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PATH Case Study

Pumping Up Efficiency:

Builder Grounds Business on Geothermal Heat Pumps

Printable Version [.pdf, 189 KB]

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David Ritchie, Owner
Chisholm Creek Development, LLC
Enid, Oklahoma

Builder Type:

Small Production Builder

The Technology:

Geothermal Heat Pumps (GHPs)

The Project:

As part of a United Methodist Retirement Community called The Commons, Chisholm Creek Development built 16 duplexes and 13 single-family homes in Enid between 2003 and 2006.

"Even with GHPs, energy-efficient HVAC, low-e windows, and R-45 cellulose insulation in the ceiling, I still came in as the low bidder."

-- David Ritchie


The GHP manifold with circulatory pumps connect to the home's HVAC unit. "A commercial builder had the bid to do the entire United Methodist project," David Ritchie says. "The problem was that builder could not--with traditional commercial construction--build the duplexes at a price to fit in the overall complex's budget."

"The general contractor asked for additional bids from about half a dozen homebuilders in the Enid area. I indicated that I would like to do the first model home with geothermal. They said that was fine, but they weren't going to give me any benefit in the bidding process. Believe it or not, even with GHPs, energy-efficient HVAC, low-e windows, R-45 blown cellulose insulation in the ceiling, and R-16 in the walls, I still came in as the low bidder."

"I did this by taking a reduced profit on the model. It was a bit of a gamble, but I knew that once they experienced a couple months in the model and saw the energy bills, it would be easy to sell them on putting geothermal heat pumps in all of the units. As it turns out, that's exactly what happened."

"In July, August and September, the average utility bill for each side of the model duplex ran about $80 a month. United Methodist thought that was unbelievable, since a comparable home usually runs in the $120 to $150 range. When they started seeing the utility bills on our model home, they went absolutely bonkers, and we built the rest of the homes with geothermal. That's also when I saw my profits."

"I had Oklahoma Gas & Electric Co. (OG&E) do a load calculation on the homespecs with and without the geothermal," Ritchie says. "OG&E said if we built the entire project with geothermal, the homeowners would save as much as $100 per month per unit."

According to the US Environmental Protection Agency, GHPs can save homeowners 30 to 70 percent on heating and 20 to 50 percent on cooling costs over conventional systems.

The initial cost of a GHP system varies greatly with local labor rates, lot geology and size, and the type of system installed. On average, a builder could expect to pay between $4,000 and $11,000 more for a 3-ton GHP system than for an air source heat pump system. Due to the investment, GHPs makes the most sense in areas where the temperatures are low in the winter and high in the summer.

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David Ritchie

David Ritchie has been in the homebuilding business for 34 years. His housing development, Chisholm Creek, was incorporated in 1995. He currently focuses on energy-efficient, single-family homes.

Why he uses Geothermal Heat Pumps:

"I was looking for something to differentiate my subdivision and the homes that I was building from the other builders in town. So, I sat down with the estimated costs of GHPs, and determined that I could absorb the initial costs and gain a market advantage."

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Content updated on 5/18/2009

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