Gyroscopic Investing

Posted: **Fri Dec 18, 2020 5:50 pm**

Also I hadn't thought of this before, but I guarantee that there are some insane discounts, rebates, and tax incentives available in MA for converting to heat pumps.

Posted: **Fri Dec 18, 2020 6:10 pm**

Awesome post Pointedstick,

Out of curiosity, how do solar systems cope with snow? Do you have to get up on the roof and shovel off the snow cover?
The number of times I have seen snow, I could count on one hand

These sort of sites may be interesting to Vinny and yourself. BTW, some heat pumps have built in electric boosters for very cold days.
https://neep.org/high-performance-air-s ... -resources

Wish I had known of your expertise before hand!

Posted: **Fri Dec 18, 2020 6:52 pm**

Pointedstick wrote: ↑Fri Dec 18, 2020 5:36 pm Because you currently use oil (an expensive fuel) and don't have access to natural gas (a cheap fuel) and would have to replace it with propane (another expensive fuel) I strongly encourage you to look into heat pumps.

You will run into countless people--including HVAC contractors--who tell you that it can't be done, that they stop heating properly at 40 degrees, that they only work in Georgia and Florida, that they will cost a fortune, that they only produce warm air that isn't comfortable, and so on.

All of them are wrong. Their information is 30 years out of date.

I know because I encountered these people while I was speccing out a heat pump system for my own house. In the end I got a quad-zone ductless mini-split system installed for about $9,000 out the door ($9,600 before the tax credits) and everything those clowns warned me about was totally wrong. They produce nice hot air. They work great below freezing temperatures. Before I had solar they were no more expensive then natural gas to run. With solar, they are free to run. Yes, free. I did it and you can too! And they give you air conditioning too, if you don't already have that. The filters are washable so you never need to buy new filters ever again. They just sit there blowing hot or cold air. I love them. I'd do it again in a heartbeat and I recommend mini-splits to everyone.

I would encourage you to look into multi-zone ductless mini-split systems and abandon the existing ductwork and equipment. The ductless units are far more efficient than central ducted equipment and far more capable of cold weather operation. Don't put any heads in the bathrooms and each bedroom needs only a 6,000 BTU head--the smaller the better. Contractors will swear you need 9 or 12k BTUs per bedroom but they're all crazy. Then you can put one or two heads in the remaining rooms of the house. If there's a large open area you can use a single large head. They distribute air very well.

What you need to do is talk to contractors until you get someone who doesn't look at you like you're made of bees when you tell him that you want a total mini-split conversion. This is the guy who has actually learned something new in the last few decades and is willing to take your money. He'll do a great job too. It's likely that he's kept his other skills up to date if he knows that mini-splits can work in MA. My parents live in RI and their neighbor has mini-splits. They work perfectly. Just make sure you get a cold climate unit. The Mitsubishi Hyper-Heat models have a great reputation.

You don't need a built-in backup heat source. If anything, you've proved that your computers and body heat and a few space heaters are already an adequate backup heat source. A well-insulated house really doesn't need extraordinary amounts of extra heat pumped into it.

That said, I do have a backup heat source: a nice wood-burning fireplace insert. I got it because I was apprehensive about the same thing you were, but it turned out to be totally unnecessary. However my wife loves having a nice fire going, so we use it anyway, not because we have to when it gets really cold, but because it's a luxury.

I am going to answer this in two parts.

First is my personal situation.

Almost all the time it is just me in this house (and 12 pets). Therefore any significant heat is only needed where I am. And, no significant heat if I am not in the house at all.

Here are the current economics of my present system.

Cost of new furnace (November 1998) - $2,263 ($103 per year)
Cleanings / Tunings / Repairs over 22 years - $2,782 ($126 per year)

Therefore if I ceased using the oil furnace today it would have had an average cost of $229 per year to buy it and keep it running.

During those 22 years it's been running it has burned 3,852 gallons at a cost of $8,734. That was an average cost of $2.27 per gallon, $397 per year, and 175 gallons used. The average gallon usage is less than 2/3's of a 275 gallon tank.

Total cost (furnace & oil) - average per year - $626 per year.

By the way, I paid $0.86 per gallon for the oil when I bought the furnace in 1998. it cost me $2.70 per gallon in 2020.

So while I'm using an expensive fuel I do not use a lot of it. Probably half of what would normally be used for a house my size (about 900 square feet)?

Vinny

Posted: **Fri Dec 18, 2020 6:53 pm**

yankees60 wrote: ↑Fri Dec 18, 2020 6:52 pm
Pointedstick wrote: ↑Fri Dec 18, 2020 5:36 pm Because you currently use oil (an expensive fuel) and don't have access to natural gas (a cheap fuel) and would have to replace it with propane (another expensive fuel) I strongly encourage you to look into heat pumps.

