Customers are confused when it comes to gas conversions...

heatpro02920

I went to a sales call first thing this morning. The customer has a 3 year old oil fired boiler with baseboard heat, nice boiler and installed level, flush, and clean {rarity around here sometimes}. They are not having any issues with the boiler, I guess their heatloss is probably around 70K and the boiler is 100K in, so they are sized good. Its a Slant fin cast iron oil fired boiler with a tankless and I have no reason to believe it wont last another 20 years {easily}. But they just bought the house and are worried about the oil bills...



I tried to explain to them, a gas conversion is not going to save them any money after you factor in how long this boiler has left, and they still wan't a new boiler...



So I do their heatloss it comes in around 81K BTU's, I tell them the price for a rinnai condensing tankless and a TT solo 110.... They signed the proposal and gave me the deposit, and when I asked if they wanted to just move the oil boiler to the side incase they every wanted to switch back or sell it instead of paying me $350 to remove it, and they said NOPE please take it out of here...



I just don't get it, its a waste I'm actually waiting for the manager of my supply house to get back from lunch rite now so I can pick up the unit and deliver it today {manager gives me a better price that counter guys}....



I'm not trying to complain I appreciate the work, but I feel bad for these people that think throwing away a brand new boiler to switch fuels is a good idea...

R Mannino

But

I really want to buy a Chevy and your telling me to keep my Ford. I really want that Chevy!



If you don't sell me that Chevy someone else will..............at least your selling.

heatpro02920

I agree...

When it comes down to it, I do what the customer pays for, I have installed brands I don't like and even ripped out a beautiful radiant panel system {the first Buderus panels, I kept them and used them in my office building} and replaced them with duct work {NO AC!!!} against my recommendations...

TonyS

No confusion here

Gas here is 55 cents a therm, oil about 3.50. Now your going to replace an antiquated on off oil boiler with a modern modulating boiler with outdoor reset. Throw in a couple of tax incentives. Throw on top of that the fact that with gas in the house they can get rid of the electric water heater and use gas bringing the electric bill down 50 bucks a month... its just a no brainer. And from an economical standpoint, the banks giving some ridiculously low interest rate on your money and inflation going through the roof now and worse in the near future, the fact is if you have the money for a modern gas boiler and you dont buy one you simply cant add or dont see whats going on around you. The last 3 oil boilers I removed were less than 2 years old. 2 went to the scrapyard and one I sold to a guy making his own ethanol.

And if I recall.. they haven't even started fracking in NY.

chapchap70

55 cents per therm? No charge for delivery?

The payback time for switching boilers here is probably infinite.  It is my understanding that maintenance costs are higher and the equipment doesn't last quite as long for mod/cons.  Switching to gas while keeping the 3 year old boiler and switching burners is another issue though the cost for natural gas is a bit more than 55 cents per therm when delivery charges are figured in.



With the tiered pricing and delivery charges, the equivalent price per gallon is probably about $1.80 in NY



The customer did not want the cheaper option of switching out the burners?  The payback time would have been waaaay shorter this way.

BobC

It pays but it's not quick

In the Boston area natural gas costs about $1.40 per therm which is equivalent to oil at $1.96 a gallon. Area oil prices are $3.42 and up so there are good savings to be had.



I replaced a 16 year old v75 with a gas fired Smith G8-3 last year when the oil tank started to weep and that looks like it is about 20% more efficient than the oversized oil fires v75. Even with the cost differential between oil and gas it is going to take a long time to see payback for this. 2010-11 was very similar in terms of degree days and I burned 363 gallons of oil that season, this year I will burn the equivalent of 300 gallons of oil but will pay $681 less than oil would have cost.



So if the cost ratio between oil and gas stays the same it will take almost 11 years to pay for the new equipment. I don't believe the cost differential will stay as it now is but I do believe gas will stay lower than oil long term.  I would not have replaced a 3 year old system but I probably would have tried to convert a new boiler like that boiler to gas.



Bob

heatpro02920

Lets not forget

Natural gas is going to double to triple in the near future.... Fracking is going to get outlawed state by state {vermonts done, ny, pa, oh, ect coming on fast...} Natural gas is very inexpensive rite now because it is plentiful due to the lack of regulations, BUT that is going to change very soon, and with the amount of buildings now powered by it, it will soon be scarce and this will drive up the price....



We are at the bottom of the roller coater rite now, and there is only one way to go when you are at the bottom... Expect to see NG rates rise through 2014,2015 maybe to the tune of 200 percent... And you are not going to be able to shop around for prices... there is only one gas company in each area...



Kind of makes you think if the current incentives are driven by the knowledge that the Nat Gas service is going to skyrocket....



