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Final Report

GeoSolar Team

Michael Sutor, Maddie Snable, Cody Rorick, Tom Dunn, Hunter Lewis

Fall 2020

December 11, 2020

Instructor: Jay Meldrum

 


Table of Contents

Acknowledgements        2

List of Tables        4

Executive Summary        5

Introduction        6

Motivation        7

Background        8

Results        10

Our Design        10

Solar System        11

Geothermal Heat Pump        12

Natural Gas        13

Payback Period        14

Conclusions        16

Future Work        17

References        18

Appendix        18


Acknowledgements

We wish to thank a number people for their contribution to this project without whom our project would’ve incurred many more challenges; Jay Meldrum for his valuable constructive criticism, abundance of knowledge on heat pumps, and overall support on this project; John Soyring for his technical advice on our system as well as helping set our project up for success through various resources and contacts who proved to be very helpful in our design specifications. We would like to thank Blue Terra Energy for providing the team with financial data. We would also like to thank Steve Nagy for his help with providing system estimates and Roman Sidortsov for his advice and support concerning system logistics and implementation.

Special thanks to the staff at the Habitat for Humanity for giving us the opportunity to present our project to them and for their essential feedback.



List of Tables

Table 1: Solar System Value                                                                                 9

Table 2: System Payback Period                                                                       12

List of Figures

Figure 1: GeoSolar Sample System Design                                                                   8

Figure 2: Midwest Climate Zones                                                                       11


Executive Summary

The GeoSolar team is trying to introduce a combination of solar and geothermal energy to provide an economically feasible alternative for heat in the Houghton area. With many abandoned mine shafts in the region, easy to access geothermal locations exist throughout Houghton County. Mineshaft water stays between 50°-55° year-round in our geographical area, allowing for great temperatures for geothermal heating and cooling.

The design of the project was tailored for a 1,200 square foot residential home to be proposed to implement in Copper Country Habitat for Humanity homes. For the 1,200 square foot home, a two-ton geothermal heat pump system will be able to efficiently heat and cool the residence. Additionally, our design will include a 6.5kW roof-mounted solar system and a 10-kW battery to offset additional electricity costs as a result of the heat pump operation.

Currently, most residential heating uses natural gas as the region has one of the lowest natural gas rates in the country. Nevertheless, geothermal heating is still viable as geothermal heating and cooling is 400% efficient in terms of energy input to output when compared to traditional heating options.

Implementing a solar system to provide electricity for the heat pump and other household electricity demands, the combined geothermal and solar along with a battery for our system has a lower annual operating cost than conventional heating and cooling. With high upfront costs, the proposed system becomes economically favorable after 15.3 years of use.

The combined, renewable system has an upfront cost of approximately $36,690 while a natural gas system has an upfront cost of approximately $2,100. However, our proposed project costs less annually to allow it to break even with a traditional gas system after the previously mentioned 15.3 years.

Future goals for the GeoSolar team are to continue to raise awareness of geothermal heating opportunities in the Upper Peninsula and to adjust our system to better fit the demands of Habitat for Humanity.


Introduction

The GeoSolar team was created this semester with the goal of designing a local energy grid with control capacity for a house that consists of a geothermal heat pump, solar panels, and a battery that can be used to heat a home at a lower cost. A unique aspect of this project is the heat source for the geothermal heat pump. The team wanted to take advantage of the existing, abandoned mines in the Keweenaw Peninsula due to the reduced cost of digging. The mineshaft water will be extracted and transferred to the heat pump, where it will transfer the heat in the water to an environmentally friendly refrigerant. The mineshaft water will then be returned to the mine after losing three to five degrees of temperature. The fluids will never touch since a heat exchanger will be used. The heated refrigerant will then be compressed which causes it to heat up even more. A fan will then run over this area of the heat pump and blow out hot air. The refrigerant will then go through an expansion coil which will cool the refrigerant. Finally, an additional fan will be used to blow over this area of the heat pump and the cold air will be released outdoors. The solar system will be used to drive down the costs of running the heat pump on electricity, and the battery will allow for stable and reliable access to the electricity generated by the panels.

