Air Source Heat Pumps

Cogeneration Technologies, is based in Houston, Texas and provides the following power and energy project development services:

  • Project Engineering Feasibility & Economic Analysis Studies
  • Engineering, Procurement and Construction
  • Environmental Engineering & Permitting
  • Project Funding & Financing Options; including Equity Investment, Debt Financing, Lease and Municipal Lease
  • Shared/Guaranteed Savings Program with No Capital Investment from Qualified Clients
  • Project Commissioning
  • 3rd Party Ownership and Project Development
  • Long-term Service Agreements
  • Operations & Maintenance
  • Green Tag (Renewable Energy Credit, Carbon Dioxide Credits, Emission Reduction Credits) Brokerage Services; Application and Permitting

We are specialists in Renewable Energy Technologies, Demand Side Management and in developing clean power/energy projects that will generate a Renewable Energy Credit, Carbon Dioxide Credits and/or Emission Reduction Credits. Through our strategic partners, we offer “turnkey” power/energy project development products and services that may include; Absorption Chillers, Adsorption Chillers, Automated Demand Response, Biodiesel Refineries, Bio fuel Refineries, Biomass Gasification, Bio Methane, Canola Biodiesel, Coconut Biodiesel, Cogeneration, Concentrating Solar Power, Demand Response Programs, Demand Side Management, Energy Conservation Measures, Energy Master Planning, Engine Driven Chillers, Solar CHP, Solar Cogeneration, Rapeseed Biodiesel, Solar Electric Heat Pumps, Solar Electric Power Systems, Solar Heating and Cooling, Solar Tri generation, Soy Biodiesel, and Tri generation.

Water Source Heat Pumps

The Energy Information Administration’s (EIA) new survey, Form EIA-902, “Annual Geothermal Heat Pump Manufacturers Survey,” shows manufacturers shipped 155,406 geothermal heat pumps during the period 1994 through 1996. The survey was completed by approximately 50 known domestic manufacturers of geothermal heat pumps. Geothermal heat pumps use the earth as a heat source or sink depending on the season. The capacity of heat pumps is rated in tons, with 1 ton equivalent to 12,000 Btu per hour. The average rated capacity of the heat pumps shipped was 3.4 tons. By comparison, a typical home central air conditioner has a rating of 3.0 tons.

Collaborative alliances among government, the Geothermal Heat Pump Consortium, the International Ground Source Heat Pump Association, and the geothermal industry have expanded consumer awareness and acceptance of geothermal heat pumps. Such efforts have resulted in greater use of geothermal where heat pumps by electric utilities and electric service companies provide attractive financing, rebates, guaranteed utility rates, shared savings contracts, and equipment leasing arrangements.

The Operation of Geothermal Heat Pumps

Heat pumps use a refrigerant to absorb and reject heat in a vapor compression cycle to transfer heat from outside to inside the house (during heating season) and from inside to outside the house (during cooling season). The refrigerant within the heat pump passes through a heat exchanger where it absorbs heat from (heating mode) or rejects heat to (cooling mode) the air. In a geothermal heat pump, the refrigerant exchanges heat with a fluid circulating through an earth connection. The fluid is contained in a variety of loop (pipe) configurations depending on the temperature of the ground. Loops may be installed horizontally or vertically in the ground or submersed in a body of water. Although the fluid in most types of loop configurations circulates in a closed system, open loops (normally vertical systems) are sometimes used when a sufficient supply of fluid is available


The efficiency of a heat pump, that is, the electrical energy to operate it, is directly related to temperatures between which it operates. Geothermal heat pumps are more efficient than conventional heat pumps or air conditioners that use the outdoor air since the ground or ground water a few feet below the earth’s surface remains relatively constant throughout the year. It is more efficient in the winter to draw heat from the relatively warm ground than from the atmosphere where the air temperature is much colder, and in summer transfer waste heat to the relatively cool ground than to hotter air. Geothermal heat pumps are generally more expensive ($2,000-$5,000) to install than outside air heat pumps. However, depending on the location geothermal heat pumps can reduce energy consumption (operating cost) and correspondingly, emissions by more than 20 percent compared to high-efficiency outside air heat pumps. Geothermal heat pumps also use the waste heat from air conditioning to provide free hot water heating in the summer.

Classification of Geothermal Heat pumps

The Form EIA-902 tracks shipments of the three main types of geothermal heat pumps, as classified by the Air Conditioning and Refrigeration Institute (ARI), and a small volume of non-ARI rated heat pumps. The three ARI-rated classifications utilized as geothermal heat pumps are: ARI-320, Water-Source Heat Pumps, utilizing ground water in either open- or closed- loop, often installed in commercial buildings. ARI-325, Ground Water-Source Heat Pumps, an open-loop system utilizing water well or other body of water; and ARI-330, Ground-Source Closed-Loop Heat Pumps, where water or a water/glycol (antifreeze) solution flows continuously through a closed-loop of pipe buried underground.

Ground source Heat Pumps

Two commercial 36-ton geothermal heat pumps being used at the College of Southern Idaho.

Two 36-ton geothermal heat pumps.

The geothermal heat pump, also known as the ground source heat pump, water-source heat pump, and earth-coupled heat pump, is a highly efficient renewable energy technology that is gaining wide acceptance for both residential and commercial buildings. Geothermal heat pumps are used for space heating and cooling, as well as water heating. Its great advantage is that it works by concentrating naturally existing heat, rather than by producing heat through combustion of fossil fuels.

