This post provides the inside scoop and background data behind Renewable Juneau’s recent New Year’s Resolution post. RJ’s post offers purchasing advice for those striving for a carbon footprint shrinking resolution – purchase a heat pump or an electric car?
The conclusion to that first world consumer conundrum announced in RJ’s post? Installing an air source heat pump in your oil-heated home can have a greater effect on shrinking your carbon footprint then buying that sexy new electric car! Investing in the heat pump will eliminate nearly double the amount of CO2 emissions as an EV, and it will save you money every year as well! If your New Year’s resolution is to reduce your CO2 emissions, it’s no contest – install a heat pump.
Here we offer you the deeper dive into the numbers. Let’s take a look at a couple scenarios that compare the impacts of buying an electric vehicle versus the results from installing a heat pump.
If your house is like most fuel-oil heated houses in Juneau, odds are good that you burn more heating oil in a year than gallons of gas in your car. That means you probably spend more money on heating oil, and produce more CO2 from heating oil, than gasoline. Even if you heat your house with something else, like electric baseboard or wood pellets or propane, you’re probably spending more money to heat your house than to fuel your car. So let’s explore that.
Before we get into the analyzing the numbers, we need to make a few caveats. With cars, we’re only going to be looking at fuel costs (gasoline or electricity). There are some other very significant annual costs that we’ll ignore, such as insurance, maintenance, and probably the biggest one – depreciation. Those costs will usually amount to thousands of dollars per year. If you buy a new car, after ten years its resale value is probably less than half of its original purchase price. A heat pump, on the other hand, typically has little or no maintenance costs through its service life, and unless you purchase an extended warranty, it’s probably covered your house insurance. While you can usually sell your car for something after ten years, we assume that once your heat pump is installed, it has no resale value. We also are ignoring inflation factors, and we’re using today’s energy prices.
Scenario 1: The modest budget scenario.
A typical small house we often see in Juneau is around 1,200 square feet. It heats with electric baseboard and has a Toyo or Monitor oil stove installed in the main living area. Its annual heating expenses are a combination of oil and electricity, with oil representing the bulk of the expense. A common and cost-effective heat pump solution for this house is to replace the Toyo stove with a single-head heat pump located in the main room, and use the electric baseboards to provide supplemental heat for the peripheral rooms.
We’re going to assume that the owner of this house might sell their older small, fuel-efficient car and buy a bargain EV like a used Nissan Leaf. We’re also going to assume that their current car still has years of life left in it if they choose to hang on to it. We’re also assuming that they don’t drive a lot of annual miles.
So which is the better investment – the EV or the heat pump? First, let’s look at their current status.
| Existing car | Toyo/Electric baseboard | |
|---|---|---|
| Miles driven per year | 6,000 | NA |
| MPG | 30 | NA |
| Gallons fuel per year | 200 | 340 |
| Annual energy cost | $710 | $1,253 |
| Annual CO2 emissions (lbs) | 4,000 | 7,559 |
Now let’s look at two hypothetical options: the EV; or the heat pump.
| EV | Heat pump | |
|---|---|---|
| Purchase cost | $11,000 | $5,900 |
| Resale value of existing car | $5,000 | NA |
| Net cost | $6,000 | $5,900 |
| New annual energy cost | $229 | $705 |
| Annual savings | $481 | $548 |
| Annual CO2 reduction (lbs) | 4,000 | 7,559 |
| 10-year investment CO2 return (how many lbs of CO2 reduced over ten years per purchase dollar) | 6.7 lbs/$ | 12.8 lbs/$ |
Basically, investing in a heat pump will eliminate nearly double the amount of CO2 emissions, and it will save you money every year as well! If your New Year’s resolution is to reduce your CO2 emissions, there’s no contest – install a heat pump.
Scenario 2: The large budget scenario.
A typical larger house we often see in Juneau is around 3,200 square feet, and heats with an oil boiler delivering heat throughout the house with hydronic baseboards. Its annual heating expenses consist entirely of heating oil.
This owner is considering converting the entire house to heat pumps and eliminating the oil boiler completely. Perhaps the boiler is at the end of its service life, or the owner wants to eliminate all CO2 emissions. This will be a considerably more expensive heat pump than the one in Scenario 1.
We’re going to assume that the owner of this house might sell their large SUV and buy a shiny new $55,000 Tesla Model S. They drive a lot by Juneau standards – 10,000 miles.
So which is the better investment – the EV or the heat pump? First, let’s look at their current status.
| Existing car | Toyo/Electric baseboard | |
|---|---|---|
| Miles driven per year | 10,000 | NA |
| MPG | 20 | NA |
| Gallons fuel per year | 500 | 1,710 |
| Annual energy cost | $1,775 | $5,455 |
| Annual CO2 emissions (lbs) | 10,000 | 38,271 |
Now let’s look at the two options: the Tesla; or the heat pump.
| EV | Heat pump | |
|---|---|---|
| Purchase cost | $55,000 | $24,000 |
| Resale value of existing car | $20,000 | NA |
| Net cost | $35,000 | $24,000 |
| New annual energy cost | $1,775 | $2,717 |
| Annual savings | $1,357 | $2,739 |
| Annual CO2 reduction (lbs) | 10,000 | 38,271 |
| 10-year investment CO2 return (how many lbs of CO2 reduced over ten years per purchase dollar) | 2.9 | 15.9 |
Again, it’s no contest. The heat pump wins by a mile. Not only does it cost you a lot less to buy, but you also save twice as much money per year and eliminate nearly four times as many pounds of CO2 emissions. Every dollar you spend on a heat pump reduces over five times as much CO2 as the EV does over ten years. The heat pump installation is by far a better investment! But of course, that heat pump isn’t nearly as shiny and exciting as that fancy new Tesla, and your friends won’t be as impressed by it.
Your house likely falls somewhere between these two scenarios. Alaska Heat Smart can help you perform this type of analysis of your home and car options to help you make informed decisions. Simply apply for a free heat pump assessment here.
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