Motivation

This project helps affirm the possibility and economic feasibility of interconnecting a solar photovoltaic system with a geothermal heat pump for a residence in the Houghton area. Our motivations for the GeoSolar team project this semester were to propose a realistic system to the Copper Country Habitat for Humanity with the hopes of gaining funding for a physical system which could be implemented on a residence locally. We also sought to present to the Copper Country Habitat for Humanity in order to gauge the feasibility of our design and hope to receive critiques on the numbers and assumptions of the project. Another motivation we had was to demonstrate the ease and benefits of this system to the community which might propel additional adoption of similar projects for other local residents.  

Background

This project was proposed with the hopes of providing a sustainable energy housing option for a home in the Houghton area. The project sought to combine solar photovoltaic energy and a geothermal heat pump to offer, in the long term, low cost heating and cooling for a home as well as electricity. The heat pump is a tool that capitalized on the stable temperature of the earth below about ten feet underground. The heat pump therefore never has to heat or cool air which can fluctuate over large temperature ranges. On a hot summer day the pump doesn’t have to take in 90 degree air and on a cold winter day the pump doesn’t have to take in -20 degree air. Rather the geothermal heat pump has constant access, year-round, to about 50-55 degree temperatures. This allows for a much lower temperature difference between what temperature your house is at and what temperature you want your house to be at. The heat pump works by powering a motor to pump pressurized water up from closed loops installed underground. In the winter months the water would be cooler at the surface and warmer below the surface, so the water (or water with antifreeze solution) can circulate from the surface to down below the surface and then back up to the heat pump to heat the liquid while in the summer months the reverse path can be taken given that the temperature below the earth’s surface would be cooler than the temperature at the surface allowing for cooling of the liquid as it goes through the cycle. This liquid when it is run through the heat pump can either heat or cool the air within the pump (depending on if you choose to run the pump forward or backward). It is noteworthy here to say in order to use the mine system for the water, legally, it must be reported that you are using the mine water for the heat pump system and that any water taken from the mine would be returned to the mine directly. The temperature-controlled air can then be sent through the house to provide a lower-cost, high efficiency, and sustainable source of heating and cooling. The challenge arises that in order to run the pump electricity must be used which represents the effective cost of heating and cooling for the house. With electricity costs high in the Houghton area, in order to make this project economically feasible it is necessary to artificially decrease the cost of electricity. This has proven to be successful in the Houghton area through the use of solar photovoltaic power.

Effectively, this project seeks to create a pico (or nano) grid is simply a means it would be generating its own power on a much smaller scale than an external electric grid which can power millions of homes and facilities. The source of electrical power for the project’s pico or nano grid would come from the sun and could supply the energy demands of the residents as well as their HVAC system. The solar photovoltaic power works by using the photons from sunlight to increase the energy within the electrons of atoms which make up the solar cells. These electrons once excited with the additional energy from the photons are forced into higher energy levels (electrons are moving faster with more energy causing many to move further from the nucleus of the atom). This however is an unstable state for the electrons to be in as the nucleus is oppositely charged and working to pull the electrons back down. This results in electrons moving in and out of the excited state which when combined with chains of solar cells with millions of electrons moving in and out of this excited leads to electrons all drifting in one direction around a closed loop so long as a load is connected which is not equally charged. It’s the difference in charge or electrical potential which causes the electrons to all drift in one direction from the higher electrical potential to the lower electrical potential. This process of electrons drifting from high to low electrical potential along a conductive path is how all electrical power is generated.

The solar power is generated whenever the sunlight is hitting the solar panels; however, there are two difficulties with this statement. The first is that sunlight will not always be hitting the solar panels and second that once the power is generated it isn’t always used while the sun is shining. Residential demands for power are highest in the morning when consumers are preparing to go to work as well as after returning from work and into the evening. This poses great difficulties as the solar panels would be generating the vast majority of their energy while the residents are not demanding high loads. The solution is energy storage. With a battery the solar energy which is generated during while the sun is shining can be used as demanded throughout the day as well as across days if sunlight is scarce over a day. To combat the challenge of over long periods of time when sunlight is minimal, a tie to the main grid would be beneficial to allow the residents to have demand throughout the year independent of the sun.

The combined system with the geothermal heat pump, solar panels, and battery provide a realistic and economically beneficial method of having a sustainable residence in the Houghton area.


Results

A majority of the work completed by the team this year was a feasibility analysis of the pico grid design. We wanted to ensure that the project was reasonable and affordable. We created a sample house, discussed installation and operation costs with local installation companies, researched the material and operational costs and finally were able to calculate a payback period for the design.  

Our Design

        The pico grid sample house design created by the team can be seen in Figure 1 below.

