Payback Periods

[caucapon]

My concerns closely parallel those of the gentleman from Denver who originated a gasifier thread several days ago. My wife and I just purchase a 2400 sq. ft. true log cabin in southwestern Virginia with two story ceilings in half the house and a conventional second floor in the second half. This house has no exterior insulation other than the logs themselves. There are approximately four inches of cellulose blown into the partial attic. Windows are many with double panes. The house was built in 1991. While winter temperatures here can go as low as about O degrees F., a typical January low seems to be about 25 to 30 degrees. By mid-April, winter is usually long gone.

Our house has no basement, only an 18" to 36" crawl space. This area is heavily cut up by three support beams that divide the crawl space into four channels. The residence is currently heated only by one directly vented and kerosene fired Monitor heater. My first task upon assuming ownership this fall was to remove the industrial oil fired heater and AC combo unit located outside the structure. This unit was essentially inoperable and should never have been installed in the first place, if only because of the gross inefficiencies involved.

Over the past thirty years, I have installed several wood/coal stoves, one Monarch coal burning furnace, one natural gas fired furnace, and one oil fired furnace. I am currently considering the possibility of the purchase and installation of a wood/coal fired boiler. Since I was forced to remove all duct work that serviced the erstwhile furnace/Ac combo unit in order to install my support beams, there is at present absolutely no infrastructure in place to service furnace or boiler. Duct work would be difficult to install in the crawl space and very difficult to hide within the living space. However, realistically, anything goes.

I am very concerned about payback for a wood boiler install. I've been following a number of threads on this forum over the past few weeks. It's become apparent that these boilers are not presently sold with all the accoutrements necessary for efficient and effective use. The need for outside protection for most boilers, the necessity of external water storage, and all the other additions many members of this forum incorporate into their systems makes me question the validity of going this route in my climatic zone and with my heating needs. Having to install a completely different system for air conditioning is another financial downer.

Our Monitor 41 has already used about $800 worth of K1 oil. I anticipate a minimum heating oil expense of approximately $2000 for the season. This will be true even though we are keeping our interior temperature at about 65 degrees. Inexpensive wood is readily available. I have a limited number of trees on my six acres and would have to purchase all wood to be used as fuel. Coal may be another possibility. I used it extensively twenty-five years ago and greatly prefer it to wood, cost aside. Our domestic hot water is electric. We are probably paying about $40 to $50 a month to heat our water.

I would only consider the purchase of a true gasifier. Old style boilers would prove very problematic to me for a variety of reasons. I'd greatly appreciate some forthright comments regarding what you perceive to be your payback periods wherever you may live. I'm well aware that people from Wisconsin or Denver endure consistently colder temps and much longer winters than I; however, I suspect that the vast majority of current users will be found in such areas. Their experiences while not directly related to what I might expect should still afford me some real benefit. I'm also curious just what most of you feel your final price tag was. While I'm sure that many would say that such a purchase ends up being an ongoing expense due to constant experimentation and modification, I'm betting that you probably can throw out valid ballpark figures.

Thanks in advance for any info.

Allen Jarvis
Wytheville, Va. 24382

 

[Eric Johnson]

Hi Allen; welcome to the Boiler Room.

Good points, all of them.

I don't know where to start, but I can say that in my case, the materials cost for installing and EKO 60 in my barn and piping it into my existing hydronic heating system, plus the tank and heat exchanger, was around $10,000 and perhaps slightly higher. I did all the work myself, basically learning as I went along. I wouldn't say that I made any expensive mistakes, but I did a lot of things more than once, and bought some stuff that proved to be unnecessary. I get my wood for my labor. I think that in a cold northern NY winter, we would probably save $5,000 over the course of a year on natural gas and electricity for domestic hot water, and are able to keep the (moderately insulated house with original double-hung windows) at a consistent 75-80. So everybody's happy.

