THE GREEN IN GEOTHERMAL HEAT PUMPS

Shelton Cartwright, Jr.WaterFurnace International

Territory Manager Virginia – Maryland and Washington, DC

THIS MORNING’S SESSION

Snapshot of WaterFurnace International

Quick overview of geothermal technology and history

Important growth trends including incentives from Federal, State and Local governments

THIS MORNING’S SESSION

Cost Comparisons using a suggested professional approach by an HVAC contractor

New Home Example

Existing Home Example

Live Examples using the WaterFurnace Online Savings Calculator

ABOUT WATERFURNACE

Established in 1983

Over 300,000 geothermal units installed

$129 Million (US) in Sales for 2009

Traded on the Toronto Stock Exchange (WFI)

$26.11 (Canadian) Per Share on March 19, 2010

Headquartered in Ft. Wayne, IN

115,000 SF Headquarter/Factory

Served by a geothermal pond loop system

ABOUT WATERFURNACE

Staff of 5 Trainers•Geothermal Pipe & Design•Service and Installation•One Day Refresher Training

GEOTHERMAL OVERVIEW

Heating Cycle

Heat is extracted from the earth and moved inside the house with water pumps, then transferred to the air coil via the heat exchanger, compressor and refrigerant cycle.

The optional desuperheater takes heat from the unit and uses it to heat water inside a domestic water heater tank.

GEOTHERMAL OVERVIEW

Cooling CycleThe optional desuperheater takes excess heat from the unit and uses it to heat water inside a domestic water heater tank increasing the overall efficiency.

Heat is extracted from the house and via the air coil and refrigerant cycle, transferred to water inside the heat exchanger then moved with water pumps and rejected into the soil outside.

GEOTHERMAL OVERVIEW

Types of Geothermal Units

Water to Air

Water to Water

Dual Capacity Compressors, Scroll Compressors

Vertical, Horizontal

Package and Split

GEOTHERMAL OVERVIEW

Types of Loops•Horizontal•Vertical•Pond•Open •Boiler

HISTORY OF GEOTHERMAL

No longer a science project

First GHP 1904 in Lardarello, Italy

1948 Ohio State Professor develops the first GHP for use in a residence

1978 First modern GHP home in Oklahoma

1982 First commercial closed loop system

GROWTH TRENDS

2005 2006 2007 2008 2009Change

2005/2009

A/C 6,471 4,951 4,508 3,968 3,515 -46%

Gas 3,512 3,197 2,782 2,280 2,174 -38%

HP 2,137 2,118 1,899 1,856 1,642 -23%

Oil 111 93 84 55 56 -49%

Geo 33 43 47 68 85 158%

5 Year Industry Unit Shipments* (000)

*Source: AHRI

FACTORS FOR GROWTH

Greater perceived comfort

Lower operating costs

2007-2008 Oil and LP fuels price jump

Higher electric utility costs

Consumer acceptance as “mainstream” technology

FACTORS FOR GROWTH

Demand side programs from electric utilities

State & Local incentives

Federal tax stimulus

FEDERAL TAX CREDIT

Homeowners:•30% of the entire cost of the project.•System must be placed in service between January 1, 2009 and December 31, 2016.•The home does not need to be the taxpayer’s principal residence.•Equipment must be Energy Star Rated.

Commercial:•10% of total cost•Installed between 10/3/2008 and 12/31/2016•Building located in the U.S.•Equipment must be Energy Star Rated.

http://www.dsireusa.org/

MARYLAND EXAMPLE

State :•Grant $500 per ton Maximum $3,000 for Residential.•Grant $500 per ton Maximum $10,000 for Commercial.

Howard County:•Property Tax Incentive.•50% of eligible costs•Maximum $5,000.•Excess may be carried forward for 2 years.

Other Maryland counties also have incentives for geothermal.

http://www.dsireusa.org/

COST COMPARISONS

EER IS HIGHER THAN SEER

21 SEER ≈ 15 EER or ½ of a 30 EER Geothermal Heat Pump

BIN CAPACITY GEOTHERMAL VS.

ENERGY STAR HEAT PUMP

Back-up heat neededTypical geothermal system’s balance point is at lower temperatures than with conventional heat pumps

WINTER BIN HEATING HOURS

Typical geothermal system’s electric back-up operates for fewer hours than conventional heat pumps

TOOLS FOR CALCULATING ENERGY

COSTS

Manual J – To Calculate Heating and Cooling Loads

WaterFurnace Savings Calculator – Allows homeowners to calculate savings based on their home’s square footage and weather zone

Unique software available to WaterFurnace Dealers:

Gizmo – calculates savings based on unit(s) selected

GeoLink Design Studio Helps dealer select the correct unit for the given loads

Calculates needed trench or bore

Calculates projected energy costs

Calculates cost comparisons

Note: Other geothermal manufacturers have software similar to GeoLink Design Studio available for HVAC contractors.