You will run into countless people--including HVAC contractors--who tell you that it can't be done, that they stop heating properly at 40 degrees, that they only work in Georgia and Florida, that they will cost a fortune, that they only produce warm air that isn't comfortable, and so on.

All of them are wrong. Their information is 30 years out of date.

I know because I encountered these people while I was speccing out a heat pump system for my own house. In the end I got a quad-zone ductless mini-split system installed for about $9,000 out the door ($9,600 before the tax credits) and everything those clowns warned me about was totally wrong. They produce nice hot air. They work great below freezing temperatures. Before I had solar they were no more expensive then natural gas to run. With solar, they are free to run. Yes, free. I did it and you can too! And they give you air conditioning too, if you don't already have that. The filters are washable so you never need to buy new filters ever again. They just sit there blowing hot or cold air. I love them. I'd do it again in a heartbeat and I recommend mini-splits to everyone.

I would encourage you to look into multi-zone ductless mini-split systems and abandon the existing ductwork and equipment. The ductless units are far more efficient than central ducted equipment and far more capable of cold weather operation. Don't put any heads in the bathrooms and each bedroom needs only a 6,000 BTU head--the smaller the better. Contractors will swear you need 9 or 12k BTUs per bedroom but they're all crazy. Then you can put one or two heads in the remaining rooms of the house. If there's a large open area you can use a single large head. They distribute air very well.

What you need to do is talk to contractors until you get someone who doesn't look at you like you're made of bees when you tell him that you want a total mini-split conversion. This is the guy who has actually learned something new in the last few decades and is willing to take your money. He'll do a great job too. It's likely that he's kept his other skills up to date if he knows that mini-splits can work in MA. My parents live in RI and their neighbor has mini-splits. They work perfectly. Just make sure you get a cold climate unit. The Mitsubishi Hyper-Heat models have a great reputation.

You don't need a built-in backup heat source. If anything, you've proved that your computers and body heat and a few space heaters are already an adequate backup heat source. A well-insulated house really doesn't need extraordinary amounts of extra heat pumped into it.

That said, I do have a backup heat source: a nice wood-burning fireplace insert. I got it because I was apprehensive about the same thing you were, but it turned out to be totally unnecessary. However my wife loves having a nice fire going, so we use it anyway, not because we have to when it gets really cold, but because it's a luxury.
I am going to answer this in two parts.

First is my personal situation.

Almost all the time it is just me in this house (and 12 pets). Therefore any significant heat is only needed where I am. And, no significant heat if I am not in the house at all.

Here are the current economics of my present system.

Cost of new furnace (November 1998) - $2,263 ($103 per year)
Cleanings / Tunings / Repairs over 22 years - $2,782 ($126 per year)

Therefore if I ceased using the oil furnace today it would have had an average cost of $229 per year to buy it and keep it running.

During those 22 years it's been running it has burned 3,852 gallons at a cost of $8,734. That was an average cost of $2.27 per gallon, $397 per year, and 175 gallons used. The average gallon usage is less than 2/3's of a 275 gallon tank.

Total cost (furnace & oil) - $13,779 -- average per year - $626 per year.

By the way, I paid $0.86 per gallon for the oil when I bought the furnace in 1998. it cost me $2.70 per gallon in 2020.

So while I'm using an expensive fuel I do not use a lot of it. Probably half of what would normally be used for a house my size (about 900 square feet)?

Vinny

Posted: **Fri Dec 18, 2020 7:18 pm**

yankees60 wrote: ↑Fri Dec 18, 2020 6:52 pm During those 22 years it's been running it has burned . . . $397 per year. . .

So while I'm using an expensive fuel I do not use a lot of it. Probably half of what would normally be used for a house my size (about 900 square feet)?

Holy shit, that's expensive! You almost spend as much to heat your house in the winter as I spend on everything housing-related. That's some high-priced heat.

Posted: **Fri Dec 18, 2020 7:19 pm**

That said, I do like this talk of solar-powered heat pumps + wood heat. I'm getting the itch to buy a project house again.

Posted: **Fri Dec 18, 2020 8:11 pm**

Pointedstick wrote: ↑Fri Dec 18, 2020 5:36 pm Because you currently use oil (an expensive fuel) and don't have access to natural gas (a cheap fuel) and would have to replace it with propane (another expensive fuel) I strongly encourage you to look into heat pumps.