Another way to look at it is that $10,000 is about half the price of a decent car, and the wood heat system starts paying you back immediately, instead of steadily draining your bank account the minute you drive it off the lot. It may be a poor analogy, since they're not interchangable, but it puts things into a modern price perspective.

There are about a million ways to set up a wood gasification system, some of which are explained in this forum in some (ongoing) detail. So I would encourage you to poke around and see what catches your fancy. I would say, offhand, that if you're faced with putting in a new heating system, hydronics (and infloor radiant if you can do that) is definitely the way to go. And since you would want a fossil-fuel backup anyway, maybe a good first step would be to install hydronic heat with a basic oil or gas boiler, and then start laying your plans for a gasifier at some point in the future. I really can't address your concerns about A/C (though I understand what you are saying) as we don't really need it this far north.

Hopefully others will jump in with some other suggestions, observations and questions.

 

[ISeeDeadBTUs]

If I lived in VA, my priority would be AC, not heat! Maybe that's why I live in NY and drive North most times.

Sounds like you will need to decide how to distribute the heat, then take that into account when deciding on the heating device. How about above-subfloor radient?

 

[atlarge54]

The best heating system ever invented is called "insulation" and your new home doesn't seem too well equipped. First I doubt you'll want to be w/o central air. The cost of a air cond/heat pump shouldn't be much more than just a/c. It wouldn't be a bad idea to have an HVAC pro look over the situation, I'll bet he'd recommend a two stage unit. If you've ever had in floor radiant you'd probably pay extra to have it again, especially since you're starting from scratch. You don't have a wood supply and you're looking at a wood burner. Purchasing wood has to put a big ouch on the payback. Your age and physical condition should be considered, I love cuttin' wood but the day will come when I won't be able to. It's a good idea to see how the locals stay warm, is this a new location for you? If you go with a boiler a sidearm for DHW will show you a short payback period. Good luck to you, let's save that oil for the 18 wheelers they're gonna need it.

 

[wdc1160]

I’m betting that you probably can throw out valid ballpark figures.

I can do better than that your cash flow analysis will nearly match one of mine with a few exceptions. I will make some generalzations.

This was from 2 years ago, but I have updated some of the numbers-- Bear with me.
You must know three things to find the variable payback rate (more improtant than fixed cost, fixed is easy)

I am not really a shoot from the hip guy. Bad calculations end up in bad judgments. So if you need some of the numbers tweaked for your region. Let me know I will correctem. I plan on having a calclator posted online soon.

Efficiency of appliance
Cost of fuel
= cost of 1 million BTU's

it's good your looking into cash flow -- it is a pillar of modern finance. And, one the best tools for finding oportunity loss.

 

[jebatty]

My rationalization for going with the Tarm Solo Plus 40. 1) had to do something, as old water jacket OWB went defunct last March; 2) we live in a rural area, and any fuel source other than wood makes no sense and electric is very expensive; 3) wanted something better than a campfire; 4) wanted something to brag about; 5) it looked like it really would be fun and an adventure to undertake this project; 6) the wife was willing.

No regrets -- all expectations met or exceeded.

 

[Nofossil]

I've actually stayed in Wytheville - my mother in law is from Bluefield, WV.

While it's a different climate, my oil bills would be about the same as your K-1 if I hadn't gone the gasification route. I did mine earlier and perhaps simpler in some ways than Eric did, and my out-of-pocket was more like $7k.

Seems like you're on the cusp. If somebody makes a compact gasifier woodstove, that might serve your needs. If you want to keep the wood outside, a small gasifier boiler and enclosure would make sense. If the enclosure were insulated and big enough to hold several weeks of firewood as well as tools and lawnmower, it might take some of the curse off of the effort involved.

Storage is not necessary, but it makes your life easier. You might want to start without it, but plan to add it later. If you go with storage, that's yet another good reason to use radiant heat if at all possible - it can use much cooler stored water. I've just skipped two days of firebuilding by living off of my stored hot water.

