Does Switching to Geothermal Heating Make Sense?

So wondering if it would make sense to switch to geothermal heating & cooling…

Tl;dr = probably yes.

To answer this question, I grabbed and cleaned some data from Mass Energy and Environmental Affairs.  Here are the seasonal distributions of oil prices in the Boston area over the past 15 years:

oil-prices
Figure 1. Boston-area seasonal oil prices over the past 15 years. Prices are sampled weekly over the heating season, red lines are medians.

I modeled a few cases based off our oil usage in 1660 sqft and Boston-area oil prices over the past 15 years <insert piles of details & assumptions>.  MassSaves offers 0% 7 year loans and MassCEC offers a rebate.  Including these incentives, here is a snapshot of what the numbers would mean for us over a range of oil prices based on figure 1:

geothermal-vs-oil
Figure 2. Costs of switching to geothermal versus oil heating and AC.

I considered 3 cases given this model, (1) average oil price, (2) highest oil price, and (3) lowest oil price:

  1. If we switch to geothermal, against the 15-yr average oil price of $2.60/gallon we would pay $68 more per month in the first 7 years, and then break even on those extra payments 2.5 years thereafter. After the first 7 years we would only pay $58 monthly and after 9.5 years we would be saving at $194 per month compared to if we had stayed on oil.

  2. Against the maximum oil price of $4.18/gallon (which occurred between 2011-2014), we would save $65 per month in the first 7 years, and break even 1.4 years early. After 7 years we would be saving $327 per month compared to if we had stayed on oil.

  3. On the other end of the spectrum, if oil prices drop to $1.10 per gallon again (prices we haven’t seen since 2001), we would burn an extra $195 per month in the first 7 years and we could see granddoggies to the babies we don’t have yet before we break even in 27.3 years.

Since oil prices are trending upwards and unlikely to return to the lows we saw 15 years ago (considering political climate, falling prices of renewable energy, technology advances relating to energy, etc etc), it looks like switching to geothermal makes The Sense.  The only caveat is that this is so long as we can take on up to $200 per month cashflow out for the next 7 years.

References:

http://www.mass.gov/eea/energy-utilities-clean-tech/home-auto-fuel-price-info/heating-oil-price-surveys.html

http://www.masssave.com/en/residential/heating-and-cooling/offers/heat-loan-program

http://www.masscec.com/get-clean-energy/residential/ground-source-heat-pumps

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