One more note, I am in no way against natural gas, but I do not believe in throwing away a brand new system and spending $12K on a mod can that may need to be replaced twice in the lifetime that the existing cast iron boiler had left.... You can expect 15-20 years out of a good mod con, you can almost set your watch to 30+ years out of a good cast iron boiler.... They are the facts, I dont think you can show me a boiler that saves you $24K on a house with a 38K BTU heatloss...



I own a two family house{2 small one bedroom studios}, the heat loss is under 40K, I have a cast iron boiler with a tankless, the oil costs me $1600 per year{almost like clockwork}, for me to save the price of a mod con you would have to cut down my bill to $550 a year {with NO service issues for 15 years, lol}!!!! Thats not going to happen....



Now larger houses in the 150K BTU range could benefit, and if the boiler needs to be changed it starts to make sense..... But the truth of the matter is changing the aquastat for an ODR model, maybe installing some delta t circs and programmable t-stats is a good way to get them some savings, with a good tune up and maybe an outdoor intake kit... you can sell them $800 of parts and labor that will pay for itself in a handfull of years vs NEVER,...

BobC

Thats why

I went with the EZ-Gas in the Smith G8. This is a small 1,100 sq ft house, I just don't think a modcon would ever make sense here - especially on a steam system.



Its cast iron and it will work with an oil gun if push comes to shove.



Bob

TonyS

Gas prices aren't going anywhere

until they can figure out an easy, inexpensive way to liquify and send it off shore.Until then the only audience is the one tied to the main and that's not near enough for the gas they found.Alot of the oil here is being bought for welfare low income heating clients and section 8 housing by our government aka us.without those programs a lot more oil companies would be dropping out.Many of the wells up north are wet wells and propane is being pulled from them, so propane here is also at a low, it was 1.27 a gallon end of summer and is now 1.46 during the winter. Way cheaper than oil BTU wise and even more so when you have higher efficiency boilers to burn it.But I will say I do more propane conversions than replacements because the roi isnt as good.Give me a date when its going to double Heatpro and I will tag this thread and set my calender to that date and we will see how close you are.

Jean-David Beyer

Gas prices aren't going anywhere until ...

It seems to me that they will go somewhere even without environmental concerns reducing the amount of fracking going on. As more and more power plants must stop burning coal because of all the toxic waste products, the logical thing for them to do is convert to natural gas. One such power plant can burn way more gas than every house on my block. Perhaps in my whole (small) town. In my state, the coal fired power plants cause so much pollution that they are excused from printing the amount they produce on their bills  and just say it is more than the national average (or some such thing). Maybe it is just more than the state average.



Can you imagine the increase of natural gas consumption if all the coal fired power generation plants are converted to natural gas? I assume the conversion is easier than the conversion to oil, and probably they would not do that unless the relative prices change a lot.

JStar

Gas

We do a lot of burner conversions. The total price of the job is recovered in fuel savings in 2 years or less. How is that too long?

heatpro02920

...

Tony, Ill play I say we are twice the cost we are at now by january 2015....



and J, I also do a lot of conversions, BUT, you show me the math..



a small cape with a 35K BTU heat loss, and a 3 section oil fired boiler with a tankless will pay back {$2500 for the gas conversion} in 2 years, lol.



And I wasnt talking about burner conversions, Im talking about throwing a 2 year old boiler away to install a new gas boiler, you have to factor in the wasted cost of the old boiler....



burner conversions can make sense, but I haven't done many that will bring back the cost in 2 years???? Plus my price of 2500, isn't including bringing it in, thats for a house that already has a meter.... now if you have to bring it in you can add another 800 easily...

JStar

Gas

We're not far off from your price. In fact, we're more expensive. Our conversion customers have saved an average of 60% compared to oil. A home with a 75MBTUH boiler that used $4000 in oil last year is now using $1600 in gas. That's a savings of...wait for it....$2400! Very interesting, isn't it? Of course the numbers get spread out with smaller BTUH rates. So, the ROI goes from 1 year to 1.5 years.



Maybe now, I will be the one to "lol" in your direction.

heatpro02920

$4000?

We are talking about different systems here, $4000 heating bill is not a small load thats over 1000 gallons a year... You must be in a much colder climate than me...



If natural gas prices stay low like this {which they can NOT} and a house uses the $4000, thats about 1100 gallons that is about 153,000,000 btus . that many btus in ng will cost you about $2500 thats a savings of $1500 per year, so yes a burner conversion will make sense, the problem is its not going to stay this low, and I am talking about houses that cost $1500 a year to heat not $4000 {my house is over 4000 sq feet with some ceilings that are over 24' and if I heat it with the oil system it only costs me $3200 a season!!!}... So obviously we are not talking about the same sized properties... I am in CT so its cold here, and I have a lot of rental properties some of which I pay the heat, a small cape can be heated for $1500 a year and at that price its hard to pay for a gas conversion, and even harder to make up for throwing away a 2 year old boiler...



