Geothermal Alliance of Illinois

Transcription

1 Geothermal Alliance of Illinois

2 GREETINGS! Will Lange, Director Utility Development WaterFurnace International

3 SURPRISING FACTS FROM ILLINOIS Des Plaines is home to the first McDonald's. Dixon is the boyhood home of President Ronald Reagan. The state motto is: State Sovereignty, National Union Anonymous from Desoto says: Installed my system a year ago. Last year it saved me $2630. I am a happy camper. My local electric Co-Op says my monthly bills will now be $131. Not bad for living in a 1890s Victorian home. Phil Sader from Evergreen Park says: Most friends and even our General Contractor were skeptical. After being in our house during the heat wave we are experiencing in Chicago they are all impressed with the even, efficient and comfortable output. Can\'t wait for the winter! Anonymous from Golden says: I've had geo in my home since 1980, and wouldn't even consider anything else. Jennifer Doedtman from Beecher City says: Geothermal is a great investment. We installed a system that will also do floor heat for the basement. Very comfortable heating and cooling. Anonymous from eureka says: I can't believe it, it actually works!

4 ntent/lets-all-go-go-geo

5 Transforming the Geothermal Market By Removing the Biggest Barrier

6 THE BIGGEST BARRIER Initial Cost is the single most important factor that drives this ratio: 8,000,000 : 100,000 or 80 : 1 Air Source : Ground Source

7 THE BIGGEST BARRIER If the price was the same, wouldn t most folks choose a system that that lasts longer and saves them cash? A lot of cash

8 PROPOSAL: Utility INVESTMENT in Loop Fields to create stronger businesses with higher cash flow and more durable assets. And save on peak load eliminate negative cash flow for rebates and help their customers and earn RECs and save on monthly payments to G&T s and stabilize base load and defer capital expense

9 BUT ASK YOURSELF THIS

10 Long term success requires all parties benefit. So, we have to make sure everyone wins.

11 CONVERTING EFFICIENCY INTO WEALTH The key to unlocking energy efficiency is making it financially beneficial to all parties. We convert efficiency into wealth for all stakeholders: Utilities Homeowners Contractors Taxpayers

12 PROPOSAL Utilities Provide Geothermal Loop Fields to Their Customers to: Create Cash Flow Grow their Asset Portfolios Shave Peak Loads Grow Net Sales Improve Demand Response and Load Shedding Earn REC s Improve Customer Experiences Dramatically

13 VALUE MAP: UTILITIES Utility Owned Loop Field Easements Create: Deferred Capital Expense for Added Capacity Peak Load Reductions ( KW/Ton) Off-Peak Load Growth Diversified and Ultra Durable Asset Portfolio Zero maintenance Cash flow from fixed or variable tariffs for over 100 years Economies-of-scale in drilling activities Tax advantages from accelerated loop depreciation Renewable Energy Credits Improved Balance Sheets by turning cash rebates into investments EQUITY

14 UTILITY IMPACT Here are some typical Residential Load Profiles Before & After Installing GSHPs Blue Lines are only representative samples based differences in typical equipment power usage and seasonal regional heating & cooling hours

15 FOR EXAMPLE Utility Business Case: Developing Loop Fields for Ground Source Heat Pumps Existing Costs Cost to Serve per KW/Month $ 8.00 KW per Home 6.0 Cost to Serve per Home/Year $ Typical Home HVAC Size 3.0 Existing HVAC EERb (95/80/67) 10 Typical Peak Ambient Temperature 110 Peak Ambient EER 8.86 Air Source Alternative with Incentives Rebate for High Efficiency Air Source $ (Use tonnage from Typical Home above) High Efficiency EERb (95/80/67) 12.5 (AC=13.0 / HP= 12.5 / Var Spd = 9.0) Peak Ambient EER Reduction in Peak Load KW 0.72 Reduced Cost to Serve per Home $ Net Annual Cash Flow Past Year One $ Ground Source HP Alternative Wholesale Loop Field Cost for Typical Home $ 5, (Use tonnage from Typical Home above) Typical GHP Peak Load EER 42 Monthly Loop Tariff (If Desired) $ Reduction in Peak Load KW 3.21 Reduced Cost to Serve per Home $ Net Annual Cash Flow Past Year One $ Discount Rate for Net Present Value 3% Ground Source HP High Efficiency Air Source $8,000 $6,000 $4,000 $2,000 $- $(2,000) $(4,000) $20,000 $18,000 $16,000 $14,000 $12,000 $10,000 $8,000 $6,000 $4,000 $2,000 $- $ (1,877) $ 524 $ 2,595 $ 4,382 $ (33) $ 0 Net Present Value 5 Years 10 Years 15 Years 20 Years 25 Years 30 Years Ground Source HP High Efficiency Air Source Ground Source HP High Efficiency Air Source 5,923 $ 7,253 $ 0 $ 0 $ 0 $ 0 Net Present Value 5 Years 10 Years 15 Years 20 Years 25 Years 30 Years Cumulative Cash Flow $

