Upgrading your home from a conventional heating and air conditioning system to geothermal gives you some powerful benefits: Geothermal is safer, quieter, more energy-efficient, and helps you reduce your home’s carbon footprint.
Today, we want to put those benefits aside and focus on one: Saving money. Millions of homeowners in the Northeast will save money on their annual heating and air conditioning bills by switching to geothermal.
We recently used Dandelion’s software to calculate the savings for a sample homeowner, who we’ll call Randall. Randall has a 2,500-square-foot Victorian-era home in Buffalo, NY that runs on heating oil. If Randall switches to geothermal and pays in cash, we expect him to save nearly 70 percent on his heating and air conditioning costs per year. If Randall switches to geothermal and decides to finance his system, we expect him to save 33 percent on his heating and air conditioning costs per year.
Here’s how we got to those numbers.
Randall’s 2,500-square-foot house has a 15-year-old furnace running at 75 percent efficiency. Based on his home’s size, age, and location, we calculate that it uses about 1,084 gallons of fuel oil per year for heating. At the current price of of $3.41 per gallon, plus the operating costs of a fuel oil furnace, Randall spends about $3,777 each year on heating his home. At current electricity prices of roughly 15 cents per kWh, we estimate Randall will spend around $309 per year on electricity to run the air conditioning. That comes out to $4,086 per year in conventional heating and air conditioning costs.
Now, let’s compare that to the cost of running a Dandelion geothermal system instead. Randall can choose to pay cash for a Dandelion geothermal system, or finance his system for no upfront cost and low monthly payments over 20 years.
Here’s the cash option: Randall will pay around $17,383 in cash for a Dandelion geothermal system, in the process totally eliminating his fuel oil and conventional air conditioning bills.
To operate his Dandelion geothermal system, which provides year-round heating and air conditioning in a single unit, Randall can expect to spend just $1,270 per year in electricity. That’s a savings of $2,816 per year on heating and air conditioning his home – nearly 70 percent less expensive than his old conventional systems. Since he paid $17,383 in cash for the geothermal system, he can expect the system to pay for itself in about six years.
Now, the financing option: Randall pays nothing upfront, and $121.54 per month or $1,459 per year in loan payments on a Dandelion geothermal system. Bundling his monthly loan cost with his normal operating costs (above), Randall will spend $2,728 per year on his financed geothermal heating and air conditioning. In the process, he will get a brand new heating and air conditioning system – and save money doing it. With financing, Randall will save $1,358 per year on heating and air conditioning his home – savings of 33 percent at no up-front cost.
It’s important to remember that the prices of fuel oil fluctuate, and were as high as $4.40 per gallon in New York state as recently as 2014. When you compare Dandelion geothermal to heating with oil at those prices, the savings are even greater.
See if your home is eligible for a Dandelion Home Geothermal System here. If it is, we look forward to calculating savings for your home.