I hate to see this get so far from my original point, I am talking about small heat loads, with newer functioning boilers being tossed out in place of high eff. equipment..... Not houses costing $4000 per year and gas burner conversions....

And forgive me if my math is wrong, its about as good as my spelling and typing...

moey

consider it

I would consider it even if my savings were only $300 or $400 a year. People have different reasons. I hate looking at the oil tank. I would pay to get it out of my house ( i.e new system ). Its much more attractive to sell a house on NG then oil.  Oil and NG if I were a gambler will continue to separate themselves on cost. Remember a 20% increase in oil is more then a 20% increase in NG at the end of the heating season in terms of dollars spent on heating. The numbers right now may not play out so well but I suspect in years to come they will.



In the case mentioned the people bought the house with the system, they probably never liked it from day one but liked the house. They probably got a discount on the house compared to neighboring houses because it was still on oil. Id like to think I got a discount on my house that had a 25 year old boiler in it compared to ones that had brand new ones in it, although heating upgrades dont always translate like that.



Just my uneducated 2c

HomeOwner1

Our experience was similar

This was our family's thought process:



We had a cast iron boiler that ran on oil and was consuming about $1000 of oil a month during the coldest months in Cherry Hill, NJ. This was not an inefficient boiler 85%, just was that was too big for the house and running in small start up and shut down times. We had service techs out to try and tune the thing, but we could only get it so good. We were dropping somewhere in the neighborhood of $7000 or more in oil fuel a year. Plus, the hot water was supplied from the thing as well. So, in the summertime, we had to keep that huge block of iron warm all the time.



We did our homework before pulling the trigger.



From our research, natural gas alone on the same unit would have saved us just on fuel costs alone. Almost half the price, about and rough equivalent $1.85 per gallon versus $3.75 a gallon. But that would have meant keeping the unit running all year long still.



Then, by the time we factored in putting a separate water heater and converting it, putting in a new front burner piece, chimney linings, and other parts, it would have run just a little under the same price as a new cast iron boiler, which came with a warranty and came with all the parts.



Then, the low cost combi options were considered. The nice part about those units is that everything is in one unit with no need for any additional equipment. The not nice thing is that everything is in one unit as well.



The quoted replacement cast iron boiler was an 80% efficient unit in that price point. The best-fit combi was a 92% condensing modulating from Navien that fit our heat loss and hot water requirements. There appear to be more historically proven brands like Triangle Tube out there that make smaller units like this one in the same price point.



The cast iron had the benefit on being more reliable since it is just a hunk of iron at the end of the day. Simplicity has its virtues.



So, for just about the exact same price between a combi modulating condensing 92% boiler versus a cast iron replacement at 80%, we went with the high efficiency because cost-wise it made sense in our case. We will see payback in safely under 2 years going this rate with fuel bills so far, but that is just our case.



But, if the combi unit was not available for that price point, then we would have been left with only Condensing boilers with separate indirect hot water tanks as a higher end option, which would have raised the price because they are more expensive boilers and and require an additional hot water heater or tank. So, if we were down to these options only, we would have probably went the cast iron boiler route since the alternative was twice the price and payback was over a much longer term.



To your point, yes it felt senseless to rip out and throw away a perfectly well running boiler. But the dollars and cents sometimes work out.

russiand

Oil is just too expensive

Oil has gotten way too expensive. Its bugs me to no end that a few houses down the street they pay half of what I pay to heat my house, if not less. The current prices per gallon are simply crazy. There is no question that the payback is quite quick right now given how expensive the oil is. If gas is on the street and you are burning oil, you are throwing money away. Gas will go up, but oil will too. I would gamble on gas staying cheaper than oil for foreseeable future.  I hope that local municipalities get involved and have gas companies bring natural gas to more and more homes. Home heating oil is dying a slow but certain death.  If it were cheap like before, I wouldn't have anything against it at all. But boy at these prices people will and should run away from it.

Jamie Hall

Well now...

it may be a slow but certain death for home heating oil.  But I -- and a whole lot of other people living in more rural areas -- have good cause to hope that it's not.



It's all very well for those living in urban and suburban settings, where there may be a connection or a potential connection every hundred feet or so, to be all enthusiastic about natural gas.  It may even be fine for various government officials to be all enthusiastic.



It's even a nice exercise in democratic initiative.



But.



At the risk of sounding a little snarky, how do you propose to provide natural gas -- and if heating oil does disappear or get priced out of sight to subsidise natural gas -- to those of us (granted, a small minority, but we're still here) who live in a rural setting?  Do the folks who live in the country get to pay for extending the gas lines themselves?  Do you establish a federal program to do it, such as the TVA or REA did for electricity?



