How to calculate when heat pumps make financial sense (and other heat pump follow-up thoughts)

hello and welcome to technology connextra's the channel where i talk about stuff and don't prepare for anything except today i've made a list of things to talk about wow so some people suggested that it would be a good idea to explain how to calculate the break-even point on a geothermal heat pump or otherwise and so that's what we're gonna do i also have some other thoughts that i want to bring up and then the end but before we start i want to clarify that i recognize 1 000 that a geothermal heat pump is not feasible for the vast majority of people and it was also brought up that one problem that is frighteningly common is that landlords who have offshored the cost of utilities to their tenants don't give at all a care about energy efficiency because it's not their problem which is really stupid and one of the reasons why efficiency regulations kind of need to be a thing because for every person who can turn the energy cost into an externality then they're going to just take the cheapest option to keep their tenants happy and unfortunately it's very bad but setting aside all those problems just to acknowledge that these systems are very expensive up front i really hope that changes one of the things that just seemed absolutely crazy to me was that some of the cost estimates that i was seeing from people seemed to indicate that the actual cost of drilling the well was only like 17 or 20 thousand dollars and the heat pump unit itself was another twenty thousand dollars and that to me is just ridiculous i don't understand why the heat pump components should cost i mean they're gonna cost more than just a general air handler and air conditioner but i mean like the compressors it's the same the some of the footage i use that a patron gave me it's the same compressor that goes into and it may be the very same model that's in the air conditioning compressor that's right outside this room so i don't understand why the inside components should be anywhere near 20 000 like to me the only really special thing is the liquid to refrigerant heat exchanger and those exist for purposes other than just a geothermal heat pump one one um used for that which i didn't even know was the thing until i started following some hvac people on youtube was if you have if you're in a restaurant and say there are beer taps that are far from the room that the beer kegs are in well there's a long line of hose between where the kegs are kept and the uh tap and if you don't have a glycol system which is basically just a loop of coolant going around these lines and back that will warm up and you'll get cold beer at the tap all the time so these restaurants have machines which sit somewhere and refrigerate liquid that then gets pumped around the beer lines to keep it cool and those have the same kind of heat exchanger that you would find in a geothermal heat pump so i really think something to me and i'm a layperson in this regard but something seems wrong about that pricing maybe we just don't have the economies of skill we need yet i don't know but what we really would like to or i would really like to see happen is ground source heat pump technology get a lot cheaper and i think it will but what i actually think is more likely to occur is that air source heat pumps will start to see cops of maybe two or three that are attainable in well below zero conditions so hopefully that happens because that solves if we can do that and the cop only dips below two on a really really cold days then it may not be worth uh actually digging a geothermal well for most people it would solve a lot of problems i hope we can get there there are thermodynamic things that are involved but really if you if um if we managed to find a refrigerant that its boiling point at say 10 psi was minus minus 80 degrees then i don't see why that wouldn't at least give a cop of 2 but i'm no expert i don't claim to be all right how to calculate your breakeven cost um so i'm only going to go over natural gas and propane because they are the only thing i have familiarity with because once you get into like heating fuel i have no idea how those systems work but it's pretty straightforward to figure out what your costs are and the first thing you need to do is to convert the cost of your heating fuel into kilowatt hours or you need to convert however your heating fuel is billed into kilowatt hours in back to cost per kilowatt hour that doesn't sound at all sensical but let's just go through an example natural gas here in the u.s i believe this is standard across the country but it might not be the unit of natural gas that you were billed for is called a therm if that sounds like a dumb made-up unit that's because uh it's a hundred thousand btus which also people have a problem with that unit so it's great but anyway a therm is a hundred thousand btus which i'm going to silence this how about that so a therm which is 100 000 btus is equal to 29.3 kilowatt hours so for every therm that you're getting billed for you're getting 29.3 kilowatt hours worth of energy as fuel now how well can your heating system turn that into heat that's going to vary so you ideally to get a really exact figure will want to know the efficiency of your furnace or boiler my boy or furnace is 95 efficient so for every um 100 btus that gets delivered as a therm 95 sorry every 100 000 btus that get delivered 95 000 btus end up heating my home five thousand btus ends up outside there's a small quibble with that we'll get there so the way that i came to the cost in the chicago area i don't have my own nikkor bill because out here i have propane so uh but i so i had to use a sample nikor bill which i don't know how accurate these numbers really are but that nicor bill worked out to the sample that i saw 62 cents per therm so we go back to one therm is a hundred thousand btus is 29.3 kilowatt hours that costs 62 cents which works out to 2.11 cents per kilowatt hour so when you consider the loss the small loss from a furnace consider it as two and a quarter cents per kilowatt hour now electricity in the chicago area cost just about exactly 10 cents per kilowatt hour if you're on a flat rate plan so that means that gas costs a quarter almost perfectly one quarter that of electricity for the same