You will run into countless people--including HVAC contractors--who tell you that it can't be done, that they stop heating properly at 40 degrees, that they only work in Georgia and Florida, that they will cost a fortune, that they only produce warm air that isn't comfortable, and so on.

All of them are wrong. Their information is 30 years out of date.

I know because I encountered these people while I was speccing out a heat pump system for my own house. In the end I got a quad-zone ductless mini-split system installed for about $9,000 out the door ($9,600 before the tax credits) and everything those clowns warned me about was totally wrong. They produce nice hot air. They work great below freezing temperatures. Before I had solar they were no more expensive then natural gas to run. With solar, they are free to run. Yes, free. I did it and you can too! And they give you air conditioning too, if you don't already have that. The filters are washable so you never need to buy new filters ever again. They just sit there blowing hot or cold air. I love them. I'd do it again in a heartbeat and I recommend mini-splits to everyone.

I would encourage you to look into multi-zone ductless mini-split systems and abandon the existing ductwork and equipment. The ductless units are far more efficient than central ducted equipment and far more capable of cold weather operation. Don't put any heads in the bathrooms and each bedroom needs only a 6,000 BTU head--the smaller the better. Contractors will swear you need 9 or 12k BTUs per bedroom but they're all crazy. Then you can put one or two heads in the remaining rooms of the house. If there's a large open area you can use a single large head. They distribute air very well.

What you need to do is talk to contractors until you get someone who doesn't look at you like you're made of bees when you tell him that you want a total mini-split conversion. This is the guy who has actually learned something new in the last few decades and is willing to take your money. He'll do a great job too. It's likely that he's kept his other skills up to date if he knows that mini-splits can work in MA. My parents live in RI and their neighbor has mini-splits. They work perfectly. Just make sure you get a cold climate unit. The Mitsubishi Hyper-Heat models have a great reputation.

You don't need a built-in backup heat source. If anything, you've proved that your computers and body heat and a few space heaters are already an adequate backup heat source. A well-insulated house really doesn't need extraordinary amounts of extra heat pumped into it.

That said, I do have a backup heat source: a nice wood-burning fireplace insert. I got it because I was apprehensive about the same thing you were, but it turned out to be totally unnecessary. However my wife loves having a nice fire going, so we use it anyway, not because we have to when it gets really cold, but because it's a luxury.

Now that I've laid out the specific economics of my situation I will now address what you have above (and, as I suspected......you did not disappoint!)

1. Based on what you wrote I AM open to a heat pump. I do have a fairly expensive electric hot water heater in my basement (cost $1,000 in December 2012) and I'm still running it in heat pump mode. I viewed it being able to run in heat pump mode as a bonus since it helps remove a significant amount of moisture that would otherwise be in that basement. In the eight years I've owned it it's not required any maintenance or service calls and been perfectly reliable during all that time. The only annoying thing with it is that it is constantly beeping with a code telling me to clean the filter that is on the top of it. Yet every time I look at it it looks totally clean with not a spec of dust anywhere.

2. I'm trying to understand the need for a quad zone when I'm just one person. Is that to meet my specific need where I'd want it putting out a lot of heat in this room while I'd have the other three zones putting out little heat?

3. I am NOT an air conditioning fan. I get along fine with open windows bringing me fresh air, ceiling fans, and other devices just blowing air on me. This year I did not once turn on the air conditioner in my car and when I've used it in the past I generally don't have it much higher than low.

4. I'm assuming ductless systems are operating on the same principle as my space heaters do? Just pouring heat into the area direct from the unit.

5. Sorry if I am going on a tangent here. One time I said to a civil engineer what I'd heard everyone else say: "That hot air rises." He quickly corrected me by telling me that was not the case, the science says there is always a force towards equilibrium, meaning that the hot air is seeking the cold air while the cold air is seeking the hot air. Does that mean that when you have heat that is coming from above that soon after the air is going to be of the same temperature no matter it is in the room? That the air in the upper half of the room will not be warmer than the air in the lower half of the room? I ask because when I got my work office I did not like seeing the hot air coming from the ceiling. My thought was that it's not my upper half that needs warmth anywhere close to what is needed by my lower half, particularly my feet. How well is a mini-split going to address that as the ones I've seen are located in the upper wall.