Just askin'...

moey

propane, LNG

Propane isn't going anywhere, LNG ( liquefied natural gas ) is starting to show up. Geo costs are going down.

russiand

That is an excellent point.

I think home heating oil will certainly continue to exist for some time, for sure. Especially in rural areas. However given its ridiculous and I mean ridiculous price, most folks will be forced to look for supplemental heat sources or alternatives.  Given the current price trend for heating oil, it can't survive long term, is all.   

SWEI

liquid fuel demand

From the transportation sector is the cause.  Best not to be competing with it.

Steamhead

It's not just the price of the oil

oil is perceived as a dirty, troublesome and sometimes hazardous fuel- and much of this is based on the lousy service oil suppliers typically provide. More and more people don't want anything to do with oil. Gas utilities have been taking full advantage of this perception and the oilheat industry has done little or nothing to clean up its act- we still find boilers full of soot that the oil techs "serviced" in the past couple months.



So, to these customers, junking a relatively new oil-fired boiler is nothing. They see it as getting rid of something that will cause them major problems down the road. They want it gone.



Save that Slant/Fin for an Oil Heat Cares-type project. Someone will appreciate it.

Steamhead

One of our recent burner conversions

paid for itself in a year. Of course we also thoroughly cleaned that boiler when we put the EZ-Gas in!

JohnHenry_2

why can't nat gas prices stay this low?

Look at the price they're getting for it at the well head, ~ $3.50 MM BTU.



http://www.eia.gov/todayinenergy/detail.cfm?id=9490



Check out this chart for residential oil and propane prices, http://www.eia.gov/dnav/pet/pet_pri_wfr_dcus_nus_w.htm



All this with a huge reduction in nat gas rigs over the last couple of years.



The extraction technology is getting better every year and the "extractors" are figuring out better ways to maximize gas production from each well every month.



http://www.eia.gov/forecasts/aeo/MT_naturalgas.cfm



The nat gas prices you'll be paying in Jan of 2015 have probably already been set by futures contracts. I fully expect to be paying less in 2015 than i'm paying now. My rates have gone down in the last 2 years.



The price is 50% higher on the east coast because of pipeline capacity issues, not abundance issues. Those pipeline capacity issues are being rectified right now.



You go ahead and go long on nat gas prices and you'll be in the poor house before you know it...

TonyS

Heres a calculator

I have found it is conservative.



http://www.triangletube.com/TriangleTubeDownloadsSavingsCalculator.aspx

heatpro02920

$1000 a month?

WOW, thats a lot of heat m thats like 275 gallons a month which is rite under 40 million btus a month.... Unless your house is 11K sq ft, you need insulation, not a new boiler, lol...

CMadatMe

Why Is It

That only our industry looks at total payback? What payback do you get from a car? How many Ford Fusions or similar cars do you think are sold based on what is the payback on my fuel? How about even for a house after you factor in the years of taxes you paid?



Heating and Cooling equipment is no different then any other consumer product we purchase. Problem is manufactures towed the pay back tool in the sales pouch, we used it and then created the pay back monster we all have to overcome now.



Here's your pay back. Burn less fuel, enjoy comfort and know you are reducing your CO footprint. Now run out, get in that SUV, head to Walmart via your fav fast food joint and finish it up with a Starbucks..

SWEI

$1,021 for the month

of February, which bought my client 176,356,500 BTUs of natural gas -- and heated 30,000 square feet.

Jamie Hall

Perhaps that's the difference

between a consumer and a client?  I can't afford to NOT consider cost/benefit in what I do, whether it's a tractor or a truck or a tool for maintaining this ark, or repair or replacement for the boiler... or roof... or whatever.

Robert O'Brien

Payback?

I was at the house I installed my first G115 in Sept 2005, today(oil filter) He keeps quite good records and says he's saved 3200 gallons of oil since then or over $13,000 at today's prices. His first delivery after install in 2005 was $1.25/gallon. Kind of puts the "can't afford it" in a new perspective!

http://forum.oiltechtalk.com/cgi-bin/yabb/YaBB.pl?board=OILHEAT;action=display;num=1363381317

JohnHenry_2

Don't forget

That every dollar you don't spend on oil is a dollar that doesn't go on the wrong side of our trade balance. It stays right here in the US of A, getting spent over and over again on everything from drilling gear to pork chops. Mmmmm, pork chops!

heatpro02920

Good point John

I am in no way against changing over to gas, because oil obviously is soon going to be a thing of the past, but don't toss out a functioning boiler with decades of service left in it, to save 1/2 of what the boiler costs...



And Im sure tossing out a 2 year old boiler is not good for your carbon footprint either...