Home Repair forum - Considering Heat Pump, ROI question...

Author

Considering Heat Pump, ROI question...

scowsert@gmail.com

2005-11-10, 3:21 pm

I have a single story 1600sq ft home in the Pacific Northwest, it was
built in 1981. I'm currently looking at replacing my electric furnace
with a heat pump. Gas isn't an option at my home. Up here I'm looking
at heating my home as the primary usage. A/C would be a nice benefit
but really isn't a big deal.

After getting estimates from two heat pump installers they tell me that
it typically takes 4 years for a return of investment. I also heard
that a heat pump is 33 - 50% more efficient then my current setup. They
both gave me estimates between $8000 - $9000 for an install.

So looking at last years bills I spent a total of $1800 on electricity.
I figure to run the basics (hot water, lighting, basically everything
without heat) costs $65 a month. That's my August bill.

So $1800-($65x12) = $1020 on heating.

If I were to save 50% on heating (the high estimate) I'd save $510 a
year.

$8500 for install divided by $510 = 16.6 years for my return of
investment.

I understand there are other benefits (a/c in the summer, better
resale, etc...) but looking at my math it just doesn't make sense to
me. Am I missing something here? Is the 4 year return of investment
marketing b.s.? Or is my math wrong?

I should also add that I have a hot tub that I turn off and on as I use
it. So that $1020 number is high, which would mean my roi should be
even longer!

I really would like to justify the purchase but can't.

Thanks Sage

Brian Attwood

2005-11-10, 4:21 pm

scows...@gmail.com wrote:
> I have a single story 1600sq ft home in the Pacific Northwest, it was
> built in 1981. I'm currently looking at replacing my electric furnace
> with a heat pump. Gas isn't an option at my home. Up here I'm looking
> at heating my home as the primary usage. A/C would be a nice benefit
> but really isn't a big deal.
>
> After getting estimates from two heat pump installers they tell me that
> it typically takes 4 years for a return of investment. I also heard
> that a heat pump is 33 - 50% more efficient then my current setup. They
> both gave me estimates between $8000 - $9000 for an install.
>
> So looking at last years bills I spent a total of $1800 on electricity.
> I figure to run the basics (hot water, lighting, basically everything
> without heat) costs $65 a month. That's my August bill.
>
> So $1800-($65x12) = $1020 on heating.
>
> If I were to save 50% on heating (the high estimate) I'd save $510 a
> year.
>
> $8500 for install divided by $510 = 16.6 years for my return of
> investment.
>
> I understand there are other benefits (a/c in the summer, better
> resale, etc...) but looking at my math it just doesn't make sense to
> me. Am I missing something here? Is the 4 year return of investment
> marketing b.s.? Or is my math wrong?
>
> I should also add that I have a hot tub that I turn off and on as I use
> it. So that $1020 number is high, which would mean my roi should be
> even longer!
>
> I really would like to justify the purchase but can't.
>
> Thanks Sage

Seeing as you would have to assume that all of your electricity is now
used for heating and that the heat pump would not use any electricity
to hit that $9000 savings in 5 year mark, I would say that their roi
estimates were a little "optimistic".

Did they know how much electricity you actually use now before they
made their ROI estimate? Could be that your house is unusually well
insulated or you keep the thermostat set lower than most homeowners
they have worked with. Sounds like you would have to be quite the
aberration though.

Keep in mind that if you start using the air conditioning, your savings
will be even lower.

scowsert@gmail.com

2005-11-10, 5:22 pm

Brian Attwood wrote:
> scows...@gmail.com wrote:
>

> Did they know how much electricity you actually use now before they
> made their ROI estimate?

No they don't ever seem to ask. The 5 year mark seems to be a canned
reply.

> Could be that your house is unusually well
> insulated or you keep the thermostat set lower than most homeowners
> they have worked with. Sounds like you would have to be quite the
> aberration though.

I just don't think thats the case though. I have the thermostat turn
the temp down to 62 during the work day, up to 72 at night between
5-10:00 then down to 62 at night only to fire it up to 72 again at
6:00am to 8:00am. I'm sure I'm not the worse case senerio I'd have to
guess I would be average. I tend to think they are simply spitting out
a number to make me say ok I'll buy your system.

>
> Keep in mind that if you start using the air conditioning, your savings
> will be even lower.

Great point!

Jim McLaughlin

2005-11-10, 8:21 pm

I sure hope you have seen the "I'VE BEEN HAD" thread posted about about
12:05 PM Pacific time on 11/ 10/ 2005 by another Pacific Northwest resident.

There's a guy very not pleased with his brand new $8,000 heat pump.