The technology relies on the fact that the Earth (beneath the surface) remains at a relatively constant temperature throughout the year, warmer than the air above it during the winter and cooler in the summer, very much like a cave. The geothermal heat pump takes advantage of this by transferring heat stored in the Earth or in ground water into a building during the winter, and transferring it out of the building and back into the ground during the summer. The ground, in other words, acts as a heat source in winter and a heat sink in summer.

The system includes three principal components:

  • Geothermal earth connection subsystem
  • Geothermal heat pump subsystem
  • Geothermal heat distribution subsystem.
  • Earth Connection
    • Using the Earth as a heat source/sink, a series of pipes, commonly called a “loop,” is buried in the ground near the building to be conditioned. The loop can be buried either vertically or horizontally. It circulates a fluid (water, or a mixture of water and antifreeze) that absorbs heat from, or relinquishes heat to, the surrounding soil, depending on whether the ambient air is colder or warmer than the soil.
  • Heat Pump
    • For heating, a geothermal heat pump removes the heat from the fluid in the Earth connection, concentrates it, and then transfers it to the building. For cooling, the process is reversed.
  • Heat Distribution
    • Conventional ductwork is generally used to distribute heated or cooled air from the geothermal heat pump throughout the building.
  • Residential Hot Water
    • In addition to space conditioning, geothermal heat pumps can be used to provide domestic hot water when the system is operating. Many residential systems are now equipped with desuperheaters that transfer excess heat from the geothermal heat pump’s compressor to the house’s hot water tank. A desuperheater provides no hot water during the spring and fall when the geothermal heat pump system is not operating; however, because the geothermal heat pump is so much more efficient than other means of water heating, manufacturers are beginning to offer “full demand” systems that use a separate heat exchanger to meet all of a household’s hot water needs. These units cost-effectively provide hot water as quickly as any competing system.

Types of Geothermal Heat Pump Systems

There are four basic types of ground loop systems. Three of these—horizontal, vertical, and pond/lake—are closed-loop systems. The fourth type of system is the open-loop option. Which one of these is best depends on the climate, soil conditions, available land, and local installation costs at the site. All of these approaches can be used for residential and commercial building applications.

  • Closed-Loop Systems
  • Horizontal
    • This type of installation is generally most cost-effective for residential installations, particularly for new construction where sufficient land is available. It requires trenches at least four feet deep. The most common layouts either use two pipes, one buried at six feet, and the other at four feet, or two pipes placed side-by-side at five feet in the ground in a two-foot wide trench. The Slinky™ method of looping pipe allows more pipe in a shorter trench, which cuts down on installation costs and makes horizontal installation possible in areas it would not be with conventional horizontal applications.

  • Vertical
    • Large commercial buildings and schools often use vertical systems because the land area required for horizontal loops would be prohibitive. Vertical loops are also used where the soil is too shallow for trenching, and they minimize the disturbance to existing landscaping. For a vertical system, holes (approximately four inches in diameter) are drilled about 20 feet apart and 100–400 feet deep. Into these holes go two pipes that are connected at the bottom with a U-bend to form a loop. The vertical loops are connected with horizontal pipe (i.e., manifold), placed in trenches, and connected to the heat pump in the building.

  • Illustration of a horizontal closed loop system shows the tubing leaving the house and entering the ground, then branching into three rows in the ground, with each row consisting of six overlapping vertical loops of tubing. At the end of the rows, the tubes are routed back to the start of the rows and combined into one tube that runs back to the house.
  • Pond/Lake
    • If the site has an adequate water body, this may be the lowest cost option. A supply line pipe is run underground from the building to the water and coiled into circles at least eight feet under the surface to prevent freezing. The coils should only be placed in a water source that meets minimum volume, depth, and quality criteria.

  • Illustration of a vertical closed loop system shows the tubing leaving a building and entering the ground, then branching off into four rows in the ground. In each row, the tubing stays horizontal except for departing on three deep vertical loops. At the end of the row, the tubing loops back to the start of the row and combines into one tube that runs back to the building.
  • Open-Loop System
    • This type of system uses well or surface body water as the heat exchange fluid that circulates directly through the GHP system. Once it has circulated through the system, the water returns to the ground through the well, a recharge well, or surface discharge. This option is obviously practical only where there is an adequate supply of relatively clean water, and all local codes and regulations regarding groundwater discharge are met.

  • Illustration of a pond or lake closed loop system shows the tubing leaving the house and entering the ground, then extending to a pond or lake. The tubing drops deep into the pond or lake and then loops horizontally in seven large overlapping loops, then returns to the water's edge, extends up near the surface, and returns back to the house.

Benefits of Geothermal Heat Pump Systems

The biggest benefit of GHPs is that they use 25%–50% less electricity than conventional heating or cooling systems. This translates into a GHP using one unit of electricity to move three units of heat from the earth. According to the EPA, geothermal heat pumps can reduce energy consumption—and corresponding emissions—up to 44% compared to air-source heat pumps and up to 72% compared to electric resistance heating with standard air-conditioning equipment. GHPs also improve humidity control by maintaining about 50% relative indoor humidity, making GHPs very effective in humid areas.

Geothermal heat pump systems allow for design flexibility and can be installed in both new and retrofit situations. Because the hardware requires less space than that needed by conventional HVAC systems, the equipment rooms can be greatly scaled down in size, freeing space for productive use. GHP systems also provide excellent “zone” space conditioning, allowing different parts of your home to be heated or cooled to different temperatures.

