Pumping Up Efficiency: Builder Grounds Business on GHPs PATH Case Study

Click here to visit the PATH website. Builder: David Ritchie, Owner Chisholm Creek Development, LLC, Enid, Okla. Builder Type: Small production builder The Technology: Geothermal Heat Pumps. GHPs use the constant temperature of the ground or water below the earth's surface to efficiently heat and cool a home. A GHP system consists of indoor heat pump equipment, a ground loop and a flow center to connect the indoor and outdoor equipment. The ground loop, which is invisible after installation, allows the exchange of heat between the earth and the heat pump. Horizontal ground loops are typically the most economical and are used in new construction with adequate space. Vertical installations (or more compact horizontal installations) have less impact on the landscape and are therefore more often used in existing buildings. 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. 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." The indoor components of a geothermal heat pump His story "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 home specs 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." Learning the ropes "The biggest challenge for me was just overcoming my initial skepticism. To take a risk on a zero-profit bid takes a lot of confidence and trust in the product, and that's not always something I felt about GHPs," says Ritchie. "It was OG&E that really got me started on GHPs in 1999. Before that, I was like every other builder around: If you'd asked me if I built energy-efficient homes, I would've said yes. And I thought I did, but in fact, I didn't really know what energy efficiency was. "I had read about the OG&E program, and asked for some information about it," Ritchie says. "Some people from OG&E came to my office and pitched me on geothermal. I really became irritated and I almost kicked them out of the office, but then they talked me into looking at some geothermal homes around Oklahoma City. After talking to those builders and to distributors, I started to get a little more interested. Then I took a class about geothermal for HVAC technicians, where I learned that geothermal offered tremendous energy efficiencies."   1 | 2 | 3  NEXT