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.