Because GHP systems have relatively few moving parts, and because those parts are sheltered inside a building, they are durable and highly reliable. The underground piping often carries warranties of 25–50 years, and the heat pumps often last 20 years or more. Since they usually have no outdoor compressors, GHPs are not susceptible to vandalism. On the other hand, the components in the living space are easily accessible, which increases the convenience factor and helps ensure that the upkeep is done on a timely basis.

Because they have no outside condensing units like air conditioners, there’s no concern about noise outside the home. A two-speed GHP system is so quiet inside a house that users do not know it is operating: there are no tell-tale blasts of cold or hot air.

  • Selecting and Installing a Geothermal Heat Pump System
  • Heating and Cooling Efficiency of Geothermal Heat Pumps

The heating efficiency of ground-source and water-source heat pumps is indicated by their coefficient of performance ( COP ), which is the ratio of heat provided in Btu per Btu of energy input. Their cooling efficiency is indicated by the Energy Efficiency Ratio (EER), which is the ratio of the heat removed (in Btu per hour) to the electricity required (in watts) to run the unit. Look for the ENERGY STAR label, which indicates a heating COP of 2.8 or greater and an EER of 13 or greater.

Manufacturers of high-efficiency geothermal heat pumps voluntarily use the EPA ENERGY STAR label on qualifying equipment and related product literature. If you are purchasing a geothermal heat pump and uncertain whether it meets ENERGY STAR qualifications, ask for an efficiency rating of at least 2.8 COP or 13 EER.

Many geothermal heat pump systems carry the U.S. Department of Energy (DOE) and EPA ENERGY STAR label. ENERGY STAR -labeled equipment can now be financed with special ENERGY STAR loans from banks and other financial institutions. The goal of the loan program is to make ENERGY STAR equipment easier to purchase, so ENERGY STAR loans were created with attractive terms. Some loans have lower interest rates, longer repayment periods, or both. Ask your contractor about ENERGY STAR loans or call the ENERGY STAR toll-free hotline at 1-888- STAR -YES for a list of financing options.

Economics of Geothermal Heat Pumps

Geothermal heat pumps save money in operating and maintenance costs. While the initial purchase price of a residential GHP system is often higher than that of a comparable gas-fired furnace and central air-conditioning system, it is more efficient, thereby saving money every month. For further savings, GHPs equipped with a device called a “desuperheater” can heat the household water. In the summer cooling period, the heat that is taken from the house is used to heat the water for free. In the winter, water heating costs are reduced by about half.

On average, a geothermal heat pump system costs about $2,500 per ton of capacity, or roughly $7,500 for a 3-ton unit (a typical residential size). ). A system using horizontal ground loops will generally cost less than a system with vertical loops. In comparison, other systems would cost about $4,000 with air conditioning.

Although initially more expensive to install than conventional systems, properly sized and installed GHPs deliver more energy per unit consumed than conventional systems.

And since geothermal heat pumps are generally more efficient, they are less expensive to operate and maintain — typical annual energy savings range from 30% to 60%. Depending on factors such as climate, soil conditions, the system features you choose, and available financing and incentives, you may even recoup your initial investment in two to ten years through lower utility bills.

But when included in a mortgage, your GHP will have a positive cash flow from the beginning. For example, say that the extra $3,500 will add $30 per month to each mortgage payment. The energy cost savings will easily exceed that added mortgage amount over the course of each year.

On a retrofit, the GHP’s high efficiency typically means much lower utility bills, allowing the investment to be recouped in two to ten years. It may also be possible to include the purchase of a GHP system in an “energy-efficient mortgage” that would cover this and other energy-saving improvements to the home. Banks and mortgage companies can provide more information on these loans.

There may be a number of special financing options and incentives available to help offset the cost of adding a geothermal heat pump (GHP) to your home. These provisions are available from federal, state, and local governments; power providers; and banks or mortgage companies that offer energy-efficient mortgage loans for energy-saving home improvements. Be sure the system you’re interested in qualifies for available incentives before you make your final purchase.

To find out more about financing and incentives that are available to you, visit the Database of State Incentives for Renewable Energy (DSIRE) Web site. The site is frequently updated with the latest incentives. You should also check with your electric utility and ask if they offer any rebates, financing, or special electric rate programs.

Evaluating Your Site for a Geothermal Heat Pump

Because shallow ground temperatures are relatively constant throughout the United States , geothermal heat pumps (GHPs) can be effectively used almost anywhere. However, the specific geological, hydrological, and spatial characteristics of your land will help your local system supplier/installer determine the best type of ground loop for your site:

