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When South Carolina custom home builder Tom Dillard built his own home on a farm, energy independence was a priority.
“We put in three propane tanks, all linked together,” he told LP Gas magazine. “We had natural gas available, but we chose propane to put in there, and solar power as well. So, if we wanted to take ourselves off the grid for a while, we could.”
Dillard, the founder of Dillard-Jones Builders, sees propane as a key part of his home design and building process, whether it’s for his own dream home or for his customers. “Propane is a versatile and reliable energy source that enables us to build high-quality, timeless homes that integrate well with the surrounding natural landscape,” he says. “We use propane as an energy source for our homes during construction and when we turn it over to the homeowners.” An environment-first philosophy extends to the builder’s energy choices for all of his projects: “Using clean fuels for things that make sense for the environment is super important to us,” he explains.
Making a choice on energy
Whether you are a production or custom builder, the type of energy you run to your homes will have a large bearing on both your upfront costs and your client’s future energy costs, comfort, and safety. Energy options can include propane, natural gas, or electric.
Some projects will be located in areas that simply don’t have access to natural gas, or they are entirely off the grid, so propane will be the ideal option to get access to the efficiency and comfort of gas systems. But when you have a choice to extend natural gas lines or employ propane in your new builds or developments, there is an important calculation to run to ensure your clients get the best bang for their buck and that their appliances and systems run optimally.
It doesn’t always make financial sense to run a natural gas line to the property or development, even if it’s available. A community propane tank or individual tanks that can be installed on-property may be your best option for energy independence. The local propane provider can help you run the numbers to ensure you have the big picture and you’re making the best energy choice for future residents.
Cost Benefit Analysis
You will want to take each of the following costs and revenue opportunities into consideration to determine whether your single-family residence or development should be fueled by propane, natural gas, or all-electric:
Utility and vendor fees
- Depending on your market, extending natural gas lines can cost as much as $1 million per mile, which may be unreasonable or prohibitive. Building all-electric homes could drive up the cost of bringing in adequate electrical supply and lead to timing delays waiting for more or larger transformers.
House plan design
- If you are a production builder and normally construct homes with gas, switching to all-electric may require changes to your standard offerings so you must consider the costs to create or modify home plans for all-electric or gas.
Construction costs
- Propane and natural gas homes will need to be plumbed for gas lines, while all-electric homes may require upgraded electrical service and additional high-voltage outlets.
Price premium
- In many markets and price points, buyers will pay a premium for the energy efficiency of gas heating and water heating, upgraded appliances such as gas ranges, or unique amenities such as fireplaces and outdoor living packages.
Options revenue
- With propane, instead of all-electric, builders can offer more options such as backup generators, fireplaces, and barbecue connections.
Considering Spark Spread
In some markets, peak pricing of electricity makes choosing propane the more economical option for energy. This is called “spark spread,” or the price difference between electricity generated by the local utility and that of propane in a given market. The use of propane is particularly viable in states with high electric rates, lower propane rates, and limited electric infrastructure. Utilizing propane provides grid relief and energy independence. Propane is non-toxic and will not contaminate soil or groundwater and has been designated a clean energy by the Environmental Protection Agency (EPA). Propane used on-site is cleaner than the average emissions of the US grid, which is powered nearly 60% by coal and natural gas. If you are building in an electricity-heavy region or using renewable energy sources such as photovoltaic panels, remember that propane is still an option to supplement electricity use and can be used for backup power or dual-fuel systems.
Builders and developers planning residential builds or retrofits can benefit from specifying propane – clean, safe, resilient and reliable energy that allows you to build and live anywhere.
