Question

20. A 3,000 sqft home located outside of Alamosa, CO has 5 Ton Geothermal System with vertical loop field that costs %20,000. 1600 gallons of propane on average was used before to heat the home per winter over the past 5 years. Geothermal replaced both propane furnace and central air conditioner. It also preheats hot water. They no longer purchase a fuel to heat the home. This new system increased electricity use by around 4,000 kwh annually. The price of propane is $2.15/Gallon and cost per kwh remains at 12 cents. What is the payback period and how much they will be saving in 15 years? The geothermal heat pump has a 15 year expected lifetime. The ground loop is guaranteed for 50 years, Ground temperature is constant 55° F all year.

Answer 1

Simple Payback Period (Years) = First Cost / ( Annual benefits gained - Annual cost incured)

First cost = 20000 + (1600 x 5 x 2.15)..........(Considering cost of propane used before over years)

= 20000 + 17200

= 37200

Annual benefits gained = (1600 x 2.15)

= 3440

Annual cost incured = (4000 x 12 cents)

= 48000 cents

= 480

Therefore,

Simple payback period = 37200 / (3440 - 480)

= 12.56 Years

Saving in next 15 years = (Annual benefit gained - Annual cost incured) x 15

= (3440 - 480) x 15

= 44400