  • Geology
    • Factors such as the composition and properties of your soil and rock (which can affect heat transfer rates) require consideration when designing a ground loop. For example, soil with good heat transfer properties requires less piping to gather a certain amount of heat than soil with poor heat transfer properties. The amount of soil available contributes to system design as well — system suppliers in areas with extensive hard rock or soil too shallow to trench may install vertical ground loops instead of horizontal loops.
  • Hydrology
    • Ground or surface water availability also plays a part in deciding what type of ground loop to use. Depending on factors such as depth, volume, and water quality, bodies of surface water can be used as a source of water for an open-loop system, or as a repository for coils of piping in a closed-loop system. Ground water can also be used as a source for open-loop systems, provided the water quality is suitable and all ground water discharge regulations are met.
    • Before you purchase an open-loop system, you will want to be sure your system supplier/installer has fully investigated your site’s hydrology, so you can avoid potential problems such as aquifer depletion and groundwater contamination. Antifreeze fluids circulated through closed-loop systems generally pose little to no environmental hazard.
  • Land Availability
    • The amount and layout of your land, your landscaping, and the location of underground utilities or sprinkler systems also contribute to your system design. Horizontal ground loops (generally the most economical) are typically used for newly constructed buildings with sufficient land. Vertical installations or more compact horizontal “Slinky™” installations are often used for existing buildings because they minimize the disturbance to the landscape.
  • Installing Geothermal Heat Pumps
    • Because of the technical knowledge and equipment needed to properly install the piping, a GHP system installation is not a do-it-yourself project. To find a qualified installer, call your local utility company, the International Ground Source Heat Pump Association or the Geothermal Heat Pump Consortium for their listing of qualified installers in your area. Installers should be certified and experienced. Ask for references, especially for owners of systems that are several years old, and check them.

The ground heat exchanger in a GHP system is made up of a closed or open loop pipe system. Most common is the closed loop, in which high density polyethylene pipe is buried horizontally at 4-6 feet deep or vertically at 100 to 400 feet deep. These pipes are filled with an environmentally friendly antifreeze/water solution that acts as a heat exchanger. In the winter, the fluid in the pipes extracts heat from the earth and carries it into the building. In the summer, the system reverses and takes heat from the building and deposits it to the cooler ground.

The air delivery ductwork distributes the heated or cooled air through the house’s duct work, just like conventional systems. The box that contains the indoor coil and fan is sometimes called the air handler because it moves house air through the heat pump for heating or cooling. The air handler contains a large blower and a filter just like conventional air conditioners.

Most geothermal heat pumps are automatically covered under your homeowner’s insurance policy. Contact your insurance provider to find out what its policy is. Even if your provider will cover your system, it is best to inform them in writing that you own a new system.


  • Resistance Heat
    • Conventional electric resistance heating systems use resistance coils, which grow hot when electric current is applied to them, to generate heat. The system’s blower distributes this heat throughout the house. Electric resistance heat has a COP equal to one (1.0).
  • Air-to-Air Heat Pumps
    • Air-to-air heat pumps use an arrangement of compressors, condensers, expansion valves, and other components to extract heat from outside air in winter. They also provide cooling in the summer by reversing the process and dumping heat from inside your home to the outside. On the average, heat pumps cost 40 to 65 percent less to operate for heat than electric resistance units.

At lower temperatures, typically below 30 degrees, air-to-air heat pumps can no longer extract sufficient heat from outside air to heat a house. When this happens, a separate electric resistance heater comes on to provide back-up heating. Fortunately, the time during which the resistance heater must operate in winter is relatively limited because of Louisiana’s usually mild weather.

Heat pumps are rated in terms of Seasonal Energy Efficiency Ratio (SEER) for summer performance and Coefficient of Performance (COP) for winter performance. Select a unit with a SEER greater than 10, and a COP over 2.9 for the high temperature (47 degrees) and a COP greater than 2.0 for the low temperature (17 degrees). These high and low temperatures are important in the design of the equipment and provide information about its operating efficiency. For comparison, note that electric resistance heating equipment has a COP equal to 1 .0.

  • Advantages of air-to-air heat pumps
  • Heat pumps provide both heating and air conditioning.
  • Heat pumps are most advantageous when electricity is the only power source available.
  • Heat pumps can supply hot water with the excess heat they generate.
  • Disadvantages of air-to-air heat pumps

In the winter, the performance of air-to-air heat pumps decreases as the temperature declines. They require backup systems of heating to operate when the outside temperature is too cold. This varies according to model and manufacturer, but is between 15 and 30 degrees. The back-up systems may be electric resistance heat or a dual fuel heat pump which uses gas for the back-up system.
Do not use a setback thermostat with a heat pump; it can cause the resistance heaters to operate when they are not needed, thereby increasing utility bills.


An earth-coupled heat pump takes advantage of the more constant earth temperatures to operate. Transferring of heat from the ground is accomplished by placing a closed loop of pipe under the ground. The pipe is then filled with water, brine or antifreeze. During the heating season, the thermal energy of the ground warms the liquid in the pipe, and this warm liquid is pumped to the house where it is used by the heating system. In the cooling season, heat from the house is transferred to the liquid in the pipe, and pumped through the pipe back to the ground where it loses heat.

The most common way of using the energy extracted from the earth is to couple the coils with a water-to-air heat pump. Heat pumps increase the benefits of using the earth as a source of energy, can be used in many different situations, and can provide both heating and cooling.

When heat pumps are coupled with earth loop systems, they are used to extract heat from the water (or brine or antifreeze) that is circulated through the systems. These heat pumps are called water-source heat pumps because they draw heat from the water or other liquid circulating through the coils or pipes. If the heat pumps use a forced air system to heat the home, they are called water-to-air heat pumps. Water-to-air heat pumps are the most common type of residential water-source heat pumps.

In Louisiana, the temperature of the earth at a depth of twelve feet averages 67 degrees in the south, and about 65 degrees in the northern part of the state. This ground temperature is much more stable than air temperature where extreme highs or lows increase the cost of operating the equipment. While the efficiency of an earthcoupled heat pump depends on the temperature of the earth, a COP range of 3 to 4 is normal. The higher the COP, the higher the efficiency.

