Heating and Cooling in Wisconsin Followup

This is a follow up article on the results from the Heating and Cooling in Wisconsin article.  The quick analysis in that article seemed to indicate that there would be little savings from using a heat pump assuming a seasonal efficiency rating (HSPF) of 9.  Using an HSPF value of 9 in this analysis is probably a false assumption in a hybrid system because the system would be tuned to provide heat from the gas furnace at lower temperatures and only use the heat pump at moderate temperatures.  Therefore I would expect the the heat pump in a hybrid system to operate a higher HSPF.

An HSPF value of 9 corresponds to a coefficient of performance (COP) of 2.64 (coefficient of performance is the ratio of heat energy delivered by the heat pump to electrical energy consumed by it).  Calculation for this is shown as follows:

cop_val = hspf_val * (1054.804 J / BTU15) / (3600 J / Whr)

In a hybrid system, I would expect the COP to be at least 3.  Assuming the following:

COP of heat pump = 3
Yearly heating therms needed = 680
Cost per therm of gas = $1.19
Cost per kWh of electricity = $0.116
Furnace afue = 92%
Percentage of heat output delivered by heat pump in a hybrid system per year = 0.3 to 0.7

The cost in gas to operate the furnace per year would be about $879.57
The cost in gas and electricity to operate the hybrid system (not counting electricity to run the blower which should be similar to a natural gas only system) would be in the following ranges (gas + electric):
$596.25 + $230.87 to $255.54 + $538.69 or
$872.12 to $794.23 for a savings over a straight natural gas furnace of:
$7.45 to $85.34

The hardest number to estimate based on my research is the percentage of heat output the heat pump is going to deliver per year vs. the furnace in a hybrid system.  Even with a pretty optimistic view of this, the overall savings would only be about $85 per year.  The added cost of a hybrid system over the traditional gas furnace and air conditioner is about $1000.  It is highly unlikely that there would be a return on investment for this kind of outlay with a hybrid system.

The cost savings are a little better for a geothermal system, but the added initial installation cost is much larger.  For a geothermal system with the above assumptions plus these added assumptions:

COP = 4.5 (I don't have an explicit source for this, but I read that this is a reasonable estimate for a geothermal heat pump)
Percentage of heat output delivered by geothermal heat pump = 80% to 100% (in WI a geothermal system likely needs a backup heat source for the coldest days which would probably be straight electric heat)

The cost of electricity per year to operate the geothermal heat pump and backup heat source would be: $508.90 to $869.36 for a savings over a straight natural gas furnace of:
$10.21 to $370.67

Obviously in WI you don't want your backup heat source to be straight electric as that would probably eat up most of the cost savings of having the geothermal in the first place.  So that means you would probably need a backup natural gas furnace anyway.  But lets even assume that you can get the full $370 per year in savings over a high efficiency furnace.  I don't know the exact cost of a geothermal system but I've had it estimated to me at home shows to be about $20,000.  That is probably at least a $14,000 premium over a high efficiency natural gas furnace.  There is no way the $370 in savings per year justifies an additional outlay of $14,000 from a return on investment standpoint.  Even if it made your heating bill go away completely and saved you almost $900 a year it would not be worthwhile.

I left cooling savings out of the examples listed here because in WI only a small percentage of our heating and cooling energy requirements come from cooling so it doesn't affect the numbers much, especially for the hybrid system where you can get a regular air conditioner with the same efficiency as a heat pump for cooling. 

In general I believe that the costs in dollars of these types of things are also indicative of their total cost in resources and environmental impact.  An environmentalist might conclude that geothermal is the best for the environment.  Given the poor rate of return of this system vs. a gas furnace, I would say that there are many hidden environmental impacts of a geothermal system that make it worse than a gas furnace.  Examples would be all the resources required to excavate and lay pipe underground, materials and manufacture for all the pipe, large amount of coolant material, etc.  Economies of scale can solve some of these and as the volumes of these systems go up I would expect the installation costs to come down as well.

I have created a heating and cooling system comparison mathcad sheet that I put together in looking at these numbers.