New Inverter Heat Pumps Worth Their “Salt”… Can Triple Solar PV R.O.I.
By Mike Hamlin
New inverter heat pumps are very different from their early predecessors. The new inverter-driven technology enables the heat pump to transfer heat from the outdoors to the indoors extremely efficiently and reliably at temperatures well below 0º. The use of “intelligent” “smart controls” allows for the heat pump to ramp up and down as needed, thus making the inverter the most efficient heat pump ever produced. So, how can an inverter heat pump triple a PV solar array’s return on investment (R.O.I.)? Let’s do the math.
Let’s take a modest new energy-efficient home of say 1900 sq. ft. with two people living in it. General electrical usage would be approximately 6000kWh annually, including an electric hot water heater. Annual heating BTU’s would be approximately 60,000,000 (60MMBTU).
The new home has been equipped with a ”Net-0” 6kW solar array to cover the annual electrical needs and has a highly efficient 95.5% A.F.U.E propane furnace. Electrical rates in the region are @ 16.3¢/KWH (kilowatt hour) and propane costs are $3.69 per gallon.
A KWH is equal to 3,410 BTU’s. A gallon of propane is equal to 91,500 BTU’s and @ 95.5% A.F.U.E. has 87,383 usable heating BTU’s. Annual electrical cost $ .163/kWh for 6000kWh would be $978.00 which is the R.O.I. of the PV solar array. A recent advertisement for a 6kW solar array was $19,500.00 installed. Federal, state and utility rebates totaled $12,100.00, leaving a net cost of $7,400.00. So, the $978.00 savings divided by the $7,400.00 PV net cost generates a 13.2% R.O.I. or 7.57 year pay-back. The propane furnace on the other hand, will burn 687 gallons of propane to produce 60MMBTU’s at a cost of $3.69 X 687 or $2,535.00 annually.
Now, let’s replace the propane furnace with a 36 MBTU inverter heat pump system. The heat pump transfers heat-using electricity. There are 17,595 kilowatts in 60 MMBTUS. That is 2.93 times what our PV system produces annually. If we were heating with straight electric baseboard or an electric furnace then we would need 17,595kW’s to generate the annual heat needed. That would cost a whopping $2,868.00. But, wait a minute, we’re not generating heat with a heat pump, we’re just moving it from one place to another, so we don’t need anywhere near that much electricity. As a matter of fact, heat pumps can move as much as 4.2 times the heat as the heat value in the amount electric power they use. We however, will be very conservative and will use a 10.3 HSPF adjustment or 3 coefficient of performance (C.O.P.) rather than a 4.2 C.O.P. This is known as the Heating Season Performance Factor (HSPF) .So, let’s divide 17,595kW by a 3 C.O.P. and we only need 5865kW to produce 60MBTU. That’s actually 135kWh less than our PV array produces.
A projected system with PVs powering a heat pump has a 4.21 year payback period and saves $55,454 over 20 years. |
Now, here is the bottom line. We saved $2,535.00 in propane costs using a heat pump. We had 135-kw left over for the general electricity, at a savings of .163 cents x 135 or $22.00. Our total savings are now $2,557.00 or 36% R.O.I , and a 2.89 year pay-back on the PV installation net cost. Additional general electricity cost for the remaining 5865kW needed will cost $955.00, so we are ahead by $1,602.00 with a heat pump compared with a propane furnace. A 12kW PV array would “net-zero” our total electricity usage. So if we spent $14,800.00 for PV’s and our savings were $2,557.00 + $955.00 ($3,512.00) our R.O.I. would be 24%, or 4.21 year pay-back.
In 20 years at today’s prices, we will have saved $55,454.00. Further, 13,740 gallons of propane would be saved along with the energy that would be consumed to produce and transport that much propane over a period of twenty years.
Mike Hamlin is a recognized expert on both solar power and HVAC. He has worked with HVAC for over 40 years, and has logged over 12,000 hours on cutting-edge systems. He has designed and overseen hundreds of installations with heat pumps in many configurations. He also lectures on solar power. He works for Seely Heating, Plumbing, and Air Conditioning in Meredith, NH.
Thanks for the statistical incentive to go solar with heat pump. I hope Wisconsin winters will prove similarly to Vermont’s. I will present this article to my local PV installer. How big and costly is a 6kv solar array? What about constant high mass subfloor resistance heating system with a 6kv solar array?
In a place like New Zealand where we get lots of sun it makes complete sense to go with a solar system. I took the plunge and have never looked back, my savings have been immense. Thanks for taking the time to write this article, great to see others are benefitting from solar too!
Very grateful to you for sharing your figures, we have been looking at investing in an air source heat pump but were unconvinced by the savings as the heat pump is powered by electricity. However I hadn’t thought of have solar PV installed to offset the cost, great article! 🙂
I have really been touched by this analysis Solar VS Inverter Heat Pumps.
I am an enthusiast of alternative energy sources – you have augured my desire to explore more about the topic.
Mr. Hamlin,
You sure do have a way with numbers. Will take me at least several readings to digest all of this. We moved forward with retrofitting our log home with radiant floor, tightened up the place with help from Efficiency Vermont ( we live close to the Canadian border). Installed three solar arrays, 2-4 ton air to water heat pumps, 1000 gallon hot water storage capacity for the hot water heating system, run glycol mix to transfer plates. All this was done by the book, this was not a DIY project license plumbers and electricians did all the work under a consultant. We are net metering and have plenty of power left over, which we will deal with. I am investigating if our heating system somehow qualifies for 2018 federal 30% tax incentives (PV system did). To date I am disappointed in that, our heating system does not seem to qualify. Geothermal and batteries fall under solar thermal, yet this system using heat pumps does not seem to fit the bill. Any thoughts or strategies would be greatly appreciated. We are more than happy with the system. I should also mention that we have a gasification wood boiler and propane boiler for backup. I feel that we have installed a system that does not rely on the grid and at the same time we are reducing our carbon foot print, yet the feds do not seem to want to recognize this fact. From what I have been reading about the solar thermal systems that the feds are supporting, our system seems to surpass on every level of efficiency.
Respectfully,
John D.