Payback periods and mindsets............

[BoilerMan]

I have been talking to some people, mainly my FIL about payback periods of updating equiptment and fuel useage. Mind you I just installed a natural draft low efficiency boiler in a big apartment building for him, and he is already complaining about LP useage in this leaky old building. That is another story for another time about building envelopes and prople sealing and dew point position in walls......

The cost of burning wood thread by heaterman made me think to post this. If we take into account the "cost" of our wood gathering and processing (or buying) vs. paying the oilman and not having any wood heating equiptment and it's associated expences. Basically if we pay $10k or more bor a boiler setup and storage, and eliminate, or drastically reduce our heating bills. But now we have all the "work and cost" of wood, processing, and the equiptment we bought to do so. We here on Hearth obvously don't mind that, but if we try to look at it from strictly a financial and time view, is it worth it? We are biased here, and his answer was no.

I have to admit, in my own super-insulated home, it may not have been worth it to intsall a gasser. But for me, mentally, it was, now that I burn 1 less cord/year. We can afford to live here, and I will always be able to scrounge my yearly heat. He says it would be better to pay the oilman, and not have invested the money in the gasser and it's associated systems. It's kinda like solar or heatpump DHW, the "payback" is quite long and sometimes non existant to the bean-counters. We don't know how long those systems will last vs. their conventional counterparts.

I say, it's a mental thing for me, I'd rather pay for something super-efficient (and more $$$$) now, and not have to worry about my energy bills for the life of that equiptment. The flip side of the coin is to buy conventional (and less complex, less $$$$) equiptment and pay the resulting higher fuel consumption if it works out in the end. Obvously wh don't know what "the fuel" will cost in the futrue, but it can be projected somewhat.

I've had the privelage to have some of these interesting conversations with different people and their perspectives noted. What do ya'll think? Bias noted..

TS

 

[Norwegian Wood]

The true answer to your question will come when oil is $10 or $20 or not available at all.
Don't think that is not possible.
The question then will be who is cold & who is warm in their own home.
For me, it's a question of surviving when TSHTF.

 

[BoilerMan]

The true answer to your question will come when oil is $10 or $20 or not available at all.
Don't think that is not possible.
The question then will be who is cold & who is warm in their own home.
For me, it's a question of surviving when TSHTF.

Couldn't agree more, no matter what (as long as I can get some gas for the saw, or ax, bucksaw) I'll be set.

TS

 

[arbutus]

A few things come to mind.

In general, I would rather pay for quality and efficiency up front, to ensure a good service life and reduce ongoing cost of operation.
I seem to recall the average length of time a home is owned is seven years, so if payback isn't reached in that time, and there is a chance that the owner will move, it may not make sense to spend extra money for that quality and efficiency.

In my case, I just purchased a home, with electric baseboard heat in an area that averages 9500 heating degree days.

I figured a payback period of ten years was reasonable.

Natural gas is not available in my area.

Electric is $.095/kwh.
To do nothing would cost me about $40,000 in electricity over the next ten years assuming the price stays the same.

Propane currently is $1.85 (summertime, with COD discount).
To retrofit a forced air system and buy propane at $2.00 for the next ten years would cost me about $34,000.

I figured wood at $210 a full cord, which is the current high cost for cut, split, delivered maple.
To retrofit a hydronic heating system with a wood boiler and purchase all wood at $210 for the next ten years would cost me $36000.
Most of the guys that heat with wood at work are buying 8-10 pulp cord and css themselves for about $90 a full cord. At $100 a cord, the install and ten years of operation would cost me $24000, plus the cost and time of splitting 100 cords of wood.

I looked briefly at GSHP, and guesstimated $25000 for the install including a 10 ton unit, and either a second well capable of 22GPM or nearly a mile of loop. I figure that GSHP might be an option for shoudler season eventually, but parity with wood isn't until year 12 or so, and that's if I am purchasing wood at top dollar.




If I had natural gas available at a dollar per 100k btu I would install the hydronic system, along with a modcon boiler, and not be planning to css in the summer or go outside to stoke a fire three times a day in the middle of winter in swirling snow.

 

[jebatty]

For me the focus is too narrow, and the narrow focus results from monetizing the analysis and then only monetizing a portion of the costs of the heating system.

First, burning wood from sustainable forestry practices not only provides fuel, but the forest also provides habitat for wildlife, filters rainfall and surface water to provide clean ground water, prevents soil erosion, provides a wide variety of recreational opportunities, consumes CO2 and provides oxygen. Extraction of fossil fuels does none of this. In addition local forestry provides jobs, supports families, supports the local economy, and adds to the local quality of life for many people. Extraction of fossil fuels also provides jobs, but most of these are far away, even in other countries, and local economic support usually is minimal. In addition, for those who participate in parts of the harvesting, bucking, splitting, fueling process, they realize the health benefits of physical exercise and the subjective value of better connecting with the natural environment.