Once you've bitten the bullet and added heat storage, many people also look at solar hot water panels for heating your hot water in the summertime.

I have a system with a gasifier, storage, and solar hot water. Far more writeup than any normal person would ever want to read on my site - link in my signature below.

 

[ISeeDeadBTUs]

. . . 4) wanted something to brag about; 5) it looked like it really would be fun and . . .6) the wife was willing.

Ihear that can lead to rug rats :gulp:

 

[Eric Johnson]

If you factor in the fact that I paid $6,000 for mine compared to what you paid for yours, nofossil, I bet we're in the same ballpark.

I should add that I bought most of my copper, pumps, flat plate hx, chimney, etc. about 4 years ago (for my previous boiler), and prices have certainly risen since them.

 

[jebatty]

. . . 4) wanted something to brag about; 5) it looked like it really would be fun and . . .6) the wife was willing.

Ihear that can lead to rug rats :gulp:

The spooks in Washington need your services, ISeeDeadBTUs. Your code-breaking skills are uncanny.

 

[wdc1160]

He would goto Washington just to be his ticket to get next to Pirro

 

[caucapon]

Thanks for all replies. Special thanks to Eric, ABGWD4U, and nofossil for specifically addressing my concerns.

Insulation is pretty much a non-starter for us. A large part of this building's resale value is wrapped up in the all wood interior. My exterior walls are all massive logs of varying widths with large masonry chinked seams. Their appearance within the house is really impressive. That coupled with the red cedar interior woodwork offers a really special look. Almost everyone who enters drops his/her jaw. Can't risk losing that. While I could easily add additional insulation to the attic area, payback tends to be measured in decades, same with highly energy efficient windows.

Air conditioning is of minor significance here. While everyone looks for it while looking at existing houses for purchase, it actually tends to be used sparing. We are located in a unique sliver running along Virginia's southwestern border (zone #6). We are almost 2500 feet above sea level, hence cool and non-humid summer conditions. This elevation also tends to drive winter nighttime temps down relative to what I experienced during my many years in South Jersey.

Physical condition is always a big concern once you get past a certain age. At this exact moment I am in good to excellent condition, able to do a full day's physical work. Hopefully, this will continue; however, you never know.

I, too, enjoy the challenge of unconventional ventures. My wife and I have always explored different ways of doing many things, usually to the frustration of our tightly buttoned down relatives. I must confess that that type of insanity still flows through my veins. My wife is still up for such ventures, amazing after forty years together.

Backup heating systems will be Monitor heaters, a fireplace insert (unfortunately, located at one extreme end of the house), and electric resistance in two of the bedrooms.

I really don't want to install ducts in any part of this house. There are too many associated problems. Installing an interior boiler or furnace is possible, but not practical. The house comprises two immense rooms and a very large loft upstairs. There is little closet space. Were I to go this route, I'd probably want to build an addition to the house. This is not going to happen.

Aside from the possibility of going with a wood gasifier, the only other attractive (to me) option would be the installation of a highly efficient, European style, mini-split heat pump system. Done right this would realistically cost about seven to eight thousand with most of the work being done by me. Payback on this type of system would not be quick; also, such an unconventional system might do little to increase property value. It is, however, a neat and clean solution that would provide heat and ac in one fell swoop.


The reason I am requesting info on payback and total installation cost is because heating with wood might just provide my biggest bang for buck spent. Wood can be quite cheap here. I suspect that I might be able to purchase decent hardwood for well under $100 a cord. The numerous national forests in this area can be harvested gratis under certain conditions. There is also the opportunity to purchase heavily wooded land for relatively little. Careful lumbering might actually increase land value while providing me with years' worth of fuel. K1 fuel oil now costs about $3.50 a gallon; that price will only go up over time. The differential between wood and fossil fuels is growing larger with every passing year (here I am, preaching to the choir!).