unit of energy being delivered to your home so to get a heat pump to match the cost of gas it needs to have a cop of four it needs to be quadrupling the amount of energy it is moving for you compared to how much it is consuming so that's how that works now as an example here where i have propane propane is a lot more expensive than natural gas it's more than twice as much in this market so my my cost for propane ends up working out to point or 5.3 cents per kilowatt hour so more than twice that of natural gas at least on that sample bill and usually it's higher than that i just used my last bill which was a dollar 39 a gallon one gallon of propane is 91 330 btus which is equal to 26.766 kilowatt hours so again it's fairly straightforward you need to figure out what is your you need to equate your cost per kilowatt hour of your heating fuel and then compare that to your cost of electricity then you'll know the cop you need to match because if you have say your electricity is 15 cents per kilowatt hour well then you're never gonna get a heat pump to beat the cost of gas if it's only two and a half cents per kilowatt hour but if your gas costs five cents per kilowatt hour and your electricity costs uh 15 cents you only need a cop of three to beat that so if you had a geothermal system and you could nearly all year get a cop of four or better you would save money in the long run but let's be real here it's a huge upfront investment that may not make sense that quibble i was talking about some people have um sent me messages on twitter that their furnace or boiler because it seems like most of these people were in the uk gets greater than 100 efficiency and the reason why they're saying that is because the way efficiency is calculated there the energy you get out of the water condensing is considered free so that's not part of the energy of natural gas i am pretty confident that the a few which is what we measure the efficiency of our heating systems actually 100 includes that condensing energy i'm i'm pretty sure that's true because i've never seen a condensing furnace with an a few over 100 maybe they exist but as far as i know the highest i've ever seen is 98 so i and they are condensing furnaces so i think the a few which is the metric we use in the us does consider the water vapor condensing as part of the available energy i don't know the specifics there but i just wanted to bring that up now here's where this gets even more complicated if you have variable rate pricing which you may do in fact here i do with my electricity then the math becomes completely different and there are ways that you can maximize what makes more sense now again because i have propane here and propane costs twice that of natural gas i i had not done this math or really figured this much out when i had my hvac system replaced here and had i done that i would 100 100 figured out how to get an air source heat pump i would have found some hvac company to do it because as of now i only need to get a cop of two to be paying less than propane for heating and that's attainable quite frankly most of the winter there are gonna be cold snaps where i can't get to cop of two definitely but i would say probably only 30 days of the year would that not be possible and the other thing is because my electric rate is variable that bends what that cop changeover is so on that variable rate plan here in the winter the electric cost is generally always lower than it would normally be there's not much variation when that weather event struck texas though oh boy because we i mean i'm not in texas but the eastern interconnect goes almost that far south so our energy was being shared with a lot of the region that needed more than usual wholesale prices got ridiculous up here there was a time when it was like 60 cents per kilowatt hour which is more than six times higher than typical so that's the danger of wholesale pricing but typically in the winter it's much much lower because most of this region has natural gas heating so electrical demand in the winter is lower than in the summer that may change if everybody gets heat pumps which is important but the other thing is you can smartly run those heat pumps depending on when generation is available if it becomes more expensive you can run them less there's a whole lot of stuff you could do especially if you do have access to both fuels because if i know and my cost of propane also varies depending on what the cost was when i get the tank refilled but if i know that cost and i know what the cop is of the of the heat pump then i can and i know the cost of the hourly rate that can all be configured now that's complex i understand that and that's way more than most people need to be doing so i think it makes most sense to compare it on what most people do which is having a fixed rate for those energy costs but i'm just giving you some more information there and that is why a smart thermostat that was aware of all these things is actually a pretty solid investment if you can set that up because it can literally always be optimizing for your energy cost and hopefully one day energy costs are tied to emissions i i went there this is going to make some people upset but that whole thing about how 71 companies are responsible for 100 companies are responsible for 71 of the emissions they they provide the fuel which we as consumers are burning so it's kind of unfair to me to say that they are the sole reason those emissions exist and if we are going to make it so that the lower emissions technologies cost less to run we either need to get rid of the free externality situation that we are currently in or we need to massively subsidize systems which are lower emissions because if you if you're going to say that the point of use is not a part of the equation i mean i just think that's intellectually dishonest myself next i want to talk about thinking of the variability of energy availability and cost a concept that i might make a whole video about this so i won't discuss it at too much length but everybody talks about energy storage how are we going to get more batteries in more places it's a great question we need to answer that but your house is a battery you have a thermal battery at your disposal just like a water heater is a thermal battery it's not running all the time to keep that water hot