Second, the social costs of fossil fuel extraction and combustion are not monetized and included in the cost analysis. Environmental destruction, water and air pollution, CO2 buildup in the atmosphere with attendant consequences, etc. I believe if these costs were included in the equation, the cost of fossil fuels would make them prohibitive for all but the most wealthy users. But as a society in the US, we largely ignore these and pass on the consequences to future generations when the "bill collector" will come a-knocking. Wood harvested and combusted with sustainable forestry practices avoids nearly all of these non-monetized costs.

Third, humans are part of the environment and not external to the environment. Therefore, in my moral framework I have an individual responsibility to minimize the harm I cause to the environment and other living things. That usually means I choose to pay more in dollars now to achieve my part of outcomes that have reduced adverse environmental impact than other choices. My quality of personal, moral well being is enhanced. Life is better for all living things than otherwise it would be.

For a commercial-like operation, one might also factor into the analysis the security benefit of having a person around at night to monitor and fuel the wood boilers, or if a maintenance person already is on the job, keeping that person productive during other non-productive times could be considered.

 

[JP11]

AHA!

Love this kind of thinking.

BUT.. With ANY purchased fuel there is something called risk.

There is a risk that due to some unforeseen circumstance that the price will skyrocket. All kinds of people put in pellet stoves, only to find that during a recession the price of pellets went up due to the lack of wood products being made due to recession.

Any petro based fuel can jump like crazy short term after a big storm or hurricane thousands of miles away at a refinery. I'm not saying these are long term, but short term and then people "stocking up" can send reverberations thru the supply chain for months.

Anyone price out ammunition lately?

It's my contention that a double whammy, say a terrorist strike on a refinery just after a big hurricane.... would cause prices to jump, and jump BIG.

The price of my trees out there doesn't change. They keep growing no matter what the economy does. Now do I "worry" about any of this happening. No... but it's a risk that I have mitigated. The only fuel I need to buy is chainsaw gas. If it goes to 50 a gallon I can still swing heating my very large house perpetually just of my own labor and what my land produces.

THATS why I love to heat with wood.

JP

 

[BoilerMan]

I knew this would get some good response from "the summer over crew". Keep it comming! I like to hear the perspectives of others, most of whom I've not even actually met!

Jim, I remember clearly the chat we had in another thread about this type of thing, and the "big pitcture costs of petro". I appreciate your perspective, while not totally agree, you have some very good points. The local economy being a very strong arguement I have put up as well. Do you think that petro should be used for transport and lubrication? I would like to think of what it would be like if everyone ditched the heating oil, and went to wood with good burning practices..........I think some of JP's likes would disappear, the price of wood would go up, people who own woodland would see a tax increase because of their land "having intrinsic value" on it. And I think we'd have some serious deforestation, if we replaced all heating fossil fuels with biomass.

Great points all! Lets keep thinking critically about this.

TS

 

[BoilerMan]

Arbutus, man you have some cheap electric rates! We pay $0.147/kWh with all the other fees included.

TS

 

[JrCRXHF]

With the electric car and the power program i am on i pay .06kWh from 11:00pm to 7:00am and all weekend. During the peak time i pay .12kWh so even with charging the car to go back and forth to work my electric bill is lower then it has ever been. about 50.00 a month.

I have a triangle tube 250,000btu boiler and side arm tank that i am preheating the water for with the harmon SF-260 that i bought for around 1200.00 and so far most of my wood has been next to free. It makes for cheap heat besides buying all the equipment. But i look at it as a work out it gets me out side working with power tools and i just like the way the heat feels. When the wife gets done with her PHD i might go gasier but it is hard to change up because in the boiler room i don't have room for hotwater storage because it is in the house so it might not be worth the cap investment.

 

[hobbyheater]

I've had the privelage to have some of these interesting conversations with different people and their perspectives noted. What do ya'll think? Bias noted..

TS

Our system was put together in the early 80s at a cost of around $ 6,000. I would not hesitate to do it all again. Now that I'm in my retirement years, $60.00 month hydro bills and $250 yearly for wood, I could not be happier.

