A while back, I mentioned that I’d traded in my clunky old furnace for a new-fangled, super-efficient model. Not without some trepidation, though, since I took out a home equity loan to pay for it. For me, debt = yikes!!!
But despite my aversion to living on borrowed money, I reasoned that—provided that things played out as I expected—the furnace would start paying for itself from day one. It was a risk, sure, but one I was willing to take.
Without a loan, an efficiency upgrade like this can take a while to pay for itself. With up front costs of $3,500, more or less (really, more, since I went for the most super-efficient model), it could be 7 years or longer before the gas savings would pay off the cost of the furnace. And while that’s a rate of return that patient investors would leap at, I’m just not that patient!
However—and despite the greed and farcically bad judgment on display in the ongoing mortgage market meltdown—financial instiutions do tend to be more patient than consumers. Banks are willing to lend now, in the hope of making a profit a decade down the road.
So I figured I could take advantage of their farsightedness, by letting them pay for my furnace now, and paying back the loan gradually, using whatever money I saved on fuel to pay interest and, eventually, principal. That way, I’d use less gas right away—with obvious climate benefits—and I wouldn’t pay a cent more for heating (combining fuel and financing) than I did before the upgrade.
But it was a bit of a leap of faith, sinceI didn’t know in advance how much fuel I’d save! If I gambled wrong—and it turned out that the old furnace was actually pretty efficient—the new furnace might turn out to have been a dud of an investment.
So how have things turned out?
In a word: AWESOME!! (Thankfully.)
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In November and December—the real beginning of the Seattle heating season—I saved a combined $150 on my gas bills—more than enough to pay for the monthly finance charges, and even pay back a chunk of the principal on the loan.
November was a weird case, since we had some work done on our house that kept a hole open from the living space upstairs into our attic. Still, our gas bills went down by 42 percent, compared with a year earlier—despite slightly colder temperatures.
But December’s bill was a much better comparison, since the hole was sealed and the temperatures were about the same as previous year. And for the month, our gas consumption fell by 53 percent compared with a year ago, saving us over $100. Yowza!
If these savings keep going, I’ll be able to pay off the loan early—and after that, the gas savings will be like free money! And if I’m wise and patient, I’ll plow the money I save on my gas bills right back into another efficiency upgrade: hopefully, the first step in a long, virtuous cycle.
Cool, Clark. Maybe your next investment should be a graywater waste heat recovery system. (Watch the video.) It’s passive in design so it’ll last the life of the house, and it saves energy in a very cool way. I love ours. In fact, I think building codes for commercial and multifamily buildings should require them: maybe for single-family homes, too.
Matt the Engineer
Wow, I like the heat recovery system. It should be well under $1000 to install even their 5′ model in a house under construction, but it’s probably not a small job to retrofit, especially if you aren’t sure where your water lines run.Do you find your water temperature changes as you shower?
Clark – Congratulations on the new furnace. Every step forward is valuable right now. But we are still faced with the conundrum of how to heat our homes w/o fossil fuels. Fossil fuels have a lot of applications that simply cannot use anything else, and we should be thinking strategically about how to allocate our fossil fuels (or our emissions budget if you want to think that way). I think that to be heating our homes with fossil fuels when there are non-fossil fuel alternatives will soon be seen for the myopia it is.I am thinking in particlar of Ground Source Heat Pumps or “Geoexchange” systems that use the heat from the sun that is stored in the earth each summer as a heat source in winter. (Conventional “air source” heat pumps don’t fair as well in our climate.) Check out Integrated Renewable Energy for information.Not every site can accommodate a Geoexchange unit, but we should be pushing the envelope on them and providing tax credits and/or subsidies. They totally liberate home heating from fossil fuels, and enable home heating using renewable power even in our climate!Paul Birkeland(Disclosure: Integrated Renewable Energy is my renewabel energy consulting firm.)