6. Solar. I was convinced that I was definitely going to be going solar in 2016. I got a ton of quotes. i put a ton of time doing the analysis. In the end by my analysis the payback time was far longer than the payback time provided by all the vendors. I found the vendors analysis quite misleading and bordering on being deceiving. They all assume that electricity prices are going to do nothing but go up and at a higher rate than general inflation. I had extensive records going back decades that show there are actually periods of time when electricity rates actually have gone down. Significantly. Therefore I assume the same cost forever for electricity. Its present cost. I wanted all my analysis to be on a present value basis. Therefore if one assumes electricity is going to rise the same as overall inflation then its present value annual cost is going to be the same as this year's present cost. That extends out the payback considerably. Another issue they completely don't address at all is the cost of taking down the system when you need to replace your roof. I got out of just vendor even an estimated cost of paying them to take the system down and put it back up. 10% That is not an inconsiderable cost when you have to fully pay that 10% with no tax credits associated with that cost. Ideally you'd have a system going up at the same time you are replacing your roof. In my case I'd had my roof replaced in 2005 meaning that in 2016 I could be only about nine years away from having to replace it. Now in 2021 I'd be only four years away. Another factor against me was my income level which made me ineligible to receive one of those loans that are either no interest or part forgivable or both. My house has the perfect worst orientation - East / West. One vendor wanted me to remove a tree. Bad news on several fronts. Remove a 70+ year old tree??!! Removing that tree would have then allowed the sun to bake my house for many, many summer hours, greatly increasing the heat inside my house, which would then require using more electricity to cool it. Finally, they complete leave out of their payback this maybe $3,000 or $4,000 cost (just guessing) to remove that tree. I also was coming late to the game. There were all these SREC (?0 credits. Massachusetts only? But their value had come down considerably from prior years. A solar system was also not going to meet one of my big desires for having my own independent system. Which was the ability to have electricity when there was no electricity in my neighborhood. It was explained to me that this could not be possible because otherwise there could be a danger of electrocution to someone in the process of restoring power. Without looking it up, which I could easily do, I think that my true payback period using a valid analysis rather than their borderline deceptive analysis put me in the 11 to 13 year payback time period? Far, far longer than what they'd all been showing to me.

7. I have one bathroom. You say do not put a head in there. How does it then get heat? RIght now forced hot air is going into that bathroom. But as I write this it is only getting warmed to 54 degrees. If I run the space heater in there on high for about 15 minutes prior to going into it and keep it running while I am taking my shower by the time I get out of the shower the bathroom is in the low- to mid-70s.

8. My house is actually quite small. About 900 square feet and I think I can easily describe its layout to you. You walk into the kitchen from the garage. If you kept walking straight you are obviously still in the kitchen which is the bottom of L shape of the house. If, instead, once you walk into kitchen you turn left you are walking through a middle room on your way to the living room. As soon as you get in the living room turn left and you be in a hallway. Go straight and you are in the bathroom. Or, go left or right and you are in one of the two bedrooms. Simple, simple layout? I'm rarely in the other bedroom. A whole week can go by without me being in it at all. Right now it's just another storage location for "things"! Also, in the opening between the living room and the room just before it I installed "strip" curtains. This is what is used in walk in coolers to keep the cool air inside it and not so easily let it escape to the outdoors. I did this because I used to spend far more time in my living room. I'd use a space heater so as to get the temperature in the room more comfortable for me while not letting that additional heat escape into that other room or the adjoining kitchen.

http://montague.patriotproperties.com/P ... 619001.jpg

I think if you go to the link above you can see the basic outline of my house.

If you were able to follow all of that.....where would you propose putting these heads and of what size?

9. One issue I can see is that due to all my collections every single possible wall in my house has shelves. They contain 7,000 records, 5,000 CDs, 5,000 books, 2,000 movie DVDs, and lots of other things. The shelves go from floor to ceiling and they are all filled. The wall in the kitchen holds the history section of the books. The bathroom alone has well in excess of 500 books in there. One day I was sitting on the toilet, looked at the empty wall, and said to it: "You are NOT carrying your load in this house!" Therefore I'm assuming these units would be displacing some of my shelving spaces?

10. Are there two types of mini-splits? I've seen the type wherein they are located at the top of the wall in a room. Then I've seen the ones at my office wherein they are outside and we had to build a roof over them to protect them from the elements.

11. I do live in an area where I think I may have good luck in finding a contractor such as you describe. The community has a lot of unconventional, independent thinking type people.

12. I grew up in Rhode Island. Spent the first 30% of my life there. Now I'm 100 miles northwest of where I lived in Rhode Island (where are your parents?). It is much colder here than where I grew up in Rhode Island. We'll have snow when they just have rain. Significantly more snow fall here than there.

13. What is the life of a mini-split? What kind of annual maintenance do they require? How much does it cost to maintain. What is the range of watts each unit draws when they are running? Do they run on 110V or 220V. My house as a 100 AMP service. I had prior easily existed for decades on a 60 AMP service. No dishwasher or dryer. We have high electricity costs in Massachusetts. Maybe close to 20 to 25 cents variable costs per KW/Hr consumed.

