7 ms·

It's the opposite for me, much bigger ROI on the heatpump than solar. Rural property, 10 years old, ~3,500 sq ft + basement, in Canada where summer can be above

by glxxyz 11mo ago

It's the opposite for me, much bigger ROI on the heatpump than solar. Rural property, 10 years old, ~3,500 sq ft + basement, in Canada where summer can be above 30C (86F) and winter below -30C (-20F). Electricity costs (Canadian) 7.6 ¢/kWh off-peak and 15.8 ¢/kWh on-peak here. I spent C$40K (about US$30k) on a ground source aka 'geothermal' heat pump to replace furnace powered by propane tank. I kept propane for on-demand hot water and whole house generator. I have no options for utilities other than electricity. A couple of years later I spent another C$40k for a 20kW rooftop solar system, with net metering and no battery. Net metering was critical for getting any return at all. A battery is next to useless here- I generate almost all of my solar electricity in May-Oct but use the majority of it in Nov-April. Net metering lets me 'store' excess from summer and use it in winter. Annual costs: Before: C$8,000+ propane (heating + hot water) C$2,500 electricity (cooling + misc) $10,500 total With C$40k investment in geothermal heatpump: C$4,500 electricity (heating + cooling + misc) C$500 propane (hot water) C$5,000 total. With heatpump and then C$40k investment in rooftop solar: C$2,000 electricity (heating + cooling + misc) C$500 propane (hot water) C$2,500 total. So I'm seeing about C$8k/yr saving for C$80k investment. The heatpump saved me over $5k a year and the solar about $2,500 a year. The heatpump has pretty much paid for itself after 5 years, the solar will take at least 15 years (unless prices go way up) although should eventually see some return 15-20 years out. In reality it might have cost even more than that to heat with propane. On the propane furnace we barely heated in winter, burned a lot of firewood to make part of the house livable. I'm trying estimate how much it would cost to heat the house to a comfortable 20C (68F) although the thermostat now with the heatpump is set to 22C (72F) in winter so there's an improvement in comfort as well as the ROI.