ENERGY COSTS (VIRGINIA)

Fuel Rate/Unit Period

Number 2 Heating Oil $2.48/gallon December 2009

LP Gas $2.39/gallon November 2009

Residential Natural Gas $12.52/tcf December 2009

Residential Electric $0.1012/kwhr December 2009

Source: U.S. Energy Information Administrationhttp://www.eia.gov/

HOMEOWNER COSTS

30 Year Fixed Mortgage 5.02%

Equity Loan 5.25%

5 year CD 3.2%

Installed Cost of Geothermal (2 to 6 tons single unit system)

New $18,000 to $26,000 and up plus loop

Retrofit $15,000 to $20,000 and up plus loop

Loop $3,400 to $14,000 and up

NOTE: Costs based on the Virginia market. Costs will differ in other states and regions. In addition, costs will differ according to soil conditions and home design.

NEW HOME EXAMPLE

•Two story home•Two 3-ton Geothermal Heat Pumps•Northern Virginia

Actual example home not pictured

Cash FlowAnalysis

Explain the benefits early in the decision cycle.

Note: Zero escalation rate yields conservative results

Value of the loop

OPERATING COSTS

System Heating Cooling Hot Water Total Annual

Geothermal $834 $389 $449 $1,672

16 SEER $1,194 $519 $895 $2,608

Natural Gas $1,465 $516 $585 $2,566

Annual Savings •Geo vs. 16 Seer = $936•Geo vs. Gas = $894

Note: Calculated from GeoLink Software and Manual J data.

ENERGY STAR RATED SYSTEMS

GEOTHERMAL VS. CONVENTIONAL

$1,670$2,608

$2,566

$4,017$4,749

Northern Virginia Weather Zone, Gas Water Heaters are Power Vented

2 Story Home with two 3-ton Geothermal Heat Pumps

RETRO-FIT EXAMPLE

My House

Charlottesville, VA

3 Story Townhouse

20 Years Old

1,600 SF

10 SEER Heat Pump

Replace old HP with 3-ton Geothermal Heat Pump

What a winter! Sick of snow, now that spring is here I have to repair my HVAC, or replace it with a geothermal system.

SAVINGS CALCULATOR

SAVINGS CALCULATOR

SAVINGS CALCULATOR

DEALER COMFORT SPECIALIST VISITS THE

HOME

Assesses property for most practical type of loop.

Measures the home for a heat loss/gain.

Review Expected Energy Savings with the homeowner.

Life-Cycle Analysis

Value of the loop

Note: Zero escalation rate yields conservative results

Cash FlowAnalysis

Year-6 forward, $105.41 positive cash flow per month

Note: Zero escalation rate yields conservative results

OPERATING COSTS

System Heating Cooling Hot Water Total Annual

Geothermal $353 $206 $369 $919

Existing $991 $594 $601 $2,176

Annual Savings •Geo vs. Repair= $1,257

Note: Calculated from GeoLink Software and Manual J data.

HVAC Dealer follows up preliminary costs savings after Manual J study.

ENERGY STAR RATED SYSTEMS

GEOTHERMAL VS. CONVENTIONAL

$918

$2,186

$1,516 $1,334

Northern Virginia Weather Zone, Gas Water Heaters are Power Vented

Retrofit Home

Options:•30 EER Geothermal•Existing 10 SEER•New 16 SEER HP• New 95% AFUE Gas Furnace with 16 SEER AC

*Not Energy Star Rated

NOTES ABOUT ESTIMATES

Emphasize the savings ratios not the final amounts.

The GeoLink Studio and other similar software uses algorithms based upon the latest ASHRAE engineering methods, 20-year average weather data, and a system installed according to the manufacturer’s guidelines.

NOTES ABOUT ESTIMATES

Lifestyles can impact energy usage as much as 30% for similar sized homes.

Retired man leaves his home 1 to 2 weeks per month and is left disappointed with his actual savings.

Some people just don’t take enough showers.

Weather can dramatically increase/decrease bills.

WINTER DEGREE DAYS DULLES AIRPORT

This past winter we had a colder December and February, but January was colder last winter.

2007-08 was closer to the “normal” winter.

Degree Days

SUMMARY

Geothermal systems are no longer “science projects” and are considered mainstream technologies by potential users.

Fuel prices, utility programs, and government incentives have contributed to the adaptation of geothermal technologies.

Geothermal system efficiencies are significantly higher compared to conventional HVAC systems.

SUMMARY

It is important to train HVAC contractors to understand the impact of lifestyles and weather conditions when communicating energy savings to their prospective customers.

HVAC contractors have professionally developed software to carefully project energy savings for their prospective customers.

Homeowners enjoy higher ROI’s when geothermal systems are picked vs. other choices, even the choice to repair broken HVAC equipment.

LIVE EXAMPLES

http://www.waterfurnace.com/savings_calculator.aspx

QUESTIONS

http://www.waterfurnace.com/contact.aspx