A geothermal system is initially more expensive to set up than a conventional he

Question

A geothermal system is initially more expensive to set up than a conventional heating and cooling system, but the annual operating cost are much cheaper.

a) How many years would it take for the geothermal system to pay for itself? Assume that you are looking to install a new system, and that you can obtain government grant to do so. Use the costs that were mentioned on the previous page. Show all of your calculations. (5 marks)

Installation Cost

geothermal system: $20 000

conventional system: $3500

government grant for geothermal installation : $7000

Operating Costs

geothermal: $100/month

conventional : $150/ month, plus $400/yr for air conditioning

p.s NO PLAGIARIZED WORK PLEASE

Explanation / Answer

Number of years for Geothermal System to pay for itself Y =

(20000 – 7000)/ (100*12) Y = 10.83

It will take about 10 years and 8 months for geothermal to pay for itself.

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