14. You mentioned filters. One time my oil burner person said to me...your filter is totally clean. You must have a clean house. Far from it! I never vacuum and my cats are constantly sending fur everywhere. Yet I never had to change the oil burner filter. How often do these filters have to be cleaned? How long does it take to wash them? Taking care of tasks like that is definitely NOT one of my virtues!

15. If you had bought those Mitsubishi Hyper-Heat models what would your total cost have been?

Vinny

Posted: **Fri Dec 18, 2020 8:15 pm**

Pointedstick wrote: ↑Fri Dec 18, 2020 5:50 pm Also I hadn't thought of this before, but I guarantee that there are some insane discounts, rebates, and tax incentives available in MA for converting to heat pumps.

I would think that you are 100% correct on this one.

I did have a MA Save audit in late August. That focus was on getting set up to reduce my costs to buy a new refrigerator (26 years old) and a new washing machine (Probably 30 years old). I had to have the audit to be eligible for rebates on those purchases (which I've yet to make). It was an virtual inspection and they had me take pictures of various items and send them to the auditor. I assume that they still have them and wonder if I could reopen my case to that they could set me up for rebates on heat pumps?

Vinny

Posted: **Fri Dec 18, 2020 8:44 pm**

Pointedstick wrote: ↑Fri Dec 18, 2020 5:50 pm Also I hadn't thought of this before, but I guarantee that there are some insane discounts, rebates, and tax incentives available in MA for converting to heat pumps.

How do these rebates look?

https://www.masssave.com/-/media/Files/ ... B56984AD98

Too late for this year.

I don't see anything yet published for 2021. Would it be safe to assume that they would be similar?

Vinny

Posted: **Fri Dec 18, 2020 8:52 pm**

Pointedstick wrote: ↑Fri Dec 18, 2020 5:50 pm Also I hadn't thought of this before, but I guarantee that there are some insane discounts, rebates, and tax incentives available in MA for converting to heat pumps.

I also just saw that this vendor is an authorized installer for the mini-splits!

https://arcticma.com/

I have known the owner for 40 years.

He is who I bought my oil furnace from in November 1998 and who in December 2012 installed my fancy electric water heater and who I bought my 100 AMP service from which they installed the same day as the water heater. He's also done extensive work for two business's / organizations I've been the finance person for. I've sent many, many, many check payments his way. He IS the premier vendor in the area for large commercial coolers. On top of all that he is an excellent person. I 100% trust him.

Vinny

Posted: **Fri Dec 18, 2020 8:57 pm**

Pointedstick wrote: ↑Fri Dec 18, 2020 5:50 pm Also I hadn't thought of this before, but I guarantee that there are some insane discounts, rebates, and tax incentives available in MA for converting to heat pumps.

You know what else I like a lot about your mini-split strong suggestion?

in the back of my mind it's always bothered me that I have this frequent (albeit controlled) fire going on in my house. I've actually never heard of a furnace causing a fire. But it could. These units would NOT offer that possibility.

Plus, I asked a similar question on Facebook and this was a response I got from a former college classmate who I have probably not seen for nearly 50 years:

"I have no idea about propane vs oil. What I do know is how many oil releases I’ve cleaned up. It’s well worth spending $2,000 to $3,000 for a new tank as opposed to hundreds of thousands to clean up an oil release. The sludge could actually be rust from the inside of the tank which means that one or more holes are forming that will eventually go all the way through. DO NOT REPAIR THE TANK!! But if you do I’ll give you my phone number to call when the oil leaks out. Also look into whether RI has an insurance fund for homeowners who have oil tanks. We’re starting one in MA because this can be a devastating expense for some people."

The mini-split takes away all possibilities of either having one of these horrendous oil spills or having a propane tank blow up! I'm well experienced with electric heating units and have no fears with them.

Vinny

Posted: **Fri Dec 18, 2020 10:54 pm**

if you know an open-minded contractor, you've struck gold. Stop listening to me and give him a call!

But still, when he tells you you need a 9,000 BTU head in each bedroom, insist on 6k or 7k instead.

