Its about payback - Geothermal Alliance of Illinois

141 Pages·2014·2.54 MB·English

by  Bob Dickey

March 11, 2014
Geothermal Alliance of Illinois
It’s All About Payback
By
Paul Bony
Director of Residential Market Development
Payback
• Webster’s
1. To Repay
2. To Retaliate upon…..
Let’s start with the first
definition………
Utility Programs & Payback
• Demand side management (DSM) filters
– Utility cost test
• Does the effort provide a net utility benefit
– Greater revenue or lower cost of service
– Participant cost test
• Does the customer obtain a net financial benefit
– Ratepayer impact test
• Does the effort support lower (or neutral) rates
– Societal Test
• Does the effort reduce emissions, create jobs, etc..
– (cost effectively of course…..)
Participant Cost Test
• Basic GHP Assumptions
– Springfield IL
– 2,000 sq. ft. home (retrofit)
– Average Construction
– 3-15 year old HVAC system
• Forced air furnace with central AC –
– Standard efficiency
– Electric rates –
• $.09 Winter
• $.12 Summer
Participant Cost Test
• Basic Assumptions
– Propane at $2.11 / gallon (really?)
Annual Annual Annual Total
Heating Cooling Hot Water Annual
Cost Cost Cost Cost
Geothermal System $ 556.00 $ 229.00 $ 410.00 $ 1,195.00
Propane with A/C $ 2,564.00 $ 561.00 $ 726.00 $ 3,851.00
($2.11/gallon)
Annual GHP savings $ 2,656.00
Participant Cost Test
• Does the Customer have a payback?
– $ 2,656.00 annual savings vs.
– Incremental GHP Cost
• ? 10,0000
• Less the 30% Federal Tax Credit for GHPs
– GHP life rating of
• Loop – forever
• Equipment 25 +/- years vs. 10-15 for
conventional….
– Today’s energy prices vs. 5–25 years from now.
Participant Cost Test
– What about natural gas users?
Annual Annual Annual Total
Heating Cooling Hot Water Annual
Cost Cost Cost Cost
Geothermal System $ 556.00 $ 229.00 $ 410.00 $ 1,195.00
N gas with A/C $ 1,000.00 $ 561.00 $ 353.00 $ 1,914.00
($1.08/therm ?)
Annual GHP savings $ 719.00
Participant Cost Test
• Does the Customer have a payback?
– $ 719.00 annual savings vs.
– Incremental GHP Cost
• ? 10,0000
• Less the 30% Federal Tax Credit for GHPs
– GHP life rating of
• Loop – forever
• Equipment 25 +/- years
– Today’s energy prices vs. 5–25 years from now?
Participant Cost Test
• CNBC – February 19, 2014
– Natural gas futures spiked on forecasts of
another arctic air blast descending on North
America and unseasonably cold temperatures in
March. March futures soared to settle about 11
percent higher, at $6.149 per million BTUs—a
five-year high. Natural gas is up nearly 44
percent since Jan. 1, "Are we going to $15
again? No; $6 to $7, yes.
Participant Cost Test
– FORBS BUSINESS - 7/22/2012 - We're Headed To $8
Natural Gas
– Combine a 13 year low gas rig count, declining
production levels & ultralow storage injections, … faster
than anticipated shale well declines, persistent switching
from oil and coal to …gas alternatives…..Then consider
unending hotter than normal summer temperatures,
…nuclear plant outages, … and a La Nina induced cold
winter…….any one of these can light the fuse that
pushes the tenuous supply/demand balance into cardiac
arrest. That’s the chain and it’s going to lead us to $8.00
mcf natural gas by the approaching winter.