--
Jim McLaughlin

Reply address is deliberately munged.
If you really need to reply directly, try:
jimdotmclaughlinatcomcastdotcom

And you know it is a dotnet not a dotcom
address.
<scowsert@gmail.com> wrote in message
news:1131649595.644654.272650@g49g2000cwa.googlegroups.com...
> I have a single story 1600sq ft home in the Pacific Northwest, it was
> built in 1981. I'm currently looking at replacing my electric furnace
> with a heat pump. Gas isn't an option at my home. Up here I'm looking
> at heating my home as the primary usage. A/C would be a nice benefit
> but really isn't a big deal.
>
> After getting estimates from two heat pump installers they tell me that
> it typically takes 4 years for a return of investment. I also heard
> that a heat pump is 33 - 50% more efficient then my current setup. They
> both gave me estimates between $8000 - $9000 for an install.
>
> So looking at last years bills I spent a total of $1800 on electricity.
> I figure to run the basics (hot water, lighting, basically everything
> without heat) costs $65 a month. That's my August bill.
>
> So $1800-($65x12) = $1020 on heating.
>
> If I were to save 50% on heating (the high estimate) I'd save $510 a
> year.
>
> $8500 for install divided by $510 = 16.6 years for my return of
> investment.
>
> I understand there are other benefits (a/c in the summer, better
> resale, etc...) but looking at my math it just doesn't make sense to
> me. Am I missing something here? Is the 4 year return of investment
> marketing b.s.? Or is my math wrong?
>
> I should also add that I have a hot tub that I turn off and on as I use
> it. So that $1020 number is high, which would mean my roi should be
> even longer!
>
> I really would like to justify the purchase but can't.
>
> Thanks Sage
>

Joseph Meehan

2005-11-10, 9:21 pm

scowsert@gmail.com wrote:
>I have a single story 1600sq ft home in the Pacific Northwest, it was
> built in 1981. I'm currently looking at replacing my electric furnace
> with a heat pump. Gas isn't an option at my home. Up here I'm looking
> at heating my home as the primary usage. A/C would be a nice benefit
> but really isn't a big deal.
>
> After getting estimates from two heat pump installers they tell me
> that it typically takes 4 years for a return of investment. I also
> heard that a heat pump is 33 - 50% more efficient then my current
> setup. They both gave me estimates between $8000 - $9000 for an
> install.
>
> So looking at last years bills I spent a total of $1800 on
> electricity. I figure to run the basics (hot water, lighting,
> basically everything without heat) costs $65 a month. That's my
> August bill.
>
> So $1800-($65x12) = $1020 on heating.
>
> If I were to save 50% on heating (the high estimate) I'd save $510 a
> year.
>
> $8500 for install divided by $510 = 16.6 years for my return of
> investment.
>
> I understand there are other benefits (a/c in the summer, better
> resale, etc...) but looking at my math it just doesn't make sense to
> me. Am I missing something here? Is the 4 year return of investment
> marketing b.s.? Or is my math wrong?
>
> I should also add that I have a hot tub that I turn off and on as I
> use it. So that $1020 number is high, which would mean my roi should
> be even longer!
>
> I really would like to justify the purchase but can't.
>
> Thanks Sage

They could be figuring the cost difference recovery time. That is they
are assuming you are going to replace what you have anyway and all they are
recovering is the additional cost of a heat pump over the cost of a new
resistance heat furnace.

--
Joseph Meehan

Dia duit

scowsert@gmail.com

2005-11-10, 9:21 pm

Jim McLaughlin wrote:
> I sure hope you have seen the "I'VE BEEN HAD" thread posted about about
> 12:05 PM Pacific time on 11/ 10/ 2005 by another Pacific Northwest resident.
>
> There's a guy very not pleased with his brand new $8,000 heat pump.

Thanks Jim. It sounds like I use my heating system the same way he
does. I'll have to ask them that question.

So how long should it take to heat my home from 62 to 72 degrees with a
heat pump?

>
> --
> Jim McLaughlin
>
> <scowsert@gmail.com> wrote in message
> news:1131649595.644654.272650@g49g2000cwa.googlegroups.com...

Oscar_Lives

2005-11-11, 12:21 am

You forgot to factor in the future value of money, as well as the
opportunity cost. That would help a bit.

<scowsert@gmail.com> wrote in message
news:1131649595.644654.272650@g49g2000cwa.googlegroups.com...
>I have a single story 1600sq ft home in the Pacific Northwest, it was
> built in 1981. I'm currently looking at replacing my electric furnace
> with a heat pump. Gas isn't an option at my home. Up here I'm looking
> at heating my home as the primary usage. A/C would be a nice benefit
> but really isn't a big deal.
>
> After getting estimates from two heat pump installers they tell me that
> it typically takes 4 years for a return of investment. I also heard
> that a heat pump is 33 - 50% more efficient then my current setup. They
> both gave me estimates between $8000 - $9000 for an install.
>
> So looking at last years bills I spent a total of $1800 on electricity.
> I figure to run the basics (hot water, lighting, basically everything
> without heat) costs $65 a month. That's my August bill.
>
> So $1800-($65x12) = $1020 on heating.
>
> If I were to save 50% on heating (the high estimate) I'd save $510 a
> year.
>
> $8500 for install divided by $510 = 16.6 years for my return of
> investment.
>
> I understand there are other benefits (a/c in the summer, better
> resale, etc...) but looking at my math it just doesn't make sense to
> me. Am I missing something here? Is the 4 year return of investment
> marketing b.s.? Or is my math wrong?
>
> I should also add that I have a hot tub that I turn off and on as I use
> it. So that $1020 number is high, which would mean my roi should be
> even longer!
>
> I really would like to justify the purchase but can't.
>
> Thanks Sage
>

trader4@optonline.net

2005-11-11, 4:21 am

"They could be figuring the cost difference recovery time. That is
they
are assuming you are going to replace what you have anyway and all they
are
recovering is the additional cost of a heat pump over the cost of a new

resistance heat furnace."

Exactly. I'd be looking at how long it takes to recover the cost
DIFFERENCE between the various alternatives you have, ie a new electric
only, heat pumps of various efficiencies, etc.

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