Figure 1: GeoSolar Sample System Design

When we initially talked with the Copper Country Habitat for Humanity office we were informed that the size of their homes are usually around 1,000-1,200 square feet. For this reason, we decided to assume the size of our sample house was 1,200 square feet. The sizing for a geothermal heat pump was then very simple. For every 600 square feet of a house, an additional ton is needed. We concluded a 2-ton geothermal heat pump would then be ideal for our design. As discussed above, the team decided to use existing mines in the Keweenaw as the heat source and sink for the system. This is due to the fact that the water in the mine stays at a constant 50°-55° year-round. The geothermal piping system will be a closed loop system that will leave the heat pump and go down into the mine water of the mines and travel back to the heat pump. Using the mines will allow the team to use existing structures and save money on additional digging. We decided to add a solar component to the system due to the high electricity costs in the Keweenaw. The 6.5kW, 20 panel system will allow the house to create its own energy and bring down the overall electricity cost the geothermal heat pump may be adding. Finally, the battery was added to ensure all energy created by the solar panels will be stored if not immediately used by the heat pump. When we talked to local solar installation companies, they suggested a 10kW battery for a solar system of this size. 

Solar System

To obtain accurate information on the material and installation costs of the 6.5kW, 20 panel solar system in the Houghton area, the team contacted Dave Camps at Blue Terra Energy. The quotes received by Dave included the design, installation, and material costs of the solar system. For the 20-panel solar system, a 10kW battery, and a grid-interactive inverter the total came out to be $25.5k before the tax credit. In the United States there is a federal residential solar energy credit that can be claimed on federal income taxes for a percentage of the cost of the entire solar system. Since our project will most likely be completed in 2021, we used the 2021 tax credit of 22% [1]. The total installation and materials cost for the solar system then came out to be roughly $20k after the tax credit.

The operation costs were then determined by first finding the solar radiation levels in the Keweenaw Peninsula. The average monthly solar radiation levels in kWh/m^2/day in the Houghton area can be seen below in Table 1 [2]. We decided to use 325W Canadian Solar panels for our design that have a size of 1.9445 square meters per panel and an efficiency of 16.72% [3]. Using these values and the Houghton (UPPCO) area electricity cost of $0.2493 including tax and transmission costs, we were able to determine the value of the solar panels for every year they are in operation. The value was calculated using the equation seen below and the total average yearly max value of the solar panels was found to be around $2530 as seen in Table 1 [4]. 

Value = Solar Radiation * Solar Panel Efficiency * System Size * Electricity Cost * Days in Month

Table 1: Solar System Value

Geothermal Heat Pump

The geothermal system for our design was based on a 1,200 square foot home in the Houghton area. This would then equate to a 2-ton system based on our climate and the size of the home [5]. Additionally, the pump would run a closed-loop system with a water/propylene glycol mix. The scope of this project was to install the geothermal heat pump in an existing, retired mine in order to cut back on the costs of digging. That being said, the distance from the home to the mine shaft would still need a path dug below the freeze line in order to run tubing from the mine shaft to the heat pump in an insulated manner. In order to gain accurate understanding of the feasibility of this project, our team obtained specific quotes for the cost of purchasing and installing all aspects of the project including for the heat pump design. It proved difficult to be able to accurately predict the distance from the home to the mine shaft; however, our numbers are based on a 300-foot distance. Three prominent sources cited quotes for our system, Amos Air, Dandelion Energy, and Green Planet Supply. Green Planet Supply quoted with a connection kit if we were to hire an external installation contractor due to not being in the construction business themselves. Their quote of $5,300 for the full system with the piping and installation connection kit ($200) [6]; this quote was given over the phone by Marc Miller from Green Planet Supply. Dandelion Energy quoted the system with installation; however, their quote was generated based on an automatic, digital estimate system which would not allow for the installation separating the costs of the tubing dig from the costs of installing the loops (which for our system would not require additional digging) but they reported an estimate of $16,500 [7] for a 2 ton system without the incorporation of the discount of capitalizing off the mine. A third estimate was reported from Amos Air via email correspondence with Steve Nagy about our system and included the digging, material/product costs, and installation. The tubing was quoted to be $15,000 for 300 feet from the house to the shaft and another 200 feet down into the shaft and was cited as being conservative until they know exactly what they’d be digging though. They also estimated $2,500 for a 10 HP pump and another $2,000 for a plate and frame heat exchanger [8] which brings the materials prior to digging to $4,500 and without the cost of tubing (which was independently quoted as being $600 in materials for the tubing). This $5,100 is identical to the costs of the quote from Green Planet Energy without the installation kit. There is a high expectation that the $15,000 tubing material and installation cost would decrease upon site selection and digging detail verification given that they implied digging could be necessary within the mine itself which is not expected based on previous installations of geothermal systems which capitalize on mines in the Houghton area. Given the reputation that Dandelion Energy has for lowering the price of geothermal, it can be expected that they could match the $5,100 cost of materials. This can be interpreted to mean that the digging costs and installation of the tubing in loops from a ground well (as per what the Dandelion estimate was based off of) would be around $11,400. A conservative estimate of the tubing installation without loops can be well expected to be below $10,000. Without explicit validation of this and due to the higher tubing installation estimate from Amos Air, the installation price point of $11,400 was kept and broken down to be $10,000 for digging and tubing installation and $1,400 for the heat pump. This brings the initial total geothermal system costs to $16,500.