 

[kopeck]

The way I see the up front cost to install the boiler is for the most part fixeds, it's easy to live that, it's money spent not something I have to budget for in the future. The fuel to run said boiler is sort of fixed too, as long as I take the time it's "free" (my time + a little fuel for the saw/tractor/splitter). Even if I had to pay for firewood the payback on my Tarm would have been pretty quick compared to most other alternative heating systems (solar, geothermal etc). Putting up the wood my self the payback time is probably in the 5 year range, you can't beat that (I'm on year 2)!

The way I look at it the Tarm effectively insulates me from the roller coaster that is a barrel of oil. I like that, world politics, crazy weather, any excuse (and most of them are IMHO) to jack the price up doesn't effect me (well besides my car).

K

 

[Tennman]

For me the decision about heating with wood started way up stream of ROI. In fact I'll bet you can find a very similar discussion on a forum somewhere titled "Should you raise your own beef for meat?".

It started for me with:
1) Can wood provide equal or better heat for our family from all the annual natural wood availability on our property - Yes
2) Can I physically and do I have time availability to process the wood - Usually, sometimes, maybe
3) Is the cost savings really significant enough to be worth my time - Hummm... I my particular case of drafty house and only propane or electric to heat it... heck yeah.
4) If I do bite the bullet for a good system, can I realistically achieve a ROI in less than 5 years - Absolutely for my situation which is far worse than most here.

Much like my "Raise your own beef" example, I'll bet most of us were already handling wood and routinely using a chainsaw. My city friends would never consider doing this regardless of the ROI. But I'll bet many folks that visit this forum were like me, spending quite a few days a year cleaning up blowdown, clearing naturally falling trees, and it dawned on them (like me) that good grief... I could be getting something useful from all my work instead of burning it in a big pile!

I think a very interesting poll here would be how many acres do the regular Hearth Boiler guys here live on because I'll bet that is a more telling indicator of who messes with doing this than ROI. In my area it's not until you get 3-4 miles out of town and see folks on at least 5-10 acres you start to see wood boilers... and usually Hardy's. Folks on that much land need a chainsaw, used to dealing with trees, and aren't worried about smoke and the neighbors. And if they so had the mind to and if they wanted to they could raise their own beef... if the ROI made any sense or if they just wanted to do it for fun. Call me goofy, but I find messing with my boiler fun. Besides... I'd still need to process all that wood our land naturally produces. Or, go get some really cheap drops from local saw mills.

Boilerdude, I can completely see your FIL as a businessman coming to the "No" decision way before he gets to ROI. Ok... back to work.

Oh... and environmental factors never even made it to even the lowest level factor in my decision matrix since I already was making big ole honking fires every year outside. Cheers

So who wants to start the acreage poll?

 

[woodsmaster]

Is it really that big of an investment after you subtract what the conventional equipment you would have to have instead would cost ? I think not, at least in my situation. After buying a furnace for the house and a furnace for the shop it wouldn't be that much cheaper than my boiler. I figure a full ROI in around 4 years. Probably 6 years ROI if I bought all my wood .

 

[dogwood]

Boilerman, the considerable cost for our Solo Innova, plus storage, piping ,a new chainsaw, log splitter and lots more is worth it for peace of mind. We had the shock in fifteen years of our propane bill climbing from $60 a month to $375 a month. We had no idea what was going to happen in the future. We wanted to be independent of this worry, especially as in less than four years I will be retiring, and we'll be living on a fixed income. I was able to pay the thing off, and now I don't have to worry about propane bills any more. which in effect is giving my future fixed income a considerable boost.

Not being beholden to big oil, OPEC, and whomever else can and will exploit you is something money and hard work can buy, and well worth it at the cost of an alternative energy system like a wood gassification boiler.

Mike

 

[JP11]

Proud member of the "summer over" crew.

ROI.. Easily under 3 years, including spliiter, new saws, winch for tractor.

Risk... the fuel price volatility is certainly there. From real, or imagined forces. Oil speculators, magical yearly refinery shutdown. WAY too many things the consumer is slave to. They MUST buy oil to heat their homes.

Different way of thinking about a plain old computer controlled fire in a box!

I get what you are saying about what if EVERYBODY burned wood. I think it would take several generations, if ever for the wood lands to be taxed as having some huge value. It would be my assertion that especially up in the less populated states.. we could EASILY burn just the diseased, and blown down woods. Add in the low value woods and sustainable forrestry could supply A LOT of heat. Take a walk thru the woods and look for deadfalls. Just think if you could have harvested that wood and done something beneficial with it a few years ago. I know the nutrients go back into the soil.. and the dead logs make homes... but there's plenty.

I LOVE the way large buildings and school campuses around me are going to self feed chip boilers. The money stays local! We have the fuel growing all around us. You might live in a dense populated area... but I tell you.. I fly for a living and there are trees EVERYWHERE! and they are closer than you think even if you live in the city. In the urban areas a downed tree just because "trash" lots of energy being wasted.

