Case Studies

Hongslo Residence – 2006

Hongslo Residence

The Honglso home was constructed by Pietch Builders in 2006 in Lakeville, Minnesota.  The 4200 square foot, two story home was built using the following specs

  • 2×6 SPF exterior wall framing
  • Low-e efficiency windows
  • Fiberglass insulation and blown cellulose insulation in attic
  • Rim joist were insulated using foam

The homeowners hired a home energy consultant to perform an energy analysis of the home.  The consultant estimated the annual load to heat and cool the home.

Annual Load (MMBtu/year)

Heating 69.5
Cooling 27.3
Water Heating 18.4

This estimate is translated into dollars in the following table.  Dakota Electric is the service provider for this home, and offers an off peak program for ground source heat pumps and electric water heating.  The off peak program offers a discounted rate of $0.039/kWh.

Geothermal Conventional
Heating $266/year $972/year
Cooling $30/year $184/year
Water Heating $222/year $448/year

SB Mechanical and Geothermal, Inc. installed a geothermal system using 700 feet of horizontal slinky loop along the side and back yards.  The following equipment was utilized for the geothermal system:

  • 7 ton Econar GeoSource Ultra Hydronic Unit
  • 5 Ton Econar Air Handler
  • Radiant floor heating in basement and bathrooms
  • Desuperheater option on heat pump to preheat potable hot water
Initial Cost Comparison

When designing this home, Pietsch Builders estimated the costs for both a geothermal system and using their typical heating contractor for a conventional natural gas forced air furnace at 92% efficiency, with a 13 SEER air conditioning unit.  The following table lists the costs for installing each.  The cost does include installation of duct work and venting.

Geothermal Natural Gas
Equipment $31,900 $15,710
Radiant Floor in Basement and Bath $1,741 $10,100
Upgrade Electric Service Required $950 No Upgrade
Total $34,591 $25,810

Cost Difference = $8,871

While the geothermal option installation is $8,781 more than the natural gas option, the increased costs are reduced with the following incentives.

  • Dakota Electric Association offers a $200/ton rebate on ground source heat pumps.  For this installation, the rebate totals $1400.
  • A $300 tax credit is offered by the IRS code for homeowners who install geothermal systems.
  • The US Department of Energy will be offering a $3000 rebate enacted into law for homeowners who install a renewable energy source to heat and cool their homes.  This rebate is funded from 2006 through 2010.

All the incentives listed above reduce the geothermal installation by $4700, to a total cost of $31,218.  This is $4,081 more than then natural gas option.

Return on investment

The Hongslo’s have provided their cost for the first two years they have been in their home.  Dakota Electric meters the usage of the heat pump and water heater separately from the general electric usage as they are on the off peak program..

 Period Annual Cost Average Cost/Month
Year 1 $635.23 $52.94
Year 2 $562.76 $46.90

Using the estimated cost of a conventional system, the Hongslo’s are saving roughly $1000 each year.  With the incentives, the return on investment is 4-5 years.