However, I am concerned that the price of a reasonable install still might require an extended payback period. My wife and I may well stay here for fifteen to twenty years. Given our ages, however, that will always be a concern. Since I suspect that the addition of a wood boiler system will not increase my property's value (indeed, it may well reduce it with many buyers), getting my money's worth out of the investment over a five or six year period is a major consideration. If I can't expect compensation on the back end (resale), then I want it on the front (through my own usage).

In reading this and that concerning this subject, I have gotten the impression that more than a few individuals have spent in excess of fifteen thousand dollars for moderate systems. Even with all that's been stated above, such a high price tag discourages one from proceeding.

Here's the URL to a nifty and adjustable comparative fuel calculator. If this has been mentioned before, please accept my apologies for the duplication.

(broken link removed)

 

[jklingel]

FWIW, I just built a simple spread sheet to look at this very concern. It is not nit-picking elaborate, but I am certain it is close enough for reality. That said, if someone finds huge discrepancies, let me know and I'll re-examine my formulas. I never have liked that math stuff.... In one column, I started w/ the difference in cost between a "normal" boiler/heater/whatever you use and a spendy gasifier. I then invested that money at 8% APR, for kicks. In the second column, I started w/ my annual savings estimate, and then accumulated that year after year, in turn investing that money at 8% APR. Here are some examples of pay back times: (1) Investing $15,000 "extra" and saving $2000/yr, I broke even in the 12th yr. (2) At 10K and 2K, break-even happened at 7 yrs. (3) At 15K and 1500, it took 21 yrs. I hope that is what your original concern was. If you don't have access to SSs, or just don't want to dink, send me your numbers and I'll stick them in to my SS. Glad you asked; payback period is a very valid concern.

 

[Eric Johnson]

You can't factor them in mathematically, but I think it's important to consider intangibles like a warmer house and better physical condition from handling the wood. You can also consider the environmental/national energy benefit from cleanly burning wood. I don't know how many barrels of cubic feet of natural gas I'll avoid burning over the course of my woodburning career (probably 50 years or better in a cold climate when all is said and done), but as a patriotic American, that's an important consideration to me as well.

 

[wsurfer49]

I am about the same place you are in researching alternatives to my current heating (older woodstove inside). I have settled on the wood gasification boiler, place in an outbuilding and will probably start off with a fairly small storage capacity or none at all except the radiant in floor piping and maybe an old water heater.

I think at least where I live (northern Arizona) the acceptance of an efficient alternative heating system will not devalue my property. Certainly there will be people that won't be interested but as fuel prices continue the ever upward trend more people will be looking for this option and this will very likely be a favorable option.

You have some different variables to consider so good luck to you, but take a good look here, lots of very good info. Rob

 

[jklingel]

You can't factor them in mathematically, but I think it's important to consider intangibles like a warmer house and better physical condition from handling the wood. You can also consider the environmental/national energy benefit from cleanly burning wood. I don't know how many barrels of cubic feet of natural gas I'll avoid burning over the course of my woodburning career (probably 50 years or better in a cold climate when all is said and done), but as a patriotic American, that's an important consideration to me as well.

ROGER ALL THAT. WE, ESP YOU YOUNGER FOLKS, BETTER PAY HEED TO TAKING CARE OF MA EARTH. YOU ONLY GET ONE IN A LIFE TIME. LATER. J

 

[steam man]

Let me take a different angle here. Off the top of my head by using as much fossil fuel as you do, it sounds like 5+years of payback. However, since most people don't remember the 70's oil crisis and fossil fuels should rise much faster than wood over the next twenty years, I would guess that using wood to diversify your energy consumption may be prudent. Oil demand is not going down. Keep in mind that wood takes a lot of work but with your potential supply you should be able to shrug off most bumps in the road.

