Geothermal Heat Pump
One of my businesses might be moving as a result of our landlord’s financial difficulties and their need to sell the building. One of our favorite potential new sites has a geothermal heat pump. The building is promising us that to heat and cool our 6000 sqft space it will cost about $125 / month. We currently pay between $500 - 1000 / month to heat and cool our 5700 sqft space. That’s amazing. It seems almost magic.
Apparently it cost him $400K to put the system in. There are about 4000 sqft in the building - lets assume average savings of $600 - $125 = 475 / month for 6000 sqft, or about $1 / sqft / year savings - $40,000 / year for the full building. Let’s assume that such a system lasts 30 years and energy costs rise at the rate of inflation, the NPV of the system is then 795k - quite a good investment, assuming that he can charge $1 / sqft / year extra.
We are considering paying $3 / sqft / year more than we are paying now - not just because of the decreased utilities, the building is also somewhat nicer, but the developer clearly is able to pass the cost along. We also feel good about (potentially) moving there.
Also, I assume above that energy costs increase only at the rate of inflation. If they rise faster, the investment would be even more positive. I also understand that there are some tax breaks available for such systems.
It’s a bit puzzling that they are not more common.
