The Numbers Are In

Happy New Year, All

Apologies in advance for the long post...

I've been diligently tracking the energy inputs to my new Windhager pellet boiler for the past year. I installed it in the fall and took a few months to tweak and adjust it, then I topped off my pellet bin on 1 Jan 2014.

I've documented every pellet that's been added to that bin until today, when I topped it off again. I also have an electric data logger that monitors all electricity used by the boiler and the distribution system.

I live in Juneau, Alaska which is relatively mild by Alaska standards (and even Wisconsin standards, where I grew up). Winter temps are often above freezing (it's raining today) and we rarely see sub-zero temps. My house is 3,200 SF (includes a mother-in-law apartment), plus a garage and shop that I normally keep at 55. Besides heating the entire place, my pellet boiler also heats all domestic HW.

The boiler is a bit undersized for the place, so on the coldest days I have to use my backup electric boiler to supplement. I don't meter that boiler (but the electric utility does!) so I haven't accounted for the BTUs that it's contributing, though I'd estimate it at 5%, probably less.

The boiler is a 15 kW (51,000 BTU) Windhager pellet boiler. It's attached to an 85 gallon buffer tank feeding five baseboard heating zones. Since we don't have bulk delivery, I hand feed from bags into my ~1 ton bin. The pellets primarily come from Home Depot, the cheapest place in town. They cost $319/ton by the pallet load (yeah, expensive, like everything else that has to be barged up here, oil included), though sometimes I got a better deal than that. Hoping that someday I can be using locally produced pellets, but so far the pellet industry is pretty small.

Now to the numbers (averaged over 2014):

Oil Numbers (I looked back at my past fuel oil usage for 2006, 2007, and 2009 - years I had good records for - and took the average of those three years.):

Average annual gallons used: 981
Average cost per gallon: $2.66
2014 average cost per gallon: $3.90 (I'll use this cost in the following calculations to derive an apples-to-apples comparison if I was burning oil this year)
$/year: $3,826
Gallons/day: 2.7
Total cost: $3,826
$/day: $10.48
BTU/day: 370,861 (this is lower than 2014, mainly due to the fact that I worked at home in 2014 and kept the house warmer)
35,385 BTU/$
Heating Degree Days: 8,730
$/HDD: $0.44

Pellet Numbers:

Tons used: 6.6 tons
Total Cost: $1,932
$/ton: $291
$/day: $5.29
40 lbs bag/day: 0.91
BTU/day: 463,192
87,520 BTU/$
Heating Degree Days 2014: 7,819 (it was a very mild winter - we sent the nasty stuff to the Midwest)
$/HDD: $0.25

Electricity usage by pellet boiler in 2014:
KWh: 744
Cost (@11.4 cents per KWh: $84.88
Cost per day: $0.23
I don't have electricity usage for the oil boiler, but I think it's similar or higher.

Now to the conclusions:

1. I'm saving a boatload of money by switching over to pellets!
2. I saved $1,499 this year compared to if I had been burning oil (accounting for HDD)
3. That's a savings of 56%
4. If this performance continues into the future, the simple payback on my system will be 6.7 (edit) years

Caveats:
1. The price of oil is headed down (for now), so the relative savings won't be as high. But even if oil hit the prices I was paying in 2006-2009, the pellet boiler still yields big savings. The break even point is if oil hits $2.20/gallon. Not likely up here.
2. I installed my boiler myself. It was a substantial amount of work. If I had hired it all out, the price would have been higher, and thus the payback longer.
3. Pellet prices could go up, though with cheaper oil comes cheaper barge costs, so they'll likely go down.
4. The pellet boiler requires a bit more interaction on my part.
- I have to haul the pellets home and hand feed them rather than having a fuel truck pull up and deliver energy for me.
- I have to empty the ash bin occasionally.
- Since there are no local pellet boiler mechanics, if the unit needs servicing, I'm largely on my own (with some coaching from Marc and other heroes on this forum)

Final thoughts: I'm very happy I bought this unit, and I'd do it again in a heartbeat.

