Rural Salem NH Propane-to-Heat-Pump Conversion — Case Study

Property: Approximately 2,200 sq ft rural single-family residential, rural Salem NH
Owner: R.P. (property owner alias)
Scope: Aging propane furnace and central AC replaced with mid-tier Bosch IDS 2.0 variable-capacity heat pump; complete propane elimination including 500-gallon underground propane tank in-place decommissioning; NH regulatory framework applied to propane conversion scope
Timeline: Diagnostic and design 3 weeks, installation 5 days, propane tank in-place decommissioning 1 additional day (coordinated with licensed propane contractor)
Investment: $24,600 combined installation and propane tank scope, $2,000 NH Saves heat pump rebate, $2,000 IRA 25C federal tax credit, net $20,600

Situation

R.P. owns a rural single-family residential property in rural Salem NH. Salem NH’s rural areas maintain substantial propane retention pattern in the more rural portions of the town away from the substantial Liberty Utilities gas coverage in the developed areas. Rural Salem NH properties typically operate on propane heating (aboveground or underground tanks) or fuel oil heating rather than Liberty Utilities natural gas — reflecting the historical pattern where Liberty Utilities gas distribution infrastructure did not extend to the more rural residential areas of Salem NH.

Rural Salem NH propane retention pattern is similar to but smaller in scale than Pelham NH’s substantial propane retention (approximately 50-70% of Pelham NH properties operate on propane rather than Liberty Utilities gas). Rural Salem NH propane retention represents perhaps 15-25% of Salem NH properties in the more rural portions of the town.

R.P.’s property configuration: approximately 2,200 sq ft two-story residential on approximately 1.2 acre rural lot, forced-air propane furnace serving ducted distribution throughout, matching central AC installed with the propane furnace approximately 20 years ago, 500-gallon underground propane tank in rear-yard buried at approximately 4-foot depth, propane water heater in basement mechanical space (R.P. plans separate replacement in future upgrade cycle).

R.P. requested Rivic assess replacement options with priorities: (1) fossil-fuel elimination through heat pump conversion for NH Saves rebate opportunity (R.P. aware NH Saves rebate is smaller than Mass Save but still relevant), (2) propane operating cost reduction given the ongoing propane price fluctuation which has been particularly notable through recent heating seasons, (3) complete propane elimination for the furnace scope including underground tank decommissioning, (4) mid-tier equipment specification matching R.P.’s budget priorities.

Diagnostic and Assessment

Andrew Samples conducted the initial diagnostic assessment (given the rural Salem NH context similar to other rural propane conversion assessments completed in the Rivic service area). Kathleen Brennan initiated licensed propane contractor coordination for tank decommissioning scope.

Key findings: (1) 20-year propane furnace at end-of-life range with declining efficiency, (2) 20-year central AC also with declining efficiency and typical refrigerant charge decline, (3) existing ductwork acceptable for heat pump conversion with minor sealing improvements, (4) 200A Eversource NH electric service adequate for heat pump installation, (5) 500-gallon underground propane tank buried at 4-foot depth requires licensed propane contractor for decommissioning, (6) propane water heater retained requires continued reduced-demand propane service (small monthly propane delivery scheduling continues for water heater only; R.P. plans replacement in future upgrade cycle at which point complete propane elimination would apply).

ACCA Manual J load calculation determined property heating load at 4°F winter design of approximately 42,000 BTU/hr and cooling load at 88°F summer design of approximately 30,000 BTU/hr.

Solution: Mid-Tier Bosch IDS 2.0 with Partial Propane Retention

Rivic recommended Bosch IDS 2.0 mid-tier variable-capacity heat pump 3.5-ton nominal capacity with existing ductwork utilization matched to R.P.’s budget priorities. Equipment specification: (1) Bosch IDS 2.0 inverter-driven variable-capacity outdoor unit, (2) Bosch matched indoor air handler with variable-speed ECM blower, (3) Bosch standard programmable thermostat, (4) 5-year Bosch parts warranty + 10-year compressor warranty.

Existing ductwork utilization: minor duct sealing improvements at accessible joints; supply and return grille inspection confirmed adequate condition.

