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 Juliette. Juliette has a 2,500-square-foot Victorian-era home in Poughkeepsie, NY that runs on heating oil. If Juliette switches to geothermal and pays in cash, we expect her to save over 62 percent on her heating and air conditioning costs per year. If Juliette switches to geothermal and decides to finance her system, we expect her to save over 22 percent on her heating and air conditioning costs per year.
Here’s how we got to those numbers.
Juliette’s 2,500-square-foot house has a 15-year-old furnace running at 75 percent efficiency. Based on her home's size, age, and location, we calculate that it uses about 1,002 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, Juliette spends about $3,512 each year in heating her home. At current electricity prices of roughly 15 cents per kWh, we estimate Juliette will spend around $403 per year on electricity to run the air conditioning. That comes out to $3,915 per year in conventional heating and air conditioning costs.
Now, let’s compare that to the cost of running a Dandelion geothermal system instead. Juliette can choose to pay cash for a Dandelion geothermal system, or finance her system for no upfront cost and low monthly payments over 20 years.
Here’s the cash option: Juliette will pay around $19,030 in cash for a Dandelion geothermal system, in the process totally eliminating her fuel oil and conventional air conditioning bills.
To operate her Dandelion geothermal system, which provides year-round heating and air conditioning in a single unit, Juliette can expect to spend just $128 per month, or $1,480 per year in electricity. That’s a savings of $2,434 per year on heating and air conditioning her home – over 63 percent cheaper than her old conventional systems. Since she paid $19,030 in cash for the geothermal system, she can expect the system to pay for itself in less than eight years.
Now, the financing option: Juliette pays nothing upfront, and $128 per month or $1,542 per year in loan payments on a Dandelion geothermal system. Bundling her monthly loan cost with her normal operating costs (above), Juliette will spend $3,022 per year on her financed geothermal heating and air conditioning. In the process, she’ll get a brand new heating and air conditioning system – and save money doing it. She’ll save $893 per year on heating and air conditioning her home – savings of over 22 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. That year, Juliette spent nearly $5,000 on heating and these savings numbers would be even higher.
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.