical efficiency for a 3-ton GHP in cooling mode with entering water temperature (EWT) of 60° F is approximately 18 EER. Comparing GHP to air source units as outside temperature varies:   EER Comparison of GHP vs. Air Source Cooling Outside Temperature 90 °F 100°F 110°F GeoExchange 18 18 18 Air Source 11 9 8   As indicated in the chart above, GHP systems for air conditioning are considerably more efficient than the conventional air source units. Simple calculations show that energy costs for a GHP are nominally 40% less than air source; 50% less than air source at 100 degrees; and can be as much as 55% less than air source as temperatures rise further. This efficiency analysis has attempted to examine like units for an "apples and apples" comparison. It has not included the effect of a GHP desuperheater, the hot water feature capability. In the summer, if the GHP is used to provide supplemental hot water to a conventional gas or electric water heater, the efficiency disparity becomes even greater. With the GHP's desuperheater in service, hot water in the summer essentially becomes free. GeoExchange vs. Gas Furnaces Cost comparisons between GeoExchange Heat Pump systems and Gas Fired Furnaces are difficult to evaluate for a number of reasons. First and foremost is the drastic difference in prices of both gas and electricity over time and location. From data collected by the Energy Information Administration, consumer prices for residential natural gas (per MCF) in 2000 varied from a low of $3.57 in Alaska to $21.87 in Hawaii. Even ignoring these two states, there is still a variation between $5.17 paid in Michigan and $11.29 paid in Connecticut. Attempting to establish a suitable electric rate is equally as difficult. Again from data put out by the EIA, electrical rates (per KWh) for residential consumers in 2000 varied from $.05 in Washington to $.16 in Hawaii. Other factors to consider in making attempts to compare GHP to gas furnaces include seasonal price fluctuations. In general, natural gas prices to consumers are higher in the winter, while electrical rates many times are lower in the winter. In this analysis, we will compare a typical gas-fired high efficiency furnace and a GeoExchange heat pump. The gas furnace efficiency is 80%; the GHP COP is 3.5. Calculations show that the break-even point occurs when the price of electricity per KWh is equal to 0.15 times cost of 1 CCF of gas. For example, if the energy cost of consumer gas is $1.00 per CCF, the break-even point for a GHP system is where electricity cost is $.15 per KWh. So if the cost of electricity is less than $.15 per KWh, the GHP is more economical. This is shown graphically in the chart below. To see how some real world conditions apply to the chart above, this analysis has considered the average cost of natural gas and electricity for all states during the winters of 1999-2000, and 2000-2001. We have also used the average residential electrical rate average for all states during the same time period. Since the cost of natural gas was so dramatically increased in 2000-2001, we will look at both cases individually. Actual numbers assume units operating at 36,000 BTU/Hr. Average natural gas prices during the winter of 1999-2000 were $.68/CCF, while electrical rates averaged 8 cents/KWh. From the chart, we can clearly see that the intersection of those points is in the "green" area. Actual calculations show that the cost to operate the 3-ton heating units were $.31 per hour for the gas unit and $.23 per hour for the GHP. This represents a reduction in energy cost of approximately 26%. Average natural gas prices during the winter of 2000-2001 were $.94/CCF, while electrical rates still averaged 8 cents/KWh. From the chart, we can clearly see that the intersection of those points is further in the "green" area. Actual calculations reveal that the cost to operate the 3-ton heating units were $.42 per hour for the gas unit and $.23 per hour for the GHP. This represents a reduction in energy cost of approximately 45%.     GeoExchange vs. Heating Oil Furnaces Like the comparisons to natural gas, cost comparisons between GeoExchange Heat Pump systems and Heating Oil Furnaces are difficult to evaluate. Heating oil prices fluctuate due to seasonal demands, and the cyclical nature of crude oil prices. In this analysis, we will compare a typical oil fired high efficiency furnace and a GeoExchange heat pump. The oil furnace efficiency is 80%; the GHP COP is 3.5. Calculations show that the break-even point occurs when the price of electricity per KWh is equal to 0.107 times cost of a gallon of heating oil. For example, if the energy cost of heating oil is $1.00 per gallon, the break-even point for a GHP system is where electricity cost is 10.7 cents per KWh. So if the cost of electricity is less than 10.7 cents per KWh under these conditions, the GHP is more economical. This is shown graphically in the chart below. Analyzing real world energy costs, the Energy Information Administration has projected the average winter price of residential heating oil for winter 2001-2002 at $1.29 per gallon. Residential electric rates for the last two years have averaged 8 cents per KWh. From the chart, we can again see that the intersection of these two points is clearly in the "green" area. The "green" area shows us graphically that the GHP is more economical than the oil-fired furnace. Comparing 3-ton units, calculations show that the cost to operate an oil furnace is $.41 per hour. The cost to operate a GHP is $.23 per hour. Therefore, operating the GHP represents a 41% reduction in energy cost.     GeoExchange vs. LP Gas (Propane) Furnaces Like the case with natural gas, comparisons with furnaces operating on propane are subject to the same difficulties due to fuel cost variations. In this analysis, we will again compare a typical gas-fired high efficiency furnace and a GeoExchange heat pump. The gas furnace efficiency is 80%; the GHP COP is 3.5. Calculations show that the break-even point occurs when the price of electricity per KWh is equal to 0.16 times cost of a gallon of LP Gas. For example, if the cost of LP Gas is $1.00 per gallon, the break-even point for a GHP system is where the electricity cost is 16 cents per KWh. So if the cost of electricity is less than 16 cents per KWh under these conditions, the GHP is more economical. This is shown graphically in the chart below. In our effort to do some real world analysis, we find that the Energy Information Administration has provided us with average propane costs for residential consumers. In 2000, average annualized cost of LP Gas was $1.17 per gallon. For six months into 2001, the same gallon of LP Gas has averaged $1.36 per gallon. With our two-year average electricity rate of 8 cents per KWh, we can clearly see that the intersection of these two points is clearly in the "green" area for both 2000, and 2001. Again, the "green" area shows us graphically that the GHP is more economical than the LP Gas-fired furnace. Comparing 3-ton units, calculations show that the cost to operate an LP Gas-fired furnace is $.57 per hour for 2000, and $.67 per hour for 2001. The cost to operate a GHP is $.23 per hour. Therefore, operating the GHP represents energy cost reductions of 60% and 67% respectively.   Conclusion The analysis here is consistent with the EPA's results, although our assumptions appear to have been chosen more conservatively. Regardless, it is clear that GeoExchange systems are significantly more efficient and less costly to operate than all other methods of heating and air conditioning systems.   GeoExchange home How Efficient Are They? The Numbers Resources About the Author Notes Sourcebook Contents