Propane furnace and central AC decommissioning: 20-year propane furnace and central AC removed with proper refrigerant recovery per EPA Section 608; propane piping from underground tank to previous furnace location capped; propane water heater retained with continued dedicated propane service line.

Underground Propane Tank In-Place Decommissioning

R.P.’s underground propane tank decommissioning scope differed from the Western Dracut Pelham NH border case study (which selected complete tank removal at $3,600). R.P. selected in-place decommissioning as the more cost-effective option for the retained propane water heater context:

• In-place decommissioning rationale: R.P.’s continued propane water heater use requires either a new smaller propane tank (250-gallon typical for water heater only, requiring new tank installation and previous tank decommissioning) or continued use of the existing 500-gallon tank with reduced usage baseline. R.P. selected the second option (continued 500-gallon tank use for water heater with reduced propane delivery scheduling reflecting the water-heater-only demand). Consequently, tank in-place decommissioning does not apply during the initial installation scope; the existing tank continues to operate for water heater service.

Correction to the case study scope: this case study reflects an incomplete propane conversion given the water heater retention. Full propane elimination will apply at time of future water heater replacement, at which point either complete tank removal or in-place decommissioning would apply. Current scope: propane heating replaced with heat pump; propane water heater and existing 500-gallon underground tank retained.

Revised propane tank scope: $0 tank decommissioning during current installation (retained for water heater service). Future decommissioning cost estimate (at water heater replacement): $1,800-$4,200 depending on option selected (complete removal vs in-place decommissioning). This scope adjustment updates the investment summary below.

Outcome

Installation completed over 5 days including outdoor Bosch IDS 2.0 placement, indoor Bosch air handler installation, ductwork sealing improvements, refrigerant charging, propane furnace decommissioning, and thermostat programming. Post-installation first-year operational verification: heat pump operated reliably through the first winter including cold-snap periods with outdoor temperatures reaching 4°F to 8°F range typical of Salem NH climate.

Ongoing Operating Cost Change

Post-installation first-year utility monitoring: total electric operating cost approximately $1,220 for combined heating and cooling. Previous year utility costs: propane heating approximately $1,920 (20-year furnace declined efficiency plus propane price fluctuation), electric cooling approximately $540 (20-year AC declining efficiency), combined approximately $2,460/year. Annual operating cost reduction approximately $1,240/year — larger reduction typical for propane conversions given propane’s higher cost per BTU vs natural gas. Continued propane water heater operating cost approximately $340/year (reduced from previous approximately $580/year with prior delivery scheduling reflecting combined furnace + water heater load).

Investment Summary

• Total installation cost: $24,600 (Bosch IDS 2.0 3.5-ton equipment with matched air handler, installation labor, ductwork improvements, refrigerant charging, commissioning, propane furnace decommissioning)
• Propane tank decommissioning (current scope): $0 (retained for water heater service)
• Future tank decommissioning estimate (at water heater replacement): $1,800-$4,200 depending on option
• NH Saves heat pump rebate: $2,000
• IRA 25C federal tax credit: $2,000
• Net investment: $20,600 after all rebates and tax credits
• Comparable MA scope hypothetical: Mass Save Partial-Home Heat Pump rebate $4,000 (partial fossil-fuel elimination since water heater remains on propane); MA net investment approximately $18,600 — NH installation is approximately $2,000 more expensive net given the rebate framework difference on partial-scope installations. Note: the NH-vs-MA gap on partial-scope installations is smaller than on complete-scope installations (which is $7,500+ difference).
• Annual operating cost reduction: approximately $1,240/year
• Additional value: 5-year Bosch parts + 10-year compressor warranty; substantially improved reliability compared to aging 20-year equipment; foundation for future complete propane elimination when water heater replaced

Frequently Asked Questions About This Case Study

Can Rivic complete similar propane-to-heat-pump conversions in my rural Salem NH or other rural NH propane-served property?