mattmaroon 11mo ago
Solar in northernly climates is still not practical. (I’m Canada adjacent.)
- glxxyz 11mo ago
  People told me that, but I did the calculations myself and the impact on my energy bills is real. Net metering is essential though, so not everyone can do it. Compared to say SoCal I generate 2/3 as much per year, much less evenly- a lot more in summer than winter, whereas further south there's less variation year round. Cooler temperatures improve solar panel efficiency too. There are online solar potential calculators if you want to compare for yourself.
  - mattmaroon 11mo ago
    Right, but you have to compare it to the opportunity cost of the money. A solar panel is an annuity. There is a one time sunk cost for a relatively consistent, long-term payout. If I put $100 into the stock market in approximately seven years I will have $200. If I put $100 into solar panels, in 10 or 15 years, I will have $100 worth of savings. Financially, it is not much better than just putting it under a mattress. I get that the non-economic parts of solar are pretty much all upside. I’m not saying nobody should do it. Just that they should view it as a luxury, not an economic opportunity. But until the finances work out, it will not achieve widespread adoption, and the finances are a function of how much sun you have and your energy prices. Those of us up north have little sun and lower energy prices. We would be a lot better off just putting your money in the stock market and paying for your electricity if you were only considering money. That is not true of the American southwest. I have homes in both Phoenix and Cleveland and I have done the math on both. I actually can’t put solar in Phoenix, I wish I could, it would be a great investment. I could put solar in Cleveland, but I might as well throw my money down the drain. I can’t imagine the math is any better in Canada.
    - glxxyz 11mo ago
      > I can’t imagine the math is any better in Canada. I don't have to imagine, I've actually installed it and I can see the impact on my bills. By most estimates it has a 12-15 year ROI that matches the stock market, and will continue to generate electricity for another 10-15 years after that. The 'math' is a function of many things: orientation, roof angle, occlusion, installation costs, electricity cost, latitude, grants/loans, net metering terms, etc. It's a huge assumption to say that what doesn't work in one location in Cleveland won't work for a property in Canada 2 degrees further north.
      - mattmaroon 11mo ago
        It does not match the stock market in any locale in the US. Artificial externalities may make it do so (government incentives, exorbitant energy rates) in Canada, in which case ok great. But I think you’re probably doing your math wrong. I’m guessing you’re not counting the fact that if you buy a stock for $100 you still have the $100 (you can sell the stock) but that’s not true of solar because it’s an asset whose value quickly goes to near $0 as the cost of uninstalling the panels is more than they are worth or nearly so. You’d have to be getting near 20% ROI annually for it to match the stock market in that time frame. A quick google shows that even the Canadians selling solar don’t claim that. You don’t even get that in California, where the panels produce a multiple of what yours will and all of the other factors (incentives, latitude, high energy prices and net metering, etc.) lean toward solar so I’m guessing you’re erring. Easy to verify though: what was your install cost and how much is it saving you on energy bills?
- laurencerowe 11mo ago
  Most of Canada isn’t very far north, Toronto is on the same latitude as Marseille. It’s just very cold in the winter.
  - Epa095 11mo ago
    Most of Canada is quite north, but that most of Canadians are not far north ;-)
- reppap 11mo ago
  You can break even on solar panels in 10-15 years in Sweden where I live and we're pretty damn northerly.
  - SoftTalker 11mo ago
    In the US, most people don't live in one house that long.
    - Marsymars 11mo ago
      That should be a wash with the value that a house gets sold for.
      - SoftTalker 11mo ago
        Yes and no. A house's value is largely based on the price of other comparable houses in the area that have recently sold. It's very possible to "overimprove" a house and you will not recoup those costs when you sell. Whether the furnace is brand new or 10 years old will have a negligible impact on the selling price.
  - mattmaroon 11mo ago
    Right, that’s a bad financial investment. If I put $100 in the stock market, in 10 to 15 years, I will have $200 to $300, on average. If I put $100 into solar panels, in 10 or 15 years, I will have break even.
danielsju6 11mo ago
For me it helped with the ROI because I couldn't go any larger than a 6kw array due to roof shape/exposure. Only roof mounted solar is permitted in my community :/ So a ductless saved us energy in the summer months vs. window units, so I could bank more with net metering when the sun was shining.
EgregiousCube 11mo ago
Excellent data, thanks! Net metering does look necessary for economics. Have you factored in relative replacement/maintenance costs for the geo pump vs furnace? Also curious how much your investment was discounted thanks to tax subsidies.
- glxxyz 11mo ago