One of the disadvantages of earth-coupled heat pumps is the relatively high initial cost. The retail cost of a residential water-source heat pump can be as high as $3000. Wells or earth coils also add to the cost, often as much as the cost of the heat pump itself. If a heat pump replaces a heating system that uses forced air in an existing house, duct systems may need to be changed, adding more to the cost of the system.

Most heat pumps available now are well made and reliable, but because they are more complex and have more moving parts than furnaces, conscientious maintenance is important to keep them operating at their peak.

The combination of high initial cost and varying operating costs, requires a full and careful analysis of long-term economics before purchasing a heat pump system.


  • Energy savings of 30 to 50 percent over typical air-cooled heat pumps.
  • Eliminates all outdoor air conditioning units as well as cooling towers or boilers. Corrosion, dirt, vandalism, theft, and high maintenance are eliminated.
  • No additional outdoor space is required. Earth bores can be put under lawns, landscape zones, driveways and parking lots.
  • “Free” hot water can be produced during the summer months.
  • Elimination of backup electric resistance heat that is required with air-to-air heat pump.


  • Initial installation cost is up to 2.5 times as expensive as other types of equipment due to the cost of installing wells.
  • Not all air conditioning contractors are familiar with this technology.
  • Payback period increases as the energy efficiency of the home goes up.


When selecting new air conditioning equipment, remember that an air conditioner has two functions. In addition to cooling the indoor air, it also removes excess humidity. In Louisiana’s climate, the removal of humidity is at least as important as cooling the air. If a unit is not sized properly, it will not perform both of these functions satisfactorily. A unit that is oversized for the building it services cools the air quickly, but does not run long enough to remove excess humidity. This means that to provide comfort, the thermostat must be turned lower, thus using more energy. Moreover, the unit cycles on and off frequently. This uses more electricity than running continuously for longer periods.

Manufacturers are now making air conditioning equipment that is far more efficient than standard equipment of a few years ago. Efficiency for central units is rated according to the Seasonal Energy Efficiency Rating. This indicates how well the system performs over an entire cooling season. The higher the rating, the more efficient the equipment.

Determining the most advantageous rating to purchase depends on the balance between the cost of the new equipment and the money saved over the life of the system. A few years ago a rating of 8 was considered efficient. Today, central units with a rating of 15 are available. Generally, money spent on the initial cost of efficient equipment pays for itself quickly. To determine if the cost will be worth it to you, use this formula to compare the cost of operating equipment with different SEER ratings.

The newest development in efficient air conditioning equipment is the use of variable speed fans. By circulating the air at 900 cfm for a longer period of time, greater dehumidification, and thus greater comfort, can be achieved.
















*Alexandria = 1350 Baton Rouge = 1500 New 0rleans = 1550 Shreveport = 1200


The best way to evaluate the cost effectiveness of a heating and cooling system is to calculate a life cycle cost analysis. This method of analysis uses three main cost factors: the initial cost of buying and installing the equipment, the cost of energy over the lifetime of the equipment, and the cost of maintaining the equipment. A thorough life cycle cost analysis should also consider three economic factors that can have a dramatic effect on life cycle costs: the interest rate, the fuel cost escalation rate, and the general inflation rate. For example, more expensive equipment may have to be paid for with borrowed money, and higher interest rates mean that the equipment will cost more because money is more expensive. On the other hand, the higher the escalation rate for fuel costs, the more money an efficient system will save.

Unfortunately, interest rates, inflation and fuel costs over 20 or 30 years are impossible to predict, and the formulas for considering these variables are complex. The cost analysis method that follows is a relatively simple way to find out how the costs of different heating and cooling systems compare using three basic cost elements: equipment costs, energy costs, and maintenance costs. It does not consider the economic variables, and the numbers used in the examples are very generalized. Despite the limitations, the cost information presented provides a basic yet useful way to compare costs of different heating and cooling systems.


A long-term energy price rise may be inevitable, but the rise may not be as dramatic as in the past. It also is difficult to say how the price of one energy source will compare with another. Consequently, current energy prices and trends may be used to give some indication of the relative costs of different energy sources in the future.

Energy prices also vary by location. Utility companies (or your utility bill) can provide the current prices for your energy sources.

  • Natural Gas*
    • $4.00 per thousand cubic feet.
  • Electricity*
    • $0.08 per kilowatt-hour (kWh)

*Utility rates reflect actual costs of base rates plus fuel adjustment charges paid by customers of Louisiana utilities in January, 1987.


To compare the cost effectiveness of various heating and cooling systems, it is necessary to convert the costs of different energy sources to a common base. The cost per million British thermal units (MBtu’s) is commonly used.

To find the cost per MBtu’s multiply the unit costs by the multipliers used in this example.

  • Natural Gas
    • $4.00 per mscf x .97 = $3.88 per MBtu’s
  • Electricity
    • $0.08 per kWh 293 = $23.44 per MBtu’s


To find out how different options translate into savings, and how the savings between systems compare with each other, the efficiencies of all systems being considered must be known. Find out the efficiency ratings of each piece of equipment that you are considering. If a heat pump is one of the options, be sure to get both the COP and SEER ratings. If electric central air conditioning may be used in conjunction with a gas-burning furnace, the efficiencies of both units must be considered.


Now that the cost of energy and the efficiencies of the heating and cooling systems are known, the cost per MBtu’s can be calculated. Divide the cost per MBtu’s of energy that goes into the heating system by the efficiency rating for the system to get the cost per MBtu’s of heat delivered.


