Transcript
Page 1: GeoExchange Economic Considerations

GeoExchange Economic

Considerations

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Presented by:Warren (Trey) Austin,

PE, CEM, CGD, LEED-AP

Geo-Energy Services, LLC

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Agenda

• Basic Design Influences in Cost• Residential Financial Factors• Commercial Financial Factors

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Operational Considerations• Efficiencies of COP and EER are

dependent of EWT from Loop Field

• EWT typically range from 30°F to 100°F

• Typical Operation Pressures are 25 psig to 60 psig

• P/T ports are critical for diagnosis & troubleshooting

• Use qualified/certified professionals for design and/or installation

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Profile Definition

• Both Peak (Btu/hr) and Cumulative (Btu) are required to size commercial systems

• Residential systems can be sized with peak load calculation and bin data

• Must use hourly simulation program– TRACE 700– eQUEST– HAP– Right Suite

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Building Design Consideration• Understanding the daily, monthly,

and annual loading profile– Hotel (5-10pm) – 80% occp 5 days– Residence (5-10pm)- 80% occp 7 day– Office (7:30-6:00)- 5 days

• Resulting Energy Load to GHEX (5000sqft)– 7550’– 8100’– 9200’

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Ground Loop Temperature Profile

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Tfluid = 9600’

Tideal = 32,960’

COPfluid @ 45°F EWT = 3.3

COPideal @ 60°F EWT = 4

EERfluid @ 95°F EWT = 14.1

EERideal @ 70°F EWT = 19.6

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Borefield Input Information• Perform Thermal Conductivity Test to

obtain:– Primary:

• Local Ground Temperature• Formation Thermal Conductivity

– Secondary:• Formation Thermal Diffusivity

• Not Necessary on all projects; generally:– Systems >20,000 ft2 or >30 tons– Can save 15-25% on installation cost

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Site Feasibility

• Do vertical structures interfere with layout?

• Can the GHEX be phased?• Future expansion needs?• What happens if local ground

thermal characteristics are not known?

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Economic Feasibility

• Simple Payback versus Life Cycle Payback– What are the differences?– Simple is net installation cost

divided by the first year utility cost savings

– Life Cycle accounts for several factors over a specific period of time, typically 20 years resulting is more accurate and realistic results

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Economic Feasibility

• Life Cycle Cost Analysis is best way to account for all variables. What are they?– Installation Costs– Maintenance Costs– Utility Rates– Escalation Factors– Cost of Capital– Depreciation 14

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Economic Feasibility

• GHEX installation cost is often 90-100% of installation cost differential

• If TC Test is completed, use information to obtain preliminary installation cost of GHEX

• Eliminate Rule of Thumb when possible

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Integration with Renewables• Integration with other

renewable technologies, mostly:– Solar

Photovoltaic/Geothermal/Wind/Biomass

– Solar Thermal• Enhancing and merging

technologies to maximize performance and reduce combined economic impacts 16

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Residential Economics

• Rebates/Tax Credits – Depend on local utilities

• Special Schedules/Tariffs• Direct Financing Options

– 30% Federal Tax Credit on “System” cost• Must be Energy Star Rated list @

– www.engergystar.gov

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2007 IGSHPA Technical Conference

& Expo

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Project Considerations

• Be aware of Electrical Requirements– GSHP projects typically need more

service• Go from standard 200 amp to 325

amp or 400 amp service• Critical to coordinate with GC or EC• Is 3 phase available, it may reduce

needed amp service?• Is PV integrated into system?

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2007 IGSHPA Technical Conference

& Expo

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Project Considerations

• Know the Equipment Functionality– Water-to-Water– Water-to-Air– Single or 2 Stage– Combination Units

• W-to-W and W-to-A• W-to-A w/dedicated DHW• Multi-Circuit

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Residential Economic Feasibility• Post-ARRA of 2009 LCCA

– Installation cost ranges $12.00 to $22.00 / ft2

• Ducted systems vs. Radiant systems can significantly impact installation cost

• Accessories such as a zone control system, air filtration, etc. can also affect total cost

– Operating costs $0.25 to $0.85 /ft2-yr • Paybacks Average: 2-5 years• Can be immediate to 2 years• Some systems are 6-10 years

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Commercial Economics

• Prefer Life Cycle Analysis over Simple Payback

• Look for 3rd Party Financing Partners for Tax Credits of Non-profit entities– Utilities, ESCOs, Investment firms, or

some Geothermal Companies direct• Natural Gas Prices currently make a

difficult choice on straight energy savings vs. payback – consider other factors

• Can still be competitive for New Construction

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Economic Feasibility

• Installation cost ranges $18.00 to $24.00 / ft2

– Operating costs $0.45 to $0.85 /ft2-yr • Paybacks Average: 7-11 years• Can be immediate to 4 years• Some systems were 12+ years

• Rebates/Tax Credits – Depend on local utilities- special

utility rates– 10% Commercial…..plus…….