Posted: **Fri Dec 18, 2020 10:59 pm**

Hal wrote: ↑Fri Dec 18, 2020 6:10 pm Awesome post Pointedstick,

Out of curiosity, how do solar systems cope with snow? Do you have to get up on the roof and shovel off the snow cover?
The number of times I have seen snow, I could count on one hand

Where I live, the snow melts within a day or two on the ground, and on the roof it melts faster because the sun will come out and my roof is reflective metal so the area above it (but not below it!) gets quite hot. I guess if you live in a place where this isn't the case, it's kind of a moot point because the PV array isn't going to be generating a lot of electricity when it's cloudy. But if hypothetically it were ever to happen that my panels were covered with snow and the sun wasn't enough to melt it quickly, then yeah, I'd have to brush the snow off. It's a one story house so the panels aren't far off the ground and I can reach the bottom of them with a long broom. I imagine I could build some kind of 15 foot long snow clearing broom thingy should it ever become necessary.

Hal wrote: ↑Fri Dec 18, 2020 6:10 pm These sort of sites may be interesting to Vinny and yourself. BTW, some heat pumps have built in electric boosters for very cold days.
https://neep.org/high-performance-air-s ... -resources

Wish I had known of your expertise before hand!

Me too.

I did tons and tons of research but in the end I had I just jump in, based on my intuition that all the hoary old contractors who were telling me was impossible were just full of shit. Turns out, they were.

Posted: **Fri Dec 18, 2020 11:00 pm**

Maybe I should start a "permanent home heating and energy generation" thread...

Posted: **Sat Dec 19, 2020 7:30 am**

Kriegsspiel wrote: ↑Fri Dec 18, 2020 7:18 pm
yankees60 wrote: ↑Fri Dec 18, 2020 6:52 pm During those 22 years it's been running it has burned . . . $397 per year. . .

So while I'm using an expensive fuel I do not use a lot of it. Probably half of what would normally be used for a house my size (about 900 square feet)?
Holy shit, that's expensive! You almost spend as much to heat your house in the winter as I spend on everything housing-related. That's some high-priced heat.

In Massachusetts heating season starts in October and goes through April. So nearly 7 months. That would be about $60 a month.

You have heat, hot water, electricity for only about $60 a month? How long is your heating season for where you are?

Most people in my area who heat with oil have far, far, far higher heating bills that I do. They have larger houses and keep the temperature higher. So while I use 2/3's of a tank of oil per year...it is not unusual for them to use two or three tanks of oil.

Vinny

Posted: **Sat Dec 19, 2020 7:41 am**

yankees60 wrote: ↑Sat Dec 19, 2020 7:30 am
Kriegsspiel wrote: ↑Fri Dec 18, 2020 7:18 pm
yankees60 wrote: ↑Fri Dec 18, 2020 6:52 pm During those 22 years it's been running it has burned . . . $397 per year. . .

So while I'm using an expensive fuel I do not use a lot of it. Probably half of what would normally be used for a house my size (about 900 square feet)?
Holy shit, that's expensive! You almost spend as much to heat your house in the winter as I spend on everything housing-related. That's some high-priced heat.
In Massachusetts heating season starts in October and goes through April. So nearly 7 months. That would be about $60 a month.

You have heat, hot water, electricity for only about $60 a month? How long is your heating season for where you are?

HAH, man I should have let my brain spin up a bit first. I was reading "$397 per year" as per month. $60 sounds about right for how brisk you keep it. I set my thermostat at 61, and it comes on every once in a while in October and November, then runs a lot until March or so. For me, gas + water + electricity comes out to $160/mo over the year.

Posted: **Sat Dec 19, 2020 8:47 am**

Here's my average monthly utility breakdown:

Gas: $0 (no gas hookup)
Electricity: $8.15 (the base charge; house is net zero but grid tied)
Water + sewer: $80 (water is expensive in the desert)

Posted: **Sat Dec 19, 2020 9:11 am**

Pointedstick wrote: ↑Sat Dec 19, 2020 8:47 am Here's my average monthly utility breakdown:

Gas: $0 (no gas hookup)
Electricity: $8.15 (the base charge; house is net zero but grid tied)
Water + sewer: $80 (water is expensive in the desert)

Those are your variable costs.

What would be your monthly depreciation costs for both your solar system and your mini-split system?

If gave your mini-splits a 20 year life...round your cost to $10,000...then $500 a year,

You told us what your solar system costs somewhere but I'm not remembering and guessing it was $30,000 and giving it a 15 year life. That would be $2,000 a year,

You have a metal roof and that is a forever roof, never needing to replaced? If so then you are saving the roughly $3,000 expense to take down your solar system and put it back on when your roof is replaced.

For you on an annual basis.

Gas: $0
Electricity $100
Water & Sewer: $1,000

Mini-Splits - Depreciation - $500
Solar System - Depreciation - $2,000

Therefore, your total costs are about $3,600 a year or $300 a month.

I'm sure you will correct several of my assumptions / guesses.

A few additional questions I have is:

1) To have no electricity costs you'd have to have your solar system constantly producing? Does it do that?