Paul—I don’t mean to throw cold water on your enthusiasm for ground source heat pumps, but when we built our home I calculated potential cost savings of a heat pump vs. a high efficiency boiler. With substantially higher install costs the heat pump ended up losing out even when considering a higher inflation rate for natural gas vs. electricity. In my case I could have put the difference into a 30-year Treasury bill and paid my gas bill for the next 30 years as well as green tags to offset carbon emissions. Until our electric grid is 100% renewable, any additional electricity will probably be generated with Natural gas or, gulp, coal.Sigh… The heat pump would have been seriously cool though, and who knows… Maybe gas prices will climb dramatically faster than electricity although the opposite has been true so far.
I, too, have a clunky old furnace (oil) and no gas line to the house. Where’s the best place to find info on energy efficient furnaces?Thanks, Ruth
Matt the Engineer
Ruth,I’ll throw in my two cents, though I recommend waiting for a response from someone like Clark that has gone through the process.First, decide how much you’re willing to invest in a new furnace. My guess is that unless it’s affordable to pipe in natural gas or unless you have land you don’t mind digging up for a ground-loop system, you’ll probably just want to replace your oil furnace with an efficient oil furnace (though I have no idea how much oil costs, and the cost savings may pay for either of the other two options). It looks like you can get an efficient oil furnace (up to 95% AFUE), but if the cost for oil is high, this may not matter much. For a gas or oil furnace, the big step up in efficiency is a condensing furnace. This means that the furnace recovers enough heat from the flue gases that water vapor in these gases condenses into liquid water. Instead of sending very hot gases (and therefore heat) up your chimney, you’re sending slightly hot gases up your chimney (plus you’re changing the phase of water from vapor to liquid, which turns out to be quite a bit of energy). These furnaces are over 89% efficient, though you need access to a water drain.Now, let’s look at switching to electricity. In our region electricity is fairly inexpensive. Not as inexpensive as natural gas or likely fuel oil, but you can do some neat tricks with the stuff. Heating a house with a plain electric furnace will probably be much more expensive than with oil or natural gas. However, if you install a ground loop heat pump (a water loop in the ground, hooked up to an electric heat pump) you can double or even triple the amount of heat put out for every dollar you spend on energy. Ignoring cost and focusing on the environment, my preference would be the ground source heat pump. Sure, we’re currently getting electricity from sources like coal (though indirectly), but you’re getting double the value from your energy because you’re using a heat pump. Besides, I still have hope that we’ll be shutting down coal plants in the next 30 years.
Paul –I love me some ground source heat pumps!! But the cost/benefit ratio didn’t make much sense for me, unfortunately. Maybe next time I have to replace the furnace…But for new construction, especially big buildings, they’re awesome.Previous raves from this blog: here, here, and most recently here.
Ruth:With no gas line to the house, I don’t know what I’d recommend. But I’ve found James Dulley to be a bottomless source of energy efficiency geekery. His website’s not particularly snazzy, but the information seems solid and virtually limitless. I’ve paid for a couple of his efficiency rating pamphlets—and they’ve seemed like a pretty good value to me. That said, your mileage may vary.
About ground source heat pumps: Not to niggle, but their compressors do run on electric power, so “total liberation” from fossil fuels only happens if the power company is fossil-free. Matt’s and other comments have acknowledged this tangentially, but it’s important to be clear about it.That said, Paul and others are right that this is an important technology. It’s more and more widely available and in use, and the art is bound to improve and the costs come down as usage spreads. It’s a “holding action” technology (see Joanna Macy’s three kinds of needed work for this era here), not a transformative one, but the high efficiency and the use of earth-stored heat are both much needed.
Here’s an interesting argument: if one subscribed to 100% green power from their electric utility, wouldn’t that pretty much offset the impact of electricity use better than even the most minimal use of natural gas?And while they are efficient, ground source heat pumps are expensive. I’d ask Mr. Birkeland to tell us if a “typical” system he’s selling would save enough to pay back the loan, as Mr. Williams-Derry’s gas furnace seems to.
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