  • Natural Gas Furnace
  • $3.88

    per MBtu’s imput =


    per MBtu’s delivered



  • Electric Resistance Heat
  • $23.44

    per MBtu’s imput=


    per MBtu’s delivered



  • Conventional air conditioning (SEER 6.82)
  • Rate

    X 1000 =


    X 1000 =


    per MBtu’s delivered



  • Air-to-air heat pump (heating, COP 3)
  • $23.44

    per MBtu’s imput =


    per MBtu’s delivered



  • Air-to-air heat pump (cooling, SEER 8.53)
  • Rate

    X 1000 =


    X 1000 =


    per MBtu’s delivered



  • Earth-coupled heat pump (heating, COP 4)
  • $23.44

    per MBtu’s imput =


    per MBtu’s delivered



  • Earth-coupled heat pump (cooling, SEER 10.24)
  • Rate

    X 1000 =


    X 1000 =


    per MBtu’s delivered



Be sure to compute this step with actual ratings of equipment under consideration, since these ratings can vary widely. For a gas furnace, .67 has been chosen as representative of the COP of equipment installed prior to 1980. For electric air conditioning, the SEER 6.82 has been chosen as representative of equipment installed prior to 1980.


An analysis of conservation and weatherization opportunities is the necessary first step in deciding on the size and characteristics of the heating and cooling equipment that will be needed. This step in the cost analysis assumes that existing homes have been suitably weatherized and that new homes have been planned with conservation in mind.

For new construction, a thermal load analysis should be an integral part of planning for the heating and cooling system. For an existing weatherized home, a careful energy audit and thermal load analysis will provide information on the amount of heating that will be required. Utility records for existing homes normally do not differentiate between heating and cooling energy demand and other energy uses, such as lighting and appliances. For the average Louisiana home, about 60 percent of the total energy consumption is for cooling and heating. The energy consumption for heating and cooling in well insulated, tight houses can be reduced by as much as one-half. Because energy consumption patterns can vary so much, annual heating and cooling demand should be based on a thermal load analysis, rather than simply summing up a year’s utility bills and eliminating 40 percent for uses other than heating and cooling.


To find the annual heating and cooling cost, simply multiply the cost per MBtu by the annual heating and cooling energy requirement. In the following examples, it is assumed that 30 MBt l’s would be required to heat the house for a year and 70 MBtu’s would be needed for cooling. The heat pumps would be used for both heating and cooling, requiring 100 MBtu’s per year.

For Example:

  • Natural Gas Furnace (AFUE .67)
    • $5.79 per MBtu per year = $174 per year
  • Electric Resistance Heat (COP 1.0)
    • $23.44 per MBtu x 30 MBtu’s per year = $703 per year
  • Electric Central Air Conditioning (SEER 6.82)
    • $11.72 per MBtu x 70 MBtu’s per year = $820 per year
  • Air-to-air Heat Pump (COP 3, SEER 8.53)
  • $7.81

    per MBtu x 30 MBtu’s per year =


    per year


    per MBtu x 70 MBtu’s per year =


    per year


    Total per year

  • Water-to-air Heat Pump (COP 4, SEER 10.24)
  • $5.86

    per MBtu x 30 MBtu’s per year =


    per year


    per MBtu x 70 MBtu’s per year =


    per year


    Total per year


Most heating and cooling units should have useful lives of 20 to 30 years. Consequently, their costs and potential savings should be figured over that period. This lifetime energy cost, which in this case does not consider fuel cost escalation, is calculated by multiplying the annual cost of energy by the chosen lifetime.

For example:

  • Natural Gas
    • $174 per year x 20 years = $3,840
  • Electric Resistance
    • $703 per year x 20 years = $14,060
  • Electric Central Air Conditioning
    • $820 per year x 20 years = $16,400
  • Air-to-air Heat Pump
    • $890 per year x 20 years = $17,800
  • Earth-coupled Heat Pump
    • $717 per year x 20 years = $14,340


When the heating and cooling costs have been computed, consider the heating and cooling equipment costs. The easiest way to determine new equipment costs is to get estimates from dealers. Some of the variables associated with heating and cooling equipment costs are hard to estimate without knowing the details of the installation.

One of these variables is ductwork. For new construction, any forced air system will require a new duct system, and the costs will be about equal for furnaces or heat pumps. For heat pumps installed in existing homes, duct modification costs can range from nothing to nearly $1,000.

Prices vary widely in different parts of the country, but here are some rough estimates of retail equipment costs (not including installation) to indicate the relationship between systems of comparable size (approximately 30,000 Btuh to 40,000 Btuh).


Gas Furnace with flue damper,

electronic ignition, and setback thermostat (AFUE .67)




Efficiency Natural Gas

Combustion Furnace (AFUE .9)




Resistance Heat




Central Air Conditioning




Heat Pump




Heat Pump




Emergency maintenance costs are nearly impossible to predict, but dealers may be willing to give estimates of general, annual maintenance costs. However, even these estimates are likely to vary.

Heat pumps and air conditioners have one maintenance item that sets them apart from other systems. While actual performance varies considerably with specific circumstances, the compressors on heating and cooling heat pumps may have to replaced after 12 to 15 years. (The U.S. Department of Energy Technology and Consumer Products Branch indicates that the average compressor life is 5 to 7 years.) Compressor reliability is increasing all the time, and there is less stress on water-to-air heat pump compressors than for air-to-air heat pump compressors, but as of today, one compressor replacement would be expected for a 20-year life-span. Here are some maintenance cost estimates for the sake of comparison.