  There was a C$7k government grant at the time for the heatpump, which roughly matched the tax. The current Ontario solar grant is weird- it only applies to battery systems without net-metering. They also offered a 10-year interest free loan though so I took that, improves the ROI a little. I think battery systems do make more sense for people who are further sound and using more electricity at the time of year that they are generating it. The solar sales people estimated a 10-year ROI but they had to include a pretty high annual energy cost increase in their calculations (I think 8%/year), I estimated more like 15 years. I didn't really consider replacement, by all reports the WaterFurnace pump should last 25-30 years and the propane furnace was probably 5 years old so would have lasted about the same. I would think that the WaterFurnace costs a little more to replace, maybe a winter's worth of propane. Several people told me that ground source heat pumps were too expensive, but years later it still feels like the best investment I've ever made, the gentle heating and cooling is more comfortable too. Anyone with enough space who has to have fuel delivered (propane, oil, etc.) should seriously consider it.
caminante 11mo ago
I'm jealous of the learning and hobby project. Though, the returns are (edit: "not great") if the figures above INCLUDE net metering revenues. Heatpump = Negative IRR until y8 Solar = Negative IRR until y16 Heatpump + Solar = 0 NPV through y25 | 8% discount rate
- Reason077 11mo ago
  Looks pretty good to me over 25 years. Not many safe/guaranteed investments that will reliably return 8% these days. And as utility rates will no doubt rise over time, savings in future years will be greater.
  - glxxyz 11mo ago
    Yes the people selling solar systems all factor in aggressive future electricity increases, it's best to also see how it looks with more conservative rate increases. By my calculation in a reply above with the interest free solar loan it's an 8% return over 14.3 years.
    - Ekaros 11mo ago
      Which to me is funny, when the electricity prices will clearly not rise when there is solar energy production from said panels. But might in other times.
      - glxxyz 11mo ago
        I think the argument is that on average people are buying heat pumps and EVs faster they are installing solar panels but it’s not completely convincing though, power stations can be added. Further north where I am solar can only ever be a small component of total electricity generation due to the dark snowy cloudy winter months with close to zero solar generation for weeks on end.
      - adrianN 11mo ago
        Batteries for load shifting a few hours mitigate that quite a bit and are getting cheaper fast.
db48x 11mo ago
Err, be careful. You made these improvements sequentially, not independently. Each one halved your costs and might still have done exactly that if done in the opposite order.
- bell-cot 11mo ago
  Look closer. How could his 20kW rooftop solar electricity have halved his initial monthly costs, when >3/4 of those costs were for propane heating fuel? (Vs. <1/4 for electricity.)
dns_snek 11mo ago
> Net metering lets me 'store' excess from summer and use it in winter FYI net metering is unsustainable for the grid and policies will probably change (reducing rates for energy, increasing rates for delivery fees to offset the "freebies") as soon as adoption reaches a critical mass.
- glxxyz 11mo ago
  I’m not sure what you mean by ‘unsustainable’ nor ‘critical mass’ here. Of course not everyone can net meter- on a sunny but mild day with no-one using A/C nor heating and everyone contributing back to the grid it doesn’t work. My local utility is well aware of that, applications for permits to net meter have to be made, and only a fraction (something like 15%) of properties in each area can net meter. Also the government is aware and there are no grants for net metering, only for battery systems. I’m giving details about my personal system for one property in one location, not in any way making a statement about what works for anyone else.
  - dns_snek 11mo ago
    Sorry, I should've been more specific, I can explain. > My local utility is well aware of that, applications for permits to net meter have to be made, and only a fraction (something like 15%) of properties in each area can net meter. Okay, that changes things. The way it worked here is that anyone in the country could install solar and get grandfathered into net metering (perpetually), and then at a certain point they decided to cut it off completely. So you have people from before with who have net metering, and anyone installing it later doesn't have it. People would install 10-20kW worth of solar, overproduced massive amounts of energy in the summer and then in coldest part of winter (with heat pump COP dropping below 2), people expected to draw 4-10kW of power for heating and pay close to nothing all year round. The government decided that this was unsustainable so they changed the distribution rates. In effect anyone who doesn't have solar pays roughly the same as they did before, but anyone who has net metering pays substantially more than they thought they would when they signed up. Ultimately I think this is fair but many people felt cheated by this change. I'm assuming the same could happen elsewhere so I wanted to warn others who might be looking at net-metering deals that look "too good to be true".