JP

 

[skfire]

I say, it's a mental thing for me, I'd rather pay for something super-efficient (and more $$$$) now, and not have to worry about my energy bills for the life of that equiptment. The flip side of the coin is to buy conventional (and less complex, less $$$$) equiptment and pay the resulting higher fuel consumption if it works out in the end. Obvously wh don't know what "the fuel" will cost in the futrue, but it can be projected somewhat.

TS

+1.
Agreed 100%...

The true answer to your question will come when oil is $10 or $20 or not available at all.
Don't think that is not possible.
The question then will be who is cold & who is warm in their own home.
For me, it's a question of surviving when TSHTF.

+1.
Only question is how much volume of excrement will hit the ventilation propeller and at what sustained rate & duration.
But beyond that, when the power is out our boiler gear will be sitting there...my back up hearthstone sits next to the boiler with the flue pieces at the ready and the Rumford fireplace upstairs is battle ready..and dry wood aplenty..

-----

Before my system was in place I was going through 1,500 of LP per year(DHW, Heat and cooking)
At a final cost of $23,500 of boiler, eqpt, install and all heating manifold/piping/pumps, complete boiler room rebuild, a 5-6 year return of investment is feasible.

Added point by Tenman, of personal independence, including, growing our own food supply, trading/bartering locally, finding local producers and helping a communal cycle of production./consumption.

Finally, Jim your post was right on point with my own viewpoints, especially Fossil fuels/extraction costs etc, and the balance in the overall equation..and finally the personal responsibility of one citizen..living an exemplary life, for the greater good, as well as the moral value of one's own life("You must be the change you want to see in the world"..M.G.) .... well said Jim.

Great topic.

Scott

 

[fuelfarmer]

My dad always said you can't farm with a pencil. Sometimes you just have to do things that make you happy, or give you peace of mind. One thing for sure, 2 years, 5 years, 10 years will happen regardless. So do you want to have some control of your heat cost over that time or just be along for the ride?

 

[tmudd]

I could not agree more with the quality product over bargain price aspect more. As a general contractor I see a lot of really unbelievable poor long term choices made on buildings. People get a blind spot about how much every thing should cost, especially in a house. Nobody even flinches when asked to buy a new car and pay 20,30,40 K, yet there primary base of operations, the homestead some get really stingy about price. I certainly agree that resources such as fuel for energy, whether it be for autos or to heat homes will continue to increase. These resources are finite. Just like land- they don't make any more of the stuff. I have latched on to the saying " everybody has plenty of money to fix it after making a poor choice the first time." Something high quality paid for now even at a high price will only be more valuable in the future as cost for good things are recognized and continue to climb. Some good examples are brick houses on good foundations and old Mercedes 300 turbo diesels.
T-boy

 

[heaterman]

Lot's of people here seem to "get it". And by "it" I mean the fact that the TRUE cost of practically anything is seldom reflected in a simple bottom line type analysis. I can think of hundreds of examples but to use a couple highly visible and major examples, I would humbly submit the extraction of oil from the tar sands up in Canada and the genetic modification of seeds/plants currently being done by Monsanto and others.
Any idiot can see that if true environmental costs were factored into the tar sand equation, it would never fly. Huge swaths of land are being laid waste and the water contamination will take centuries to subside if it ever does.

The long term ramifications of Monsato using the human population of the entire world as an experiment is up in the air at this point but judging from the effects we are starting to see on insects and amphibians something is happening and it's happening rather quickly. (Do a search on the Monarch butterfly population over the last 5 years.... at this rate there will be no more in another 5).
I have a bad feeling that the bottom line only approach to living on this planet will be lead to the destruction of it and probably most of us.

So.......how much do things really cost? That is a question that runs much deeper than it appears on the surface.
I always liked Viessmann's view that the total cost of a product must be looked at in terms of life cycle rather than first cost only. If more companies held that view we would be better off in the long run.
As it stands right now, the policies of our own government and others around the world tend to be on the stimulate, stimulate, stimulate, grow, grow, grow side of things rather than conserve, live simply and be a steward of our resources rather than someone who exploits them.

Soap box is open.

 

[NE WOOD BURNER]

Live simply!
Novel Idea, but has never been that way. Norman Rockwell painted fantasy so we could dream of simplier times.

 

[Norwegian Wood]

The local economy being a very strong arguement I have put up as well. Do you think that petro should be used for transport and lubrication? I would like to think of what it would be like if everyone ditched the heating oil, and went to wood with good burning practices..........I think some of JP's likes would disappear, the price of wood would go up, people who own woodland would see a tax increase because of their land "having intrinsic value" on it. And I think we'd have some serious deforestation, if we replaced all heating fossil fuels with biomass.

