payback periods ugh!!!!!!!!!!!!!
When we bought our OWB this summer, the dealer had this outdated chart on the wall, on how long it would take to get your money paybacked for a OWB purchase. If I went by their math method, it would be about 5-6 yrs for us. They only fiqured the cost of whatever you were using for fuel, for the year divided into the OWB purchase price would give you the time in years for payback. They did not take into account the price of the wood.
I tried to explain it to him, that if we use 500 gallons of propane a year, times whatever it is a gallon, then subtract whatever the amount of wood we use will cost us, then the end result in dollars would be what we save for that year. I am guessing closer to 10 yrs payback for us.
We should save some electric costs also, as we have a heat exchanger on the hot water tank.
OK before we get any further: you have to decide what your time is worth including the items below.
A payback period involves its opportunity cost; the present value of the dollar cost, the interest expense for the asset and installation purchase cost, the depreciation of said asset-seven years at most, expenses for repair of the asset-annual water treatment, possible pump replacement, and what it costs to operate it, unexpected expenses such as welding to repair leaks and the scrap value of the asset.
I know its not something you want to deal with but it involves
1.The initial cost of the boiler/furnace and its complete labor and installation costs for the concrete slab and excavation of the trench or trenches, the tubing for heat transfer, once you lose heat in a trench you have to reheat it again.
The back filling of the trenches after testing, the wiring in the separate pipe for the controls of the boiler. The household liability rider for your systems installation period for several days.
2. The Installment loan interest expense of the loan for the seven years or less.
3. The cost per month every month of operation of the electrical energy it uses to deliver the heat energy to your home for heating and or domestic hot water.
a. The additional insurance costs for the asset, this should include addional insurance in case of a lightning strike which would fry the controls of the boiler and could install a neat hole in it too. living on a mountain with a well and a steel casing has both cost me and made me a student of lightning.
4. The actual delivered cost of wood or coal or pellet or wood chip fuel for the OWB or OWF per year.
5. The fuel tax paid on said fuel if any every year.
6,. the cost of fossil fuel used during the periods when the OWB or OWF is not operating-no fire/away on vacation.
The total cost of the asset and installation expense, plus utilities, and water you paid for the water being pumped into your boiler every month, and the fuel, fuel tax, additonal insurance and most of all what is your time worth to go out and fill a boiler several times a a day if you have a small water tank in your boiler versus a hot water storage tank as an additional means to store water and reduce the amount of wood you burn in total by heating up a huge amount of water just once a day or two.
So a dealer showing you a return on a household investment is very misleading due to all the above factors. I am not downing anything but you have to understand what is involved as the minute they leave your install they made all thier money before hand and you are paying for the privilage of owning an outdoor boiler for seven years not including the fuel , fuel tax, utilities expense, water expense, annual water treament expense, water testing expense, loss of heat energy due to the inherent ineffiencies of some boilers with out forced draft fans, and everything I have mentioned above last but no least is the expense and desire for a generator to run the boiler when the power is out and to pump water into the boiler if needed from a well.
Most of all how close are your nearest neighbors and are they friendly??????
I have no desire to start a flame war with anyone but a payback period explained by a dealer to a customer is a fallacy simply due to actual expenses and present values versus future values of assets and expenses.
leon
opcorn:
Your in it now so you may as well just enjoy the independence and forget about what it cost you. Now when they talk of $5 a gallon propane you can just sit back and smile to yourself.
