Utility costs and GCHP systems - when is geo feasible? (part 4 of 7)

In over 3 decades working in this industry I've had two clients who have not been directly concerned about the return on the investment needed to install a GCHP system. One was an association of roofing contractors...they were mostly concerned about installing equipment on the roof of their new building than the cost of the GHX. The other was an association of rural municipalities who simply wanted to make a statement about "how green they were". Virtually everyone considering a GCHP system asks two questions:

"What will it cost to install a GCHP system?", and "How much will it reduce my energy cost?"

The cost of installing the system is affected by the geological conditions on the site, the contractors available to build the system, and the design of the system (see part one, part two and part three of this series). How much money it will save depends to a large degree on the cost of electricity and alternative fuels available for heating the building and producing hot water. It includes:

• The cost of electricity and other fuels. If energy is expensive, there is more potential for saving money.
• The relative cost of electricity compared to the cost of alternative heating energy sources such as natural gas, propane, oil or renewable energy sources. 
• The electric utility rate structure. Some utilities have demand charges, others have different rates in different seasons, others have different rates depending on the time of day. The design of the system can have an impact on what time of day electricity is used. 

If the building is cooling dominant, like many commercial and industrial buildings are, the cost of heating the building is not a large factor. If it's a residential building, hotel, hospital or other building whose occupants will use significant amounts of hot water, the relative cost of different fuels is important. But electricity is needed to drive almost all commercial cooling systems...chillers and cooling towers, air cooled chillers, rooftop units, etc., as well as GCHP systems. Typically, cooling costs can be reduced by 25% to 40% compared to conventional cooling systems, and if the cost of electricity is high, the savings are greater. 

More and more utilities are implementing smart meters and time of use rates. GCHP systems can be designed to take advantage of thermal energy storage (ice storage or chilled water storage). Energy storage integrated with a GCHP system has the added benefit of reducing the size and cost of the GHX in many applications. The combination of reducing the cost of the GHX and increasing energy cost savings can greatly improve the owners return on his or her investment.