16 PAYING FOR ITSELF

17 VALUE MAP: HOMEOWNER 30% to 50% Lower Annual Energy Costs 30% Federal Tax Credit Typically LOWER First Cost Than Air Source with Utility Owned Loop Field Improved Comfort: Multi-stage Variable Speed Airflow Variable Speed Compressors Hydronics, Zoning, Hybrids, Passive Solar Combination Increased System Lifecycle from 12 Years to 25+ Quieter Operation Free Hot Water

18 VALUE MAP: HOMEOWNER Cost to Homeowner Typical Geothermal Installation Loop Drilling & Installation $ 16,000 Equipment & Installation $ 12,000 Less Typical Rebate $ (400) Less Federal Tax Credit $ (8,400) Total $ 19,200 *Typical payback period ranges from 3-7 years

19 VALUE MAP: HOMEOWNER Cost to Homeowner Typical Air Source Installation Equipment & Installation $ 9,000 Less Typical Rebate $ (200) Total $ 8,800

20 VALUE MAP: HOMEOWNER Cost to Homeowner with a Utility Partnership Typical Geothermal Installation Loop Drilling & Installation $ - Equipment & Installation $ 12,000 Less Typical Rebate $ - Less Federal Tax Credit $ (3,600) Total $ 8,400

21 VALUE MAP: HOMEOWNER Cost to Homeowner with a Utility Partnership Loop Drilling & Installation Equipment & Installation Less Typical Rebate Less Federal Tax Credit Total Geothermal $ - $ 12,000 $ - $ (3,600) $ 8,400 Air Source $ - $ 9,000 $ (200) $ - $ 8,800 and geothermal lasts more than twice as long, so life cycle cost is? and in that GSHP lifecycle, the utility incented how many air source systems?

22 VALUE MAP: HOMEOWNER 30% to 50% Lower Annual Energy Costs 30% Federal Tax Credit Typically LOWER First Cost Than Air Source with Utility Owned Loop Field Improved Comfort: Multi-stage Variable Speed Airflow Variable Speed Compressors Hydronics, Zoning, Hybrids, Passive Solar Combination Double the System Lifecycle from 12 Years to 25+ Quieter Operation Free Hot Water

23 VALUE MAP: SUMMARY The Electrical Utility The Homeowner The Loop Contractor The HVAC Contractor Lower Cost-to-Serve by 20% to 40% Diversified Asset Portfolio: Long Term, No Maintenance 100+ Year Cash Flow Improved Member Benefit Real Peak Load Reductions Off-Peak Load Growth Renewable Energy Credits Eliminate Costly Rebates 30% to 50% Lower Energy Costs Improved Comfort with Multi-stage & Variable Speed Systems Increased System Lifecycle from 12 Years to 25+ Standardized Work Packages Lower Overhead Longer Range Work Scheduling Increased Asset Utilization Reliable Partnerships Increased Replacement Opportunities High Quality Work Opportunities Stable, 4-Season Work Reliable Partnerships Happy Customers

24 SOUNDS GOOD, BUT DOES IT WORK? REALLY? Yup Today in Oklahoma and New Mexico, utilities are making this work. Other states are piloting programs now. At an expense of $1MM to defer $1B in CAPEX for 50MW of coal, it s looking pretty good. Homeowners are diggin it. Watch out for: Regional differences; What s important to your utility? Cost of peaking Off peak loads Net Annual Sales Program Management Cost of CO 2, NOx SOx, etc, remediation

25 WHAT CAN YOU DO? Be ready to explain how everyone profits from utility owned loop fields. Build strong relationships with your coops and other utilities. Share the concept of investing in easements versus giving away cash

26 FOR MORE INFO: Will Lange, Director Utility Development WaterFurnace International (260)