by glxxyz 11mo ago

mattmaroon 11mo ago

Solar in northernly climates is still not practical. (I’m Canada adjacent.)

glxxyz 11mo ago
People told me that, but I did the calculations myself and the impact on my energy bills is real. Net metering is essential though, so not everyone can do it. Compared to say SoCal I generate 2/3 as much per year, much less evenly- a lot more in summer than winter, whereas further south there's less variation year round. Cooler temperatures improve solar panel efficiency too. There are online solar potential calculators if you want to compare for yourself.
- mattmaroon 11mo ago
  Right, but you have to compare it to the opportunity cost of the money. A solar panel is an annuity. There is a one time sunk cost for a relatively consistent, long-term payout. If I put $100 into the stock market in approximately seven years I will have $200. If I put $100 into solar panels, in 10 or 15 years, I will have $100 worth of savings. Financially, it is not much better than just putting it under a mattress. I get that the non-economic parts of solar are pretty much all upside. I’m not saying nobody should do it. Just that they should view it as a luxury, not an economic opportunity. But until the finances work out, it will not achieve widespread adoption, and the finances are a function of how much sun you have and your energy prices. Those of us up north have little sun and lower energy prices. We would be a lot better off just putting your money in the stock market and paying for your electricity if you were only considering money. That is not true of the American southwest. I have homes in both Phoenix and Cleveland and I have done the math on both. I actually can’t put solar in Phoenix, I wish I could, it would be a great investment. I could put solar in Cleveland, but I might as well throw my money down the drain. I can’t imagine the math is any better in Canada.
  - glxxyz 11mo ago
    > I can’t imagine the math is any better in Canada. I don't have to imagine, I've actually installed it and I can see the impact on my bills. By most estimates it has a 12-15 year ROI that matches the stock market, and will continue to generate electricity for another 10-15 years after that. The 'math' is a function of many things: orientation, roof angle, occlusion, installation costs, electricity cost, latitude, grants/loans, net metering terms, etc. It's a huge assumption to say that what doesn't work in one location in Cleveland won't work for a property in Canada 2 degrees further north.
    - mattmaroon 11mo ago
      It does not match the stock market in any locale in the US. Artificial externalities may make it do so (government incentives, exorbitant energy rates) in Canada, in which case ok great. But I think you’re probably doing your math wrong. I’m guessing you’re not counting the fact that if you buy a stock for $100 you still have the $100 (you can sell the stock) but that’s not true of solar because it’s an asset whose value quickly goes to near $0 as the cost of uninstalling the panels is more than they are worth or nearly so. You’d have to be getting near 20% ROI annually for it to match the stock market in that time frame. A quick google shows that even the Canadians selling solar don’t claim that. You don’t even get that in California, where the panels produce a multiple of what yours will and all of the other factors (incentives, latitude, high energy prices and net metering, etc.) lean toward solar so I’m guessing you’re erring. Easy to verify though: what was your install cost and how much is it saving you on energy bills?
laurencerowe 11mo ago
Most of Canada isn’t very far north, Toronto is on the same latitude as Marseille. It’s just very cold in the winter.
- Epa095 11mo ago
  Most of Canada is quite north, but that most of Canadians are not far north ;-)
reppap 11mo ago
You can break even on solar panels in 10-15 years in Sweden where I live and we're pretty damn northerly.
- SoftTalker 11mo ago
  In the US, most people don't live in one house that long.
  - Marsymars 11mo ago
    That should be a wash with the value that a house gets sold for.
    - SoftTalker 11mo ago
      Yes and no. A house's value is largely based on the price of other comparable houses in the area that have recently sold. It's very possible to "overimprove" a house and you will not recoup those costs when you sell. Whether the furnace is brand new or 10 years old will have a negligible impact on the selling price.
- mattmaroon 11mo ago
  Right, that’s a bad financial investment. If I put $100 in the stock market, in 10 to 15 years, I will have $200 to $300, on average. If I put $100 into solar panels, in 10 or 15 years, I will have break even.

danielsju6 11mo ago

For me it helped with the ROI because I couldn't go any larger than a 6kw array due to roof shape/exposure. Only roof mounted solar is permitted in my community :/ So a ductless saved us energy in the summer months vs. window units, so I could bank more with net metering when the sun was shining.

EgregiousCube 11mo ago

Excellent data, thanks! Net metering does look necessary for economics. Have you factored in relative replacement/maintenance costs for the geo pump vs furnace? Also curious how much your investment was discounted thanks to tax subsidies.