  • Natural Gas
    • $50 per year, $1,000 for 20 years
  • Electric Resistance Heat
    • $50 per year, $1,000 for 20 years
  • Central Air Conditioning
  • $50

    per year,


    for 20 years



    one compressor*




    20 years

  • Heat Pumps
  • $75

    per year,


    for 20 years



    one compressor*




    20 years

*Cost of compressor replacement represents 1987 estimate


A basic lifetime cost of a heating and cooling system can be determined by adding up the lifetime energy costs, the initial cost of equipment, and the cost of maintenance. Remember, this does not consider changes in fuel costs, inflation, and interest rates over the next 20 years.

For Example:

  • Natural gas furnace (AFUE .1 with electric central air conditioning (SEER 6.82)
    • $ 750 gas furnace
    • 1,350 air conditioning
    • 1,000 duct work
    • $3,100 equipment subtotal
    • $ 3,480 cost of gas
    • 16,400 cost of electricity
    • $19,880 energy subtotal
    • $2,000 maintenance cost
    • $1,000 1 compressor
    • $3,000 parts and maintenance
    • $25,980 Total cost for 20 years
  • Earth-coupled heat pump (COP 4)
    • $ 1,300 heat pump
    • 1,500 coil or well
    • 1,000 duct work
    • $ 3,800 equipment subtotal
    • $14,340 electricity
    • $ 1,500 maintenance
    • $ 1,000 1 compressor
    • $ 2,500 parts and maintenance
    • $20,640 Total cost for 20 years


In the final example, an earth-coupled heat pump would cost $5,340 less to own for 20 years than a gas furnace and electric central air conditioning. This example assumes you are considering replacement of original equipment on a house built prior to 1980 with an earth-coupled heat pump. A quick review of the cost analysis step reveals that electric resistance heat would be the least expensive to buy initially and is virtually maintenance free, but the electricity costs for 20 years are $14,060, about the same as would be spent for electricity for both heating and cooling if an earth-coupled heat pump had been installed.

The real lesson of this analysis should be that every situation is unique and must be carefully analyzed. Any one of the factors considered in this analysis, and the economic variables that are not, (interest rates, fuel escalation rate, and general inflation rate), may change the outcome. For example, look at the results if natural gas prices were increased to $8.00 per mcf and electric rates were $.10 per kWh. Or consider the advantage to be gained with an earth-coupled heat pump if the annual cooling load is twice the annual heating load. Even when a cost analysis is done as completely as possible, there will be room for considerable speculation about what the effects of general economic trends will be. But remember, any cost analysis will be more meaningful when it is based on the most specific information available at the time.

How Does an Absorption Chiller Work?

What is an Absorption Chiller?

Absorption chillers use heat instead of mechanical energy to provide cooling. A thermal compressor consists of an absorber, a generator, a pump, and a throttling device, and replaces the mechanical vapor compressor.

In the chiller, refrigerant vapor from the evaporator is absorbed by a solution mixture in the absorber. This solution is then pumped to the generator. There the refrigerant re-vaporizes using a waste steam heat source. The refrigerant-depleted solution then returns to the absorber via a throttling device. The two most common refrigerant/ absorbent mixtures used in absorption chillers are water/lithium bromide and ammonia/water.

Compared with mechanical chillers, absorption chillers have a low coefficient of performance (COP = chiller load/heat input). However, absorption chillers can substantially reduce operating costs because they are powered by low-grade waste heat. Vapor compression chillers, by contrast, must be motor- or engine-driven.

Low-pressure, steam-driven absorption chillers are available in capacities ranging from 100 to 1,500 tons. Absorption chillers come in two commercially available designs: single-effect and double-effect. Single-effect machines provide a thermal COP of 0.7 and require about 18 pounds of 15-pound-per-square-inch-gauge (psig) steam per ton-hour of cooling. Double-effect machines are about 40% more efficient, but require a higher grade of thermal input, using about 10 pounds of 100- to 150-psig steam per ton-hour.

A single-effect absorption machine means all condensing heat cools and condenses in the condenser. From there it is released to the cooling water. A double-effect machine adopts a higher heat efficiency of condensation and divides the generator into a high-temperature and a low-temperature generator.

Is It Right for You?

Absorption cooling may be worth considering if your site requires cooling, and if at least one of the following applies:

  • You have a combined heat and power CHP) unit and cannot use all of the available heat, or if you are considering a new CHP plant
  • Waste heat is available
  • A low-cost source of fuels is available
  • Your boiler efficiency is low due to a poor load factor
  • Your site has an electrical load limit that will be expensive to upgrade
  • Your site needs more cooling, but has an electrical load limitation that is expensive to overcome, and you have an adequate supply of heat.

In short, absorption cooling may fit when a source of free or low-cost heat is available, or if objections exist to using conventional refrigeration. Essentially, the low-cost heat source displaces higher-cost electricity in a conventional chiller.

In Practice

In a plant where low-pressure steam is currently being vented to the atmosphere, a mechanical chiller with a COP of 4.0 is used 4,000 hours a year to produce an average 300 tons of refrigeration. The plant’s cost of electricity is $0.05 a kilowatt-hour.

