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Are EER Based Rebates Worth It?

Utilities often offer rebates to customers who buy high EER or “Energy Star” geothermal heat pumps.  One assumption is that higher EER units are more energy efficient.  Another assumption is if it is a government approved “Energy Star” unit, then it will have lower energy use, be more efficient and have lower operating costs than non “Energy Star” units.  But are these assumptions really true in heating dominated areas?

To answer that question, let’s look at a fairly typical Minnesota home with a 54,000Btu/hr heat loss and 36,000 Btu/hr AC load. Estimated annual energy costs are as follows:

* Utilizes ColdClimate technology that provides superior dehumidification eliminating over sizing concerns.

The analysis shows that selecting the highest EER has the highest annual operating costs and the lowest EER has the lowest annual cost.  What happened?

In order for manufacturers to get high EER, heating capacity is sacrificed.  If you look at the heating and cooling capacities listed above you’ll see a large heating-cooling spread on most units.  To properly size units to the home, high EER units must be sized to cooling loads.  But when sized for cooling loads, high EER units cannot meet the heating requirement and electric resistance heating is added to make up the difference. It is electric resistance heating that ends up costing the homeowner year after year.  This holds true for all applications where heating degree-days are greater than cooling degree-days and that covers all of Minnesota and a good portion of North America.

If high EER units are sized to heating load, high EER coils and their high cooling capacity will not effectively dehumidify the home.  This results in a cool damp home and may contribute to mold and mildew problems.  ECONAR’s unique ColdClimate air coil technology solves this dilemma by providing effective dehumidification at higher cooling capacity and allowing sizing the unit to heating load.  Only ECONAR units can be applied where heating and cooling output can be of similar capacity and still properly cool and dehumidify the building.

The table‘s bottom rows look at the cost impact and how long it takes for higher annual heating costs to eat up rebate savings.  In worst case, it takes a little under six years before the rebated system (assuming an $800 rebate) ends up costing the consumer more than a non-rebated system, and this is on the highest EER system.  Over a 30-year mortgage, the homeowner with the highest EER system will pay as much as $4,140 in utility costs more than non-rebated systems not including future electric cost increases.

So what does this all mean to you the homeowner? 

Total annual energy need/use is the driving factor and energy use is directly related to annual heating and cooling costs.  Since most of us live in heating dominated markets, getting the best heating performance is paramount.  For lowest annual energy use/cost, follow these guidelines:

·         Size units to the building’s heating load. 
- Do not undersize  and add electric resistance heating elements to meet the building’s load.

·         Be aware of annual energy use and how EER distorts the picture.  Selecting units based on EER rebates is a case of “stepping over dollars to pick up dimes.” 

·         Use ECONAR GeoSource heat pumps to meet your needs:

·         ECONAR’s ColdClimate technology provides better heating capability in cold region applications

·         ECONAR’s ColdClimate air-coil provides proper dehumidification during cooling modes eliminating oversized cooling capacity concerns.

·         If the unit qualifies for a rebate, go for it.  If not, be assured that you are still providing a system with the lowest annual energy usage and costs that easily exceeds the rebate’s value.

If you are a utility or non-ECONAR dealer, push those rebates.