glxxyz 11mo ago
There was a C$7k government grant at the time for the heatpump, which roughly matched the tax. The current Ontario solar grant is weird- it only applies to battery systems without net-metering. They also offered a 10-year interest free loan though so I took that, improves the ROI a little. I think battery systems do make more sense for people who are further sound and using more electricity at the time of year that they are generating it. The solar sales people estimated a 10-year ROI but they had to include a pretty high annual energy cost increase in their calculations (I think 8%/year), I estimated more like 15 years. I didn't really consider replacement, by all reports the WaterFurnace pump should last 25-30 years and the propane furnace was probably 5 years old so would have lasted about the same. I would think that the WaterFurnace costs a little more to replace, maybe a winter's worth of propane. Several people told me that ground source heat pumps were too expensive, but years later it still feels like the best investment I've ever made, the gentle heating and cooling is more comfortable too. Anyone with enough space who has to have fuel delivered (propane, oil, etc.) should seriously consider it.

caminante 11mo ago

I'm jealous of the learning and hobby project. Though, the returns are (edit: "not great") if the figures above INCLUDE net metering revenues. Heatpump = Negative IRR until y8 Solar = Negative IRR until y16 Heatpump + Solar = 0 NPV through y25 | 8% discount rate

Reason077 11mo ago
Looks pretty good to me over 25 years. Not many safe/guaranteed investments that will reliably return 8% these days. And as utility rates will no doubt rise over time, savings in future years will be greater.
- glxxyz 11mo ago
  Yes the people selling solar systems all factor in aggressive future electricity increases, it's best to also see how it looks with more conservative rate increases. By my calculation in a reply above with the interest free solar loan it's an 8% return over 14.3 years.
  - Ekaros 11mo ago
    Which to me is funny, when the electricity prices will clearly not rise when there is solar energy production from said panels. But might in other times.
    - glxxyz 11mo ago
      I think the argument is that on average people are buying heat pumps and EVs faster they are installing solar panels but it’s not completely convincing though, power stations can be added. Further north where I am solar can only ever be a small component of total electricity generation due to the dark snowy cloudy winter months with close to zero solar generation for weeks on end.
    - adrianN 11mo ago
      Batteries for load shifting a few hours mitigate that quite a bit and are getting cheaper fast.

db48x 11mo ago

Err, be careful. You made these improvements sequentially, not independently. Each one halved your costs and might still have done exactly that if done in the opposite order.

bell-cot 11mo ago
Look closer. How could his 20kW rooftop solar electricity have halved his initial monthly costs, when >3/4 of those costs were for propane heating fuel? (Vs. <1/4 for electricity.)

dns_snek 11mo ago

> Net metering lets me 'store' excess from summer and use it in winter FYI net metering is unsustainable for the grid and policies will probably change (reducing rates for energy, increasing rates for delivery fees to offset the "freebies") as soon as adoption reaches a critical mass.

glxxyz 11mo ago
I’m not sure what you mean by ‘unsustainable’ nor ‘critical mass’ here. Of course not everyone can net meter- on a sunny but mild day with no-one using A/C nor heating and everyone contributing back to the grid it doesn’t work. My local utility is well aware of that, applications for permits to net meter have to be made, and only a fraction (something like 15%) of properties in each area can net meter. Also the government is aware and there are no grants for net metering, only for battery systems. I’m giving details about my personal system for one property in one location, not in any way making a statement about what works for anyone else.
- dns_snek 11mo ago
  Sorry, I should've been more specific, I can explain. > My local utility is well aware of that, applications for permits to net meter have to be made, and only a fraction (something like 15%) of properties in each area can net meter. Okay, that changes things. The way it worked here is that anyone in the country could install solar and get grandfathered into net metering (perpetually), and then at a certain point they decided to cut it off completely. So you have people from before with who have net metering, and anyone installing it later doesn't have it. People would install 10-20kW worth of solar, overproduced massive amounts of energy in the summer and then in coldest part of winter (with heat pump COP dropping below 2), people expected to draw 4-10kW of power for heating and pay close to nothing all year round. The government decided that this was unsustainable so they changed the distribution rates. In effect anyone who doesn't have solar pays roughly the same as they did before, but anyone who has net metering pays substantially more than they thought they would when they signed up. Ultimately I think this is fair but many people felt cheated by this change. I'm assuming the same could happen elsewhere so I wanted to warn others who might be looking at net-metering deals that look "too good to be true".