An absorption unit requiring 5,400 lbs/hr of 15-psig steam could replace the mechanical chiller, providing annual electrical cost savings of:

Annual Savings = 300 tons x (12,000 Btu/ton / 4.0) x 4,000 hrs/yr x $0.05/kWh x kWh/3,413 Btu = $52,740

Actions You Can Take

Determine the cost-effectiveness of displacing a portion of your cooling load with a waste steam absorption chiller by taking the following steps:

  • Conduct a plant survey to identify sources and availability of waste steam
  • Determine cooling load requirements and the cost of meeting those requirements with existing mechanical chillers or new installations
  • Obtain installed cost quotes for a waste steam absorption chiller
  • Conduct a life cycle cost analysis to determine if the waste steam absorption chiller meets your company’s cost-effectiveness criteria.
  • Absorption Chiller Refrigeration Cycle

The basic cooling cycle is the same for the absorption and electric chillers. Both systems use a low-temperature liquid refrigerant that absorbs heat from the water to be cooled and converts to a vapor phase (in the evaporator section). The refrigerant vapors are then compressed to a higher pressure (by a compressor or a generator), converted back into a liquid by rejecting heat to the external surroundings (in the condenser section), and then expanded to a low- pressure mixture of liquid and vapor (in the expander section) that goes back to the evaporator section and the cycle is repeated.

The basic difference between the electric chillers and absorption chillers is that an electric chiller uses an electric motor for operating a compressor used for raising the pressure of refrigerant vapors and an absorption chiller uses heat for compressing refrigerant vapors to a high-pressure. The rejected heat from the power-generation equipment (e.g. turbines, micro turbines, and engines) may be used with an absorption chiller to provide the cooling in a CHP system.

The basic absorption cycle employs two fluids, the absorbate or refrigerant, and the absorbent. The most commonly fluids are water as the refrigerant and lithium bromide as the absorbent. These fluids are separated and recombined in the absorption cycle. In the absorption cycle the low-pressure refrigerant vapor is absorbed into the absorbent releasing a large amount of heat. The liquid refrigerant/absorbent solution is pumped to a high-operating pressure generator using significantly less electricity than that for compressing the refrigerant for an electric chiller. Heat is added at the high-pressure generator from a gas burner, steam, hot water or hot gases. The added heat causes the refrigerant to desorbs from the absorbent and vaporize. The vapors flow to a condenser, where heat is rejected and condense to a high-pressure liquid. The liquid is then throttled though an expansion valve to the lower pressure in the evaporator where it evaporates by absorbing heat and provides useful cooling. The remaining liquid absorbent, in the generator passes through a valve, where its pressure is reduced, and then is recombined with the low-pressure refrigerant vapors returning from the evaporator so the cycle can be repeated.

Absorption chillers are used to generate cold water (44°F) that is circulated to air handlers in the distribution system for air conditioning.

“Indirect-fired” absorption chillers use steam, hot water or hot gases steam from a boiler, turbine or engine generator, or fuel cell as their primary power input. Theses chillers can be well suited for integration into a CHP system for buildings by utilizing the rejected heat from the electric generation process, thereby providing high operating efficiencies through use of otherwise wasted energy.

“Direct-fired” systems contain natural gas burners; rejected heat from these chillers can be used to regenerate desiccant dehumidifiers or provide hot water.

Commercially absorption chillers can be single-effect or multiple-effect. The above schematic refers to a single-effect absorption chiller.

Multiple-effect absorption chillers are more efficient and discussed below.

Multiple-Effect Absorption Chillers

In a single-effect absorption chiller, the heat released during the chemical process of absorbing refrigerant vapor into the liquid stream, rich in absorbent, is rejected to the environment. In a multiple-effect absorption chiller, some of this energy is used as the driving force to generate more refrigerant vapor. The more vapor generated per unit of heat or fuel input, the greater the cooling capacity and the higher the overall operating efficiency.

A double-effect chiller uses two generators paired with a single condenser, absorber, and evaporator. It requires a higher temperature heat input to operate and therefore they are limited in the type of electrical generation equipment they can be paired with when used in a CHP System.

Triple-effect chillers can achieve even higher efficiencies than the double-effect chillers. These chillers require still higher elevated operating temperatures that can limit choices in materials and refrigerant/absorbent pairs. Triple-effect chillers are under development by manufacturers working in cooperation with the U.S. Department of Energy.

How Does an Engine Driven Chiller Work?

Packaged natural gas engine-driven water chillers and direct expansion (DX) units are now available. Commercially proven custom and packaged engine-driven refrigeration units offer excellent reliability and economic advantages for ice rinks, refrigerated warehouses and other applications. The industry is also focusing on developing small, engine-driven heating and cooling systems suitable for small commercial applications.

Operation: Engine-driven cooling systems employ a conventional vapor compression cycle. Their main components are the compressor, condenser, expansion valve and evaporator.

Advantages: The main difference between a natural gas and conventional electric system is the replacement of the electric motor with a gas engine. This change results in variable-speed operation capability; higher part-load efficiency; efficient high-temperature waste-heat recovery for water heating, process heating, or steam generation; and an overall reduction in operating expenses.

  • Requires no more room than conventional electric chillers
  • Lowest operating cost of any available chiller
  • Depending on electric rates and natural gas rates, an engine driven chiller may operate at up to 1/2 of the cost of direct-fired absorption chillers
  • Like absorption chillers, engine driven chillers reduce on-peak electric demand charges.
  • Depending on your electric and/or natural gas supplier, there may be rebates available for purchasing a new absorption chiller or engine driven chiller from your utility supplier.
  • Environmentally friendly.
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