 

[eekster]

I live in a climate that temps are close to yours, maybe a little colder. I have two furnace with water to air exchangers and my house is 2400 sq. ft. I have about $8000.00 invested in mine with venting. I figured 4-5 year payback.. half way there. Also I don"t have to pay for wood which makes a difference for the cost.
Keith

 

[Burn-1]

Going along the lines of steam man, certainly the currently volatile energy situation might make payback even more rapid but I will chime in with another important consideration which I mentioned many posts ago with regard to masonry heaters.

Whatever the added cost of a wood boiler system is, whether a refinanced mortgage, forgone savings, home equity loan, etc, you have made a long-term investment and if you have easy access to wood your operating costs should be pretty minimal between fuel, maintenance and spare parts and electricity for blowers and circulators. But more importantly you have hedged a risk. That is called insurance. If something happens to oil supplies in the near term let alone long term doubts about oil reserves then anyone with a wood boiler will pretty much still enjoy the same quality of life they do now if not better since you're not worried about the thermostat setting as much as you might be with oil, LP or natural gas especially in a rising cost environment. To paraphrase my Yankee grandfather, "You can always cut up your furniture and burn it but you can't go drill for oil in the back 40", (less swearing than in the original quote). We live in a just-in-time world and that will be changing quickly enough in the next few years that worrying about things like payback periods will be less meaningful because the alternatives just won't be there.

 

[eekster]

I second that Burn 1. That was my thought when I invested in my boiler. Fuel prices will not be getting cheaper.
Keith

 

[Jersey Bill]

A simple system would be to install the wood boiler and storage tank outside and put a hot water fan coil unit inside, maybe in the crawl space. It sounds like the floor plan is open, so heating the main room would probably work pretty well for the whole house.

You could even consider insulating the crawlspace and heating it with some of the hot air. That will give radiant heat to the whole 1st floor, and should make it to the back bedrooms. If the crawl space was clean enough, and insulated enough, you could even pressurize the crawl space, now hot air plenum, and put some floor supply registers around the 1st flr.

good luck!

 

[Eric Johnson]

People laugh at my 40+ full cords of wood stacked behind the barn. Admittedly it's a hobby, but I see it as better than money in the bank. I can heat my house for free for at least the next four years. If I was nofossil, more like 10.

 

[sled_mack]

First off - payback. I put my system in 3 years ago and figured on a 6 year payback. Meanwhile, oil prices have gone up so much, that it is now fully paid back. I've got about $6k into my setup, but everything was cheaper 3 years ago.

If your options are open for delivery methods, I can't say enough good things about floor radiant. Working in the crawl space will not be pleasant (I had the same problem in about 3/4 of my floor), but once it's done it is just fantastic. The added benefit, is that you don't see any baseboard or radiators. From how you describe your house, that may be a big factor for you.

Now, if AC is important, check out the high velocity systems. Mine is called Spacepak. I just put one in our house last year. It uses a main trunk of square ducting then flexible tubing to the outlets. Depending on what obstacles you have to work around, you can do this in 2 weekends easily. And, I put mine in the crawl space under the house. My house is an A-frame, so I couldn't get from one side to the other from above.

Do more research on the mini-splits. I was about to put some of them in, at more cost than the high velocity, when I found out that it just wasn't going to work like I wanted. They are good "area" coolers, but not house systems.

There is probably no payback on the AC system for me, but it feels great.

 

[solarguy]

This is our 7th heating season w/ an OWB, we have our own timber lot & based upon our oil consumption, we will have saved $22,000.00 in fuel costs by the end of this heating system.
This number is based upon the average cost of oil per season for the past 7 years, low as $1.14 a gallon to high of $2.40 last winter, $3.00 for this year.

We did the install in house, but the estimated cost would be around 11k the way we've set it up.
If we had to buy wood our breakeven point would occure this heating season.

Fuel oil will only continue to increase in price so the payback periods for wood fired boiler installs will only decrease.

 

[guy01]

I keep seeing you guys talk about when you can't do wood any more ,I just thought I'd throw in My 80 something father in law is still cutting and splitting about 30/40 FACE CORD a year.
He sold wood on the side till he was over 70
Guy