2) Or, do you have net metering where you get paid for your excess electricity created or you have some kind of credit in the form of an electricity bank where you get to then draw down your excess during those times when your system is not producing. It's obviously NOT producing at all at night.

3) What is the temperature you heat your house>

My annual expenses:

Gas: $0
Electricity: $1,500
Water & Sewer: $200 (I pay the minimum charges since my usage is so low)
Heating (including depreciating furnace and all repairs): $700

Total costs: $2,400 or $200 a month.

Vinny

Posted: **Sat Dec 19, 2020 9:14 am**

This is great thread. Such good info, PointedStick.
(I pay $55-$60 for water these days, and my gas bill is usually well over $100 in late winter months).

Posted: **Sat Dec 19, 2020 11:46 am**

My mini-splits cost $9,000 and my solar system cost $17,500 All costs are after tax credits and rebates.

I don't track depreciation since everything depreciates; there is no option to avoid depreciating assets except for simply declining to purchase them in the first place. It doesn't seem like a productive use of my finance brain cells. When this bugs me about something, I try my best to avoid having to purchase it at all, or I learn how to maintain and repair it.

I estimate that my mini-splits will last for 20-25 years. By that point, the new ones available will probably be so much more efficient that I will be jumping at the chance to replace them.

My solar panels will last essentially indefinitely. There are no moving parts; they are glass-covered rocks that generate electricity. They degrade instead, but my panels are warrantied to still be producing 80% of their rated output in 25 years. So even in a quarter century they will still be working, perhaps just not as well as they do now. If by that time I've upgraded to more efficient mini-splits and a more efficient heat pump water heater, my electricity usage may have declined so much that even 80% of the original rated capacity still meets the load. One can hope.

The solar PV system's inverter is another story, and it may need to be replaced for the cost of about $1,000 sometime in the next 20 years.

Posted: **Sat Dec 19, 2020 11:52 am**

yankees60 wrote: ↑Sat Dec 19, 2020 9:11 am A few additional questions I have is:

1) To have no electricity costs you'd have to have your solar system constantly producing? Does it do that?

2) Or, do you have net metering where you get paid for your excess electricity created or you have some kind of credit in the form of an electricity bank where you get to then draw down your excess during those times when your system is not producing. It's obviously NOT producing at all at night.

I have a net metering contract.

During the spring, summer, and fall, my solar system is net zero on a daily basis. If I had about 10 kWh of battery storage I could pull from that at night, be off grid, and not need net metering during these times of year.

During the winter, I consume more electricity than I produce, but the net metering contract balances my winter overconsumption against my spring, summer, and fall overproduction.

To go off-grid in winter, I would need to add more panels, upgrade to a heat pump dryer and heat pump water heater, and add a very large battery system. It's not economical at today's prices. Nor does it feel necessary.

yankees60 wrote: ↑Sat Dec 19, 2020 9:11 am 3) What is the temperature you heat your house?

70F

Posted: **Sat Dec 19, 2020 12:22 pm**

Pointedstick wrote: ↑Sat Dec 19, 2020 11:46 am My mini-splits cost $9,000 and my solar system cost $17,500 All costs are after tax credits and rebates.

I don't track depreciation since everything depreciates; there is no option to avoid depreciating assets except for simply declining to purchase them in the first place. It doesn't seem like a productive use of my finance brain cells. When this bugs me about something, I try my best to avoid having to purchase it at all, or I learn how to maintain and repair it.

I estimate that my mini-splits will last for 20-25 years. By that point, the new ones available will probably be so much more efficient that I will be jumping at the chance to replace them.

My solar panels will last essentially indefinitely. There are no moving parts; they are glass-covered rocks that generate electricity. They degrade instead, but my panels are warrantied to still be producing 80% of their rated output in 25 years. So even in a quarter century they will still be working, perhaps just not as well as they do now. If by that time I've upgraded to more efficient mini-splits and a more efficient heat pump water heater, my electricity usage may have declined so much that even 80% of the original rated capacity still meets the load. One can hope.

The solar PV system's inverter is another story, and it may need to be replaced for the cost of about $1,000 sometime in the next 20 years.

Depreciation is part of the equation of "Total Cost to Own". We all know vehicles depreciate. When determining how much it costs to own a car you cannot ignore the decline in value of the car over the years you owned it.

Therefore, if I owned a car for five years with operating costs of $7,500 that would not have been my sole costs. If I bought the car for $20,000 and five years later sold it for $8,000 then I had an additional $12,000 cost. Therefore my "Total Cost to Own" that car for those five years was $19,500.

I know you know all of this.