The cost to operate the heat pump system is then required to be analyzed in order to determine the monthly costs of the geothermal system and the payback period of the entire project. Based on an average 679kWh/month estimate of energy to run the heat pump system for heating and cooling for a 2,500 square foot home as reported by Dandelion Energy [7], it can be expected that the heat pump would use 340kWh/month for a 1,000-1,200 square foot home. Assuming electricity costs of $0.2493 per kWh based on generation costs, transmission costs, and service fees as reported by UPPCO via an electricity bill provided by Jay Meldrum, the monthly cost to run the heat pump would be $85. This does assume that both heating and cooling would be provided through the heat pump and operating costs would be cut by approximately 20% if cooling was not considered [7].

In summation, the initial cost of the geothermal heat pump would be approximately $16,500 with an annual cost of $10,020 to operate the heating and cooling geothermal system powered by electricity from UPPCO.

Natural Gas

The traditional heating method in the Keweenaw peninsula is natural gas furnaces. This is mainly because natural gas heating is efficient and the Keweenaw peninsula enjoys some of the lowest natural gas prices in the United States at $0.219/ therm. Looking at current customers' Semco bill, the natural gas price was calculated to be $0.80/ therm, after fees and distribution charges.

Locations in the Keweenaw fall into climate zone 7 as shown in the figure below. Regions in climate zone 7 are categorized as having a very cold climate and demand 60 BTU per square foot. For a well-insulated, 1,200 square foot home in the Keweenaw, a 70,000 BTU furnace would be necessary. Young Supply, a residential HVAC retailer, estimated a 70,000 BTU- 92 AFUE furnace would cost $1,100 with another $1,000 for installation. This brings the total upfront cost for a natural gas furnace to be $2,100.

Figure 2: Midwest Climate Zones

Looking at current natural gas usage for Keweenaw homes, a 1,200 square foot house was estimated to consume 76.5 therms per month. At 80 cents per therm this would roughly equate to $60 per month. Therefore, the annual operating cost will be roughly $720.

After speaking with Keweenaw Habitat for Humanity, only 20 BTU per square foot will be necessary for their house. This is due to the house having great insulation and the water heater and furnace being heated by the same system with combined venting.

Payback Period

After completing the financial analysis, the team determined that the total GeoSolar system initial costs were $36,690 which represents $19,890 from the solar and battery portion of the design and $16,500 from the geothermal portion as shown in the table below along with operating costs as explained in the above sections. Once we were able to calculate the initial and operating costs for the solar system, geothermal heat pump, and natural gas system, we were then able to calculate the payback period for our proposed system. The payback period was calculated using the equation below [9]. This calculation results in the number of years it will take to pay off the higher up-front cost of the geothermal system. The payback period was found to be 15.3 years as seen in Table 2.

Payback Period =    GeoSolar Installation Costs - Natural Gas Installation Costs

                        Natural Gas Operation Costs - GeoSolar Operation Costs

Table 2: System Payback Period

Conclusions

 

The goals of the project were to design a feasible system for both geothermal and solar energy. By working with local contractors for pricing and Habitat for Humanity for home information, the project economics could be accurately presented to show savings over time. The overarching goal of the enterprise and of this project is also to raise awareness of the possibility of renewable energy in the Keweenaw as well as to limit carbon emissions, in this case by limiting natural gas usage via a solar powered geothermal heat pump. By utilizing the water from existing mine shafts, the team can eliminate many costs of digging for a ground well.

