Cost Difference / Performance return for higher SEER rated Heat Pumps
My wife and I are in the early stages of building a combination barn/shop/1300 sf upstairs apartment. Our current plan is to use this as a second home, then build our retirement home on the property in 6-7 years. As we all know, the best laid plans don’t always pan out, so we’re doing our best to walk the fine line between cost savings vs. ensuring the apartment will be a comfortable place to live if something happens and we had to retire there.
The builder has spec’d out separate SEER 13 Heat Pumps for the Shop/Tack room and the upstairs apartment, with separate ducting/returns to avoid contamination of our living space with dust/fumes from the shop. When I ask him about why he chose SEER 13 units, he said lower cost and because it’s a second home and won’t be lived in year round.
I understand the logic, but am wondering… what is the cost vs. efficiency improvement as the SEER value goes up? I’d like to do some back of the napkin math to ensure we’re not locking ourselves into a high energy cost system if a small investment in higher efficiency equipment would pay off in 5-7 years. We plan to use the place at least twice a month and probably more since I can work from anywhere. The house is being built about 45 minutes NW of Chattanooga, TN where the current cost of electricity is around .075 per Kwh.
Thanks for your input.
Terry
Replies
I would go with the builder's recommendation. This is also what I recommended in our earlier conversations on your new place. Usage of twice a month, your payback will be longer than the expected life of the equipment.
OTOH, get an estimate for the cost of more efficient equipment vs the base 13 SEER. Given your cost of electricity and the relative ratings of the equipment, you can estimate how many hous of usage it would take to be a "wash". The number will be large.
Make sure you check your actual utility company for dual metering. Many like mine will put heat pumps on dual meters that can but remotely shut down during a peak emergency. In exchange for giving them the ability to sut off my heat pump in a peak, I pay $.045 per KWH instead of $.11 per kwh.Other things like electric water heaters can also be dual metered. Some places will also do stoves and/or dryers but that varies as I understand it.
During a peak, if they shut it down, your heat pump wouldn't cool your house but the fan would still run. They wouldn't do it during the winter because shutting off the heat pump would actually increase usage because the heat pump is more efficient than the resistance back-up.
Are you going all electric? or natural gas backup?
Home > Cost Difference / Performance return for higher SEER rate
Great idea on the dual meters. I'll check with the local electric co. to see if they have a program. We'll be all electric with a high efficiency wood stove as a primary and backup means of heating.
The hard part is guessing energy costs
The hardest part in my mind right now is guessing the cost of electricity in the future.
Some reports predict it may double or even triple, over the next twenty years. My best guess is an increase in the neighborhood of 2.5% per year.
You'll have to take a guess at what your actual hours of usage will be, and what the power rates will be.
That's the hardest part. The math is pretty straight forward.
Historically, the cost of energy has followed inflation and that averages 3% a year. There are spikes, but on average, you can't be too wrong using the historical average.
I've found that, for rough calculations, it works out well to discount both the inflating cost of fuel/energy and the interest on the investment. So one can simply compare, say, the per year $ savings(uninflated) of a 20-year-lifetime device to 1/20 of the cost of the device -- inflation and interest rougly cancel out.