Questions? Comments?

velvetfoot said:

May I ask what your hours/starts is? Have you been tracking that over time?

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I have been tracking that, and as I recall, it's been consistently hanging around 2 hrs per start. A high of 2.2 and low of 1.85. It got substantially better once I added the thermal storage.

velvetfoot said:

Also, is cord wood in the mix somewhere?

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I do use some cordwood in my Quadrafire insert, but the usage dropped a lot this year, less than a cord. When I was burning oil I was going through two or three cords per winter. I didn't factor that into the equation because I don't have solid records for it. So in reality my pellet numbers vs oil are even better than I demonstrated above.

jebatty said:

With your mild temperatures, did you consider an air source heat pump?

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I did consider an ASHP, but the quotes I received to install a multi-head unit for my sized house were a show-stopper. Over $25K. But I suspect if you lived where there was a more competitive business environment that cost could drop significantly.

A few other issues in my case went against ASHPs:
1. The ones I looked at were air-to-air, not air-to-water (which is even more expensive) and didn't heat domestic hot water. It's surprising how big the percentage of your heating load can be attributed to DHW if you have a few people in the house. So I'd still have to heat my water with another source, probably electric.
2. I already have a baseboard heat distribution system. I'd be abandoning that investment with an ASHP. If I went air-to-water, the water temps a HP can deliver are low - in the range of 120-130F, so my baseboard system wouldn't be effective and I'd have to install expensive panel radiators.

I doubt that you'll see a COP of 3 from an ASHP in your environment. That's a little too optimistic. More like 2.5, and a lot lower when it's really cold. Ground-source heat pumps can achieve a COP of 3 due to the fact that they extract their heat from the relatively warmer earth than the cold air.

There's something called the 'heating seasonal performance factor' , HSPF, rating that the heat pumps you're looking at should have. This represents the average COP over a year that you should see in your climate. If you Google HSPF you'll find more detailed explanations and some calculators out there on how to apply it your location.

jebatty said:

As my age is in the high 60's, I can see a time when I will not want to c/s/s as much wood

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If you already have a HW distribution system in place, and a good source of pellets nearby with bulk delivery, I'd definitely go with a pellet boiler. The only strenuous part with them is the loading of pellets, and bulk delivery solves that. Or you can install a bin like I did and hire a local kid to fill it. You'll find that their cost of heat is competitive with an ASHP with electricity being so expensive in your area. And besides, you're using a local product, supporting local jobs, rather than supporting coal burning.

velvetfoot said:

You're using the pellet boiler year round for domestic hot water?

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Yes. It worked fine, and I still came out well ahead of electric HW in the summer.

velvetfoot said:

Generally, what do you set your thermostats to? Setback?

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Typically heat to 68-69. Yes, stats are set to 55 on setback schedule.

velvetfoot said:

Multiplying savings/year by payback time gives a lot lower number than I have into my project, or maybe I'm not understanding.

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Simple Payback is simply capital cost divided by annual savings. In my case it's roughly $10,000/$1,499 = 5.2 years. If your capital costs are higher, your payback time will be longer.

There are more sophisticated analyses that use the NPV of your capital expenses and operational expenses and assumed future fuel costs. But simple payback is a reasonable first approximation in most cases. The longer the timeframe your project is evaluated over, the less valid simple payback becomes due to the many future unknowns.

Ug. Thanks for the catch. Spreadsheet error. I thought that payback looked suspiciously good, but I was in a hurry and didn't check. I'll go back and edit...

Nonetheless, 6.7 is still a very good payback.

velvetfoot said:

You're using the pellet boiler year round for domestic hot water?

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Meant to also say that during summer I reduce boiler/system temps to reduce standby losses. The indirect HW heater doesn't need 170F boiler temps to operate effectively. 155 is adequate, though it will recover a bit slower.