The system was designed with efficiency in mind: a 1,200 square foot home with a 20-panel, 6.5 kW solar system that is enough to power a 2-ton geothermal heat pump. With an additional 10 kW battery to store any excess energy created by the panels, the heat pump can run at night without pulling from the grid. The heat pump uses a closed-loop system that runs from the nearest mine shaft to negate costs of drilling a ground well and is completely legal assuming all water is recycled throughout the mine shaft and none is wasted.

Because a typical Habitat for Humanity home is around 1,200 square feet, our pump was chosen to be 2 tons (1 ton for every 600 square feet). This would ensure that enough water/propylene glycol would circulate throughout the home and in the closed-loop system. A 10-kW battery was suggested by contractors in the area which would ensure energy storage and increased efficiency, bringing the payback period of the entire system down to 15.3 years.

In conclusion, the team presented the financial findings to Habitat for Humanity and received helpful feedback. Although the numbers need to be refined, the act of spreading awareness to the community about the benefits of renewable energy was accomplished. The team will continue to work with the executive committee for the local Habitat for Humanity chapter and will work towards a feasible design to implement in homes in the Upper Peninsula.

Future Work

In the second semester of this project, we have three main goals that we aim to achieve. The first goal is to raise awareness of the benefits a geothermal heating system combined with a photovoltaic solar system can bring to residents in the Upper Peninsula. Our second goal is to reaffirm and provide an affordable combined geothermal and solar system design for a self-sustaining system by readjusting project assumptions and costs to match that of Copper Country Habitat for Humanity homes. Lastly, our third goal is to aspire to work with Habitat for Humanity on implementing our GeoSolar system design into a home in the Upper Peninsula. Achieving all of these goals will require a number of things. To raise awareness in the Upper Peninsula, we will highlight the benefits of a GeoSolar system in future reports. These benefits include but are not limited to the unique financial savings Upper Peninsula residents would enjoy and the reduced environmental footprint that the system has compared to traditional systems. To provide an affordable and self-sustaining system design, we will research various alternatives for components and materials that will incur the lowest initial cost while simultaneously providing the most value as possible and use components that require minimal upkeep or user intervention. To work with the Habitat for Humanity on an install into an Upper Peninsula residence, we plan on refining our financial models based on the information that we get from continuing discussions with their staff on possible locations for installations and maintaining the ability to be flexible with the design depending on the desired application.  

References

[1] U.S. Department of Energy - Office of Energy Efficiency and Renewable Energy. Homeowner's Guide to the Federal Tax Credit for Solar Photovoltaics, 2020.

[2] “PVWatts.” PVWatts Calculator, pvwatts.nrel.gov/.

[3] Canadian Solar. MAXPOWER CS6U-315 | 320 | 325 | 330P, Canadian Solar INC. , 2016.

[4] Photovoltaic-software.com. “Home.” Photovoltaic, photovoltaic-software.com/principle-ressources/how-calculate-solar-energy-power-pv-systems.

[5] “How to Size Your Air Conditioner or Heater: Measure My New AC.” HVACDirect.com,                 hvacdirect.com/sizing-air-conditioner-and-heater.html.

[6] Miller, Mark. Green Planet Energy. 7 Oct 2020.

[7] “How Much Does A Home Geothermal System Cost?” Dandelion Energy,                                 dandelionenergy.com/geothermal-pricing-guide.

[8] Nagy, Steve. Amos Air. 1 Dec 2020

[9] “Calculate Your Geothermal Payback Period.” Www.proudgreenhome.com, 27 July 2012, www.proudgreenhome.com/articles/calculate-your-geothermal-payback-period/.

Appendix

Appendix Figure A: Overall Financial Analysis

Appendix Figure B: Solar Calculation Numerics for Analysis

Appendix Figure C: Blue Terra Specific Estimates

Appendix Figure D: Solar Monthly Savings Reported from PV Watts

Appendix Figure E: Solar Monthly Savings Reported from Canadian Solar

Appendix Figure F: Value of Solar Panels on a Monthly Basis

Appendix Figure G: Battery Comparisons

Appendix Figure H: Battery Value Analysis

Appendix Figure I: Geothermal Heat Pump Cost Analysis

Appendix Figure J: Energy Consumption Analysis

Appendix Figure K: Natural Gas System Costs

Appendix Figure L: System Installation Costs