Heat Pumps – were they worth it?

In October 2018, we installed 2 heat pumps. Coincidentally, this coincides with my first month on the journey to FIRE.

In some ways it was not a FIRE-y thing to do – spend thousands of dollars we didn’t have. In other ways, it could be considered FIRE-y if the ROI is good enough to justify the purchase. Today, I’d like to dive into some numbers to determine our estimated ROI and if it was all worth it.

Firstly, I’m not a statistician. Or any good at producing reports that present statistics. So, let’s just keep that in mind. I welcome your suggestions for improvement in the comments.

Some Information regarding The Year of the Heat Pumps (TYotHP)

This table shows my average daily KWh for the last 3 years, the average temperature (as reported by the power company), cost per KWh, and annual cost.

Time period Avg Daily KWh Average Temp Cost per KWh Annual Cost + Tax
Nov 2016-Sep 2017 59 6 0.1118 $2,422 $2,786
Oct 2017-Sep 2018 60 7 0.1118 $2,442 $2,808
Oct 2018-Sep 2019 51 5 0.1118 $2,078 $2,389

As you can see, we used fewer KWh during TYotHP. AND, it was 1-2 degrees COLDER! Which is fan-frickin’tastic.

We were a bit worried about summer heat pump use during TYotHP. We do not have air conditioning in our home, so we thought that by running the heat pumps to cool the house, it could negate any savings during colder months. Fortunately the efficiency of the units was underestimated and we still managed to save power.

How does this translate to dollar savings? Well, in TYotHP, we saved $419 over the previous year, and $397 over the year before that. Both were colder years by 2 and 1 degree respectively.*

*The KWh rates in previous years were likely lower but screw the power company, I don’t need to be reminded of rising rates in this blog post / chart.

Heat Pumps – Analysis

Despite it being colder in the past year, we used less power. Which is great. Theoretically we could say that we should expect to save on average $400 (or more if it’s colder) annually post-TYotHP assuming rates stay the same. LOL! That’s a joke, but let’s just say rates will stay the same to make my life easy. It’s important to note here that we have not changed our power consumption habits in other areas over the past 3 years.

But what about the attic? We had our attic insulation beefed up at the same time the heat pumps were installed. This probably saved a bit of power  as well, because less heat escaped through the roof. It’s not possible to pinpoint how much was saved, but let’s discard any possible extra “It’s really frickin’ cold here” savings and say we guess that approx. $400 annually will be saved.

Now, onto the ROI

Heat Pumps Cost
Home Energy Assessment 114
Cost of Heat Pumps (Including Tax) 7705
Rebate from Power company -1924
TOTAL COST $5895
Estimated annual savings $400
Years to reach ROI 14.7

Conclusion

Well these puppies won’t pay for themselves as fast as I would have liked, but since we are likely going to live here for more than 14.7 years, it’s worth it. Additionally:

  • We now have air conditioning. We would have purchased one or multiple AC units which are far less efficient. Quality of life, people!
  • When we sell our home, we could recoup some of our costs by charging more for the home with an efficient primary heat source (praying that maintenance costs will be minimal).
  • We are lessening our environmental footprint, which is important to us.
  • Baseboard heaters are evil.

Well, that’s about it. Please let me know what questions you may have about the process of upgrading to heat pumps!

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