it just has to replenish it one thing that i actually do here in the summer is i use the entire house as a thermal battery because i don't run the air conditioning during the day the rates are highest during that time and i have my thermostat program to basically run the air conditioner most of the night so it sets itself to i think it's 66 degrees it might be 65 i'm not sure and then that starts at 10 pm then in the morning at 8 pm the set point goes up to 78. now this house has new enough windows and it's well shaded that no matter how hot it is outside even when it's like 95 degrees the inside temperature only rises by about 10 degrees during the day so i am able to completely eliminate my energy need for air conditioning by over cooling at night and that's not something that's possible for everybody because some homes are not well shaded not as well insulated they're older totally understand but that concept of using your building as a thermal battery is something that i think is worth exploring because say we have especially consider renewable energy if there's a lot of solar on the grid right now and everybody had heat pumps turn them on use that energy get the building warmer over set this or overheat by a couple degrees so that when there's less availability that demand's not there there's a lot of load side management we could be doing that i hope to see us start doing right now i'm doing it myself because with the current energy grid energy at night is very cheap because we have base load capacity we actually have a fair bit of nuclear here in illinois that's just running all the time so once once people go to bed and all those energy sources go away or energy needs go away the cost of energy goes very very cheap so for me i'm able to take advantage of that because this building works as a thermal battery which is great and i wish that that concept gets a little more traction because i think it's it's really powerful and we don't have i don't think many people are paying much attention to it and so to close this out i know we sort of already i started by saying this but my intent here is not to shame people who cannot do these sorts of things especially because there's a lot of people or a lot of situations where you the the person are not the stakeholder and we have like renting is one of those situations if the landlord is responsible for making to providing equipment that functions but they are not responsible for the ongoing operating cost of that equipment they will always take the cheap option because that's in their best interest and they don't care that it harms their tenants that's a problem that's a huge problem and we need to figure out a way to solve it because it in the long run it's going to cost everyone less money the landlord may have a higher upfront cost for putting in the new equipment but you can then have people can more afford rent if you have to think of it in such a cynical way if people's energy bills go down then that means you have a wider pool of tenants that are available to you i kind of hate point painting it that way because then it's like oh i can just charge 50 more uh for the rent but you know that's that's the sort of problem that renting has right now is that if the human being occupying the space is not the stakeholder for that space's equipment or i should say i don't that's not even right if the occupant of the space does not own it and they don't care about its maintenance and things get things get wrong really fast and i recognize that there's millions of people in that situation and it's not their fault that their landlord sucks so i'm not trying to put anyone down for having an inefficient furnace or whatever because yeah i understand it may not make any sense for you to have a have a better technology it does not make sense for me to install a geothermal heat pump because the upfront cost is so high and i have other ways to to manage my energy costs that it it would it would be a feel-good thing not a practical thing and there's value to that but i'm saying right now i'm not trying to poo-poo anybody for not embracing these technologies because i understand you need to be in a privileged position to do that what i hope happens is that policy makers particularly with making air conditioners reversible they pay attention in my opinion there should not be an air conditioner that cannot be a heat pump there are some subtle differences i may have oversold the simplicity of turning an air conditioner into a heat pump there are different things to consider like the compressors may be slightly different uh the expansion valves might be different but i do know because of the fact that uh many ductless mini split systems like what i have in my garage are you know caught the cost shipped to me was about a thousand dollars for that and it has a reversing valve it has an electronic expansion valve probably and it is a fully uh fully featured reversible heat pump so it seems to me as though there should not be a significant price delta between a standard air conditioner which costs a lot more than that mini split did and an air conditioner which can go both directions that's something that needs to be fixed we basically need to remove the ability for unidirectional systems to exist because especially for me with propane right now it would be cheaper for me to run the heat pump a lot of the time and with me having the flexible electrical rate that i do even in the winter if the cop is only two that still might cost less for me than burning propane so that's the sort of stuff that's why i'm making this video i want more people to unders not this video that's why i made the other one i want more people to understand that there is a lot we could be doing with heat pump technology that we're not and i don't know why anybody who's in a climate like mine yes you're going to need some sort of fuel to heat your home during some parts of the year but if you have an air conditioner why would you not also want it to be a heat pump some days of the year it's going to cost you less and if we get our butts in gear it'll cost less because it is the cleaner option that's where i wanted to end this i think yep bye

Channel: Technology Connextras

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Length: 21min 30sec (1290 seconds)

Published: Fri Apr 02 2021