I bought it up because it does not make sense for us to compare monthly or annual operating costs without taking into account the annual decline in value for what we are using to produce our heat or hot water or electricity. Otherwise we really cannot compare.

Now with you correcting a lot of my false assumptions, if I were to redo my work, your total annual costs would be much lower than my original analysis which had been full of guesses and wrong assumptions.

Vinny

Posted: **Sat Dec 19, 2020 12:27 pm**

Pointedstick wrote: ↑Sat Dec 19, 2020 11:52 am
yankees60 wrote: ↑Sat Dec 19, 2020 9:11 am A few additional questions I have is:

1) To have no electricity costs you'd have to have your solar system constantly producing? Does it do that?

2) Or, do you have net metering where you get paid for your excess electricity created or you have some kind of credit in the form of an electricity bank where you get to then draw down your excess during those times when your system is not producing. It's obviously NOT producing at all at night.
I have a net metering contract.

During the spring, summer, and fall, my solar system is net zero on a daily basis. If I had about 10 kWh of battery storage I could pull from that at night, be off grid, and not need net metering during these times of year.

During the winter, I consume more electricity than I produce, but the net metering contract balances my winter overconsumption against my spring, summer, and fall overproduction.

To go off-grid in winter, I would need to add more panels, upgrade to a heat pump dryer and heat pump water heater, and add a very large battery system. It's not economical at today's prices. Nor does it feel necessary.

yankees60 wrote: ↑Sat Dec 19, 2020 9:11 am 3) What is the temperature you heat your house?
70F

It's now been over four years since I immersed myself in all of this but then stopped so I no longer had full memory of all the ways that it works. But I do follow all you described above.

I seem to remember that each state has its own rules regarding solar and how it works with the electric company.

I know at the time there was a big controversy in Massachusetts regarding the changes the electric companies wanted to make regarding "net metering". Now forgetting all the details.

Vinny

Posted: **Sat Dec 19, 2020 12:28 pm**

MangoMan wrote: ↑Sat Dec 19, 2020 11:53 am
Pointedstick wrote: ↑Sat Dec 19, 2020 11:46 am My mini-splits cost $9,000 and my solar system cost $17,500 All costs are after tax credits and rebates.

I don't track depreciation since everything depreciates; there is no option to avoid depreciating assets except for simply declining to purchase them in the first place. It doesn't seem like a productive use of my finance brain cells. When this bugs me about something, I try my best to avoid having to purchase it at all, or I learn how to maintain and repair it.

I estimate that my mini-splits will last for 20-25 years. By that point, the new ones available will probably be so much more efficient that I will be jumping at the chance to replace them.

My solar panels will last essentially indefinitely. There are no moving parts; they are glass-covered rocks that generate electricity. They degrade instead, but my panels are warrantied to still be producing 80% of their rated output in 25 years. So even in a quarter century they will still be working, perhaps just not as well as they do now. If by that time I've upgraded to more efficient mini-splits and a more efficient heat pump water heater, my electricity usage may have declined so much that even 80% of the original rated capacity still meets the load. One can hope.

The solar PV system's inverter is another story, and it may need to be replaced for the cost of about $1,000 sometime in the next 20 years.
You didn't mention it, but this obviously requires a long term commitment to stay in the house or you will never come close to recouping the initial costs. Many people can't (or don't want to) tie themselves down like that.

Plus, in the case for some of us, living long enough to reap the benefits!

Vinny

Posted: **Sat Dec 19, 2020 3:24 pm**

MangoMan wrote: ↑Sat Dec 19, 2020 11:53 am You didn't mention it, but this obviously requires a long term commitment to stay in the house or you will never come close to recouping the initial costs. Many people can't (or don't want to) tie themselves down like that.

True.

However this is mostly for the solar array though. The heat pumps replaced equipment that had already broken and was in need of replacement (swamp cooler) or was on its last legs (furnace). I had to replace those with something. There wasn't an option to do nothing. I see this as just part-and-parcel of owning a house: you know that periodically you may have to replace some of the appliances, the roof, the water heater, the windows, etc.

Last time I checked Zillow, the estimated value of my house was up $46,000 from when I bought it three years ago. I have no idea how much of that is 1) inaccurate 2) due to market trends or 3) due to some algorithm noticing the new solar panels on the satellite photo or via cross-referencing building permit data. Either way it seems like if I sold my house now, I'll earn at least a small profit even including all the money I've put into it (solar PV, heat pumps, fireplace insert, new electrical panel, windows, dishwasher, fridge, water heater, and washing machine). That's all I hope for since I don't see houses as investments.

Gyroscopic Investing

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