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Economic Feasibility

• Rebates/Tax Credits – 5-yr Modified Accelerated Cost-

Recovery System (MACRS)– Bonus Depreciation

• 50% for 2013 (Renewed)• Stipulations and criterion must be met

– www.dsireusa.org/incentives/?State=US&ee=1&re=1

– Click on Corporate Incentives

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Example of Bonus Depreciation and 5-yr MACRSGeneral Contractor

Geothermal HVAC Economics - with 50% Bonus Depreciation (2013)

5,000 Sq. Ft. Class A Office Building - 15 Tons

5000

2/5/2013

$/sqft

Geothermal HVAC Cost: $ 100,000 20

Conventional HVAC Cost: $ 50,000 10

Additional Cost: $ 50,000

Rebate $ - est

Net Additional Cost: $ 50,000

Income Tax Rate: 40% total of federal and state

Energy Credit: 10%

Annual Energy Cost Savings: $ 2,500 $0.50 per square foot in energy and maintenance

Energy Inflation: 3%

Bonus 5 Yr MACR Bonus 5 Yr MACR Added Cash Energy Credit Depreciation Energy Annual Cumulative

Year Deprec % Deprec % Deprec $ Deprec $ Outlay Tax Benefit Tax Benefit Cost Saved Cash Flow Cash Flow

2013 50% 20.00% $ 47,500 $ 9,500 $ (50,000) $ 10,000 $ 22,800 $ 2,500 $ (14,700) $ (14,700)

2014 32.00% $ 15,200 $ 6,080 $ 2,575 $ 8,655 $ (6,045)

2015 19.20% $ 9,120 $ 3,648 $ 2,652 $ 6,300 $ 255

2016 11.52% $ 5,472 $ 2,189 $ 2,732 $ 4,921 $ 5,176

2017 11.52% $ 5,472 $ 2,189 $ 2,814 $ 5,003 $ 10,178

2018 5.76% $ 2,736 $ 1,094 $ 2,898 $ 3,993 $ 14,171

2019 $ 2,985 $ 2,985 $ 17,156

2020 $ 3,075 $ 3,075 $ 20,231

2021 $ 3,167 $ 3,167 $ 23,398

2022 $ 3,262 $ 3,262 $ 26,660

2023 $ 3,360 $ 3,360 $ 30,019

Notes: Simple Payback: 2.0 Yr

Geothermal HVAC system is classified as "Energy Property," which is eligible for bonus and 5 yr MACR depreciation IRR: 39%

Conventional HVAC generally has 39 yr straightline depreciation under tax code and no bonus depreciation

Analysis assumes end of 2013 Geothermal HVAC substantial completion date IRR = Internal Rate of Return on Investment

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Case Study 1:Retrofit Feasibility Study• Existing Facility

– 50,000 ft2

– Built 1970s– Current HVAC – Hodgepodge

• Oil Fired Boilers• Rooftfop DX• Mini Splits

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Case Study 1: Monthly Energy

Consumption

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Case Study 1: Monthly Energy Cost*

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* Worst performing building within building owner’s portfolio

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Case Study 1: Summary

• First Cost Difference: $650,000• Life Cycle Cost Savings: $735,000

(20yr)• Simple Payback: 3.9 yrs• Life Cycle Payback: 5.2 (10% Cost

of Cap.)• IRR: 25.3%• Eco Impact:

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Baseline GeoExchange

CO2 MM lbm/yr 28 20

SO2 kg/yr 65 46

NOx kg/yr 56 39

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Case Study 2

• PSD Facility Services Building

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Case Study 1

• PSD Facility Services Building

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12 Heat Pump Units

Number of Units

25 TonsInstalled Capacity

8,900 ft2Footprint

5,400’Total Feet of Boreholes

300’Depth

18Total Number of Boreholes

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Case Study 2

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Case Study 2

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Case Study 2

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Case Study 2

• PSD Facility Services Building

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Operation and Performance E-Star Benchmark Actual

Score 75 99Energy Intensity:

Site (kBtu/ft2-yr)Source (kBtu/ft2-yr)

47135

2570

Emissions:CO2 (1000 lbm/yr)

SO2 (1000 lbm/yr)

NOx (1000 lbm/yr)

56833

29521

Energy Cost:Annual ($)

Annual ($/ft2-yr)$6,519.89

$0.77$3,391.58

$0.40*

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2007 IGSHPA Technical Conference

& Expo

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Questions?


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