Identify a building “system” that actively consumes or passively transmits energy. We will work at the residential scale to limit the scope of the assignment, but the methodology is appropriate for all building types. Problem Residential heating: Natural gas furnace (option 1) versus ground-source heat pump (option 2) • 3000 sq. ft. residence • geographic location: New York State • geothermal heat pumps are also known as ground source heat pumps • be careful with installation costs! 

2. Identify the cost of the “baseline” condition (which we will refer to as option 1). Please consult more than one source to ensure that your first cost for the baseline option is realistic. The baseline, which I suggest below, is a typical standard according to today’s construction practice. Use the web or contact local vendors to find the typical first cost for this option and the annual cost for energy for a 10 year life (or a greater life for systems with longer installed lives). So, for example, find the cost of a gas-fired, forced-air heating system for a 3000 sq. ft. residence and the annual cost of energy for this heating system. You may not find the energy consumption in terms of dollars, but rather in terms of energy consumed (either electricity or natural gas). Use the following factors to convert energy to dollars: Electric power: $0.10 / kw-hr Natural gas: $0.60 / therm (100,000 BTU’s / therm) Now calculate the life cycle cost of the system 

3. Identify the cost of the “green” alternative (which we will refer to this as option 2). Again use the web or local vendors to determine the first cost and the annual energy cost. Following the example, you would find the first cost of a geothermal heat pump system for the 3000 sq. ft. house and the annual energy cost for running such a system. It is anticipated that the first cost will be higher and that the energy costs will be lower. Again, calculate the life cycle cost for the “green” alternative. 

4. Given your research regarding the system, what is the lifecycle cost for the baseline investment? Is the life cycle cost for the green alternative less? 

5. Now, calculate what happens to the life cycle costs of the two alternatives if the cost of energy doubles. Does it change your decision making?