Boilerman, if everyone did it, the price of our systems would fall dramatically. Think computers, cell phones, & flat screen TV's.
The only time prices rise (absent a shortage) is when the government interferes with the market. Think housing, education, and health care.
Yes, there would be a greater demand for wood, and so prices may indeed rise there, but as jebatty points out, there are hidden costs in our oil based system that are being felt in climate change & more intense weather patterns.
Since wood is a renewable resource, supply should be fairly stable as more are induced to provide it.
I like your point about the local economy, for who would benefit more than the motivated local wood suppliers?
I'd rather they got my money than the Saudis.

But I digress.
The main point for me is that the western world is hurtling towards a monetary collapse, caused by un-payable debt and endless money printing.
The major parallel to this is Germany 1921-1923, where an enormous debt was funded by selling bonds & printing money. Sound familiar?
It took two years, but the currency collapsed.
The only thing sustaining the US dollar is that it is the worlds reserve currency. That will change.
When that happens, (and it will) there will be no oil.
Nobody will sell it to us for anything other than tangible assets, like gold or wheat.
I am installing my system as part of my preps for this disaster.
I am a student of history, and an expert on financial & monetary systems.
When this happens, most people will feel like they've been hit in the face with a 2X4.
They have no clue.

For those who like spread sheet analysis, consider this.
What is your families lives worth?

 

[dogwood]

Norwegian Wood, what concerns me most is the exponential and unsustainable growth of the world population. It's gone from 4 to 7 billion within my life time and will probably be at 14 billion when our grandkids have their own grandchildren, and 28 billion after the next cycle. It almost doesn't matter if we cut down on energy use by 50%. Even if we did accomplish that impossible task, when the population doubles we're at the same place we started. Only the Chinese have done anything about population growth, because they had to, So does the rest of the world, or we will have nothing left, as the ever burgeoning population uses up the worlds resources at a faster and faster clip.

You see it all around you, to include the Mosanto's of the world doing out dirty work to wring out more and more from a limited world-wide supply of natural resources, however they can, regardless of the impact.. The results of unbridled population growth include global warming, deforestation, an incredible extinction rate not since seen since the Permian period, the oceans filled with piles of degraded plastic as big as continents, and who knows what else. The results are frightening in the not so long run, and are fueling ecologic disaster. More and more people eventually will have less and less. Population growth is hardly ever talked about, but it will do us in.

I don't think the way of life we've had since the Industrial Revolution will endure, which is a shame, since we have so much, and so many can live good lives, free of many of the scourges of the past. So enjoy it while you can, and do the right thing.

And Heaterman, I couldn't agree with you more.

Mike

 

[Karl_northwind]

It seems that the people on the national and state political level that scream about the debt that their children will have to pay back are amazingly quiet about the climate impacts that the entire planet will have to deal with at this point, only getting worse in the decades to come.

That is, if they acknowledge that human-caused climate change exists at all. It's the wise person who recognizes both.

We have to recognize the science that shows that the only reason civilization exists at all is the remarkably stable climactic levels of carbon dioxide we've had for the last 10,000 years. we've upset that balance, and none of us know where it's going to end, and none of us will be alive to see it. I doubt the children of my as-of-yet unborn children will still be around when things stabilize.

My favorite thing: When geologists use the term "Suddenly".

Heaterman did say the soapbox was open......

 

[BoilerMan]

I agree, but without getting into my own belief system (last line of sig sums it up) we will not be here forever. This does not, in any way, give us the right to waste or squander our recources. But the focus has to be in the right direction, "saving the trees and killing the children" has been the predicted outcome for over 2000 years. I do believe in conservation, I built a house that uses less total energy than one of 1/8th it's size in my climate. I conserve so I can use my finite resources $$$ to point people in the right direction (last line of sig). We do need to live simple lives.

TS

 

[Norwegian Wood]

Dogwood, you are 100% correct about the carrying capacity of the planet.
However, the economic collapse will occur much, much sooner the the population bubble, and in many ways, will correct it.
I don't mean to sound cavalier about this, but consider the "Arab Spring".
This was not the "throwing off the yoke of dictatorial regimes" that the mainstream media would have you believe.
This was the 120% increase in food costs (source: World Health Organization) caused by money printing in the US & the absurd policy of subsidizing corn for fuel (ethanol).
Revolutions begin in the bellies of the poor.
They are not about "democracy".

Soapbox now wide open.