Yes for properties with suitable configuration. Prerequisites: adequate Eversource NH electric service (typical 200A minimum for modern electric infrastructure), existing ductwork suitable for heat pump conversion or property configuration supporting multi-zone ductless configuration, propane tank scope suitable for decommissioning coordination or continued reduced-demand service (typical residential 250-gallon or 500-gallon aboveground or underground tanks all suitable), and propane supplier account coordination (Kathleen Brennan handles). Rivic subcontracts licensed propane contractor for tank decommissioning scope when complete elimination applies. NH regulatory framework coordination applies for all NH installations. Typical installation range for rural NH propane conversions: $20,000-$36,000 gross depending on equipment tier, tank scope, and installation configuration, $14,000-$28,000 net after NH Saves rebate and IRA 25C credit.

Why retain the propane water heater instead of complete propane elimination?

R.P.’s decision factors favored partial retention: (1) propane water heater at approximately 10-year age with reasonable remaining service life, (2) coordinated water heater replacement planned for future upgrade cycle when the water heater approaches end-of-life, (3) reduced immediate scope allowing lower current installation cost with future coordinated scope, (4) continued reduced-demand propane service acceptable given the reduced monthly delivery scheduling from water-heater-only demand. Complete propane elimination during initial installation would have required simultaneous water heater replacement (heat pump water heater or electric water heater), adding approximately $2,500-$4,500 to current installation cost. R.P. selected the coordinated future replacement approach to spread investment across two installation cycles. This approach is common for properties with newer or mid-life water heaters. Property owners with water heaters at end-of-life typically favor complete elimination during initial installation given the coordinated scope efficiency.

How does rural Salem NH propane retention compare to Pelham NH propane retention?

Both rural Salem NH and Pelham NH maintain substantial propane retention patterns reflecting the historical lack of natural gas distribution infrastructure extending to more rural residential areas. Scale difference: rural Salem NH propane retention represents perhaps 15-25% of Salem NH properties (in the more rural portions of the town); Pelham NH propane retention represents approximately 50-70% of Pelham NH properties given Pelham NH’s more consistently rural residential character throughout the town. Rivic’s propane conversion scope is comparable for rural Salem NH and Pelham NH installations — same equipment specification approaches, same licensed propane contractor coordination, same NH Saves rebate framework. See the various Pelham NH case studies for additional propane conversion examples in the more consistently rural Pelham NH context.

Does partial propane retention (water heater only) still qualify for NH Saves rebate?

Yes. NH Saves heat pump rebate typically applies to the heat pump installation itself rather than requiring complete fossil-fuel elimination on the property. R.P.’s installation qualifying scope was $2,000 based on heat pump equipment specification and installation scope; retained propane water heater did not disqualify the rebate. This is similar to the Policy Street Salem NH case study’s partial gas retention approach. Mass Save Whole-Home Heat Pump rebate ($10,000) does typically require complete fossil-fuel elimination for the full rebate scope; partial fossil-fuel elimination qualifies for smaller Mass Save Partial-Home Heat Pump rebate ($4,000). NH Saves rebate structure is less scope-dependent than Mass Save. When R.P. eventually replaces the water heater, a heat pump water heater installation would qualify for additional NH Saves heat pump water heater rebate as separate scope.

What’s the typical cost range for rural Salem NH or rural NH propane conversions?

Typical range: $20,000-$36,000 gross depending on equipment tier, tank scope, and installation configuration. This case study’s $24,600 total reflects Bosch IDS 2.0 3.5-ton mid-tier with partial propane retention (no immediate tank decommissioning). Complete propane elimination installations including tank decommissioning typically cost $22,000-$40,000 gross depending on tank scope (aboveground pickup vs underground removal vs underground in-place). Smaller property installations (3-ton systems, smaller rural homes) typically cost $18,000-$24,000 for partial retention scope; larger properties or premium equipment configurations can cost $28,000-$42,000+. NH Saves heat pump rebate typically $1,500-$2,500 depending on qualifying scope; IRA 25C credit ($2,000) applies to qualifying heat pump installations. Propane tank coordination included in Rivic’s installation project management scope at no additional charge.

Contact Rivic Heating and Air Conditioning — Rural Salem NH Propane Conversion

Rural Salem NH and Pelham NH propane-to-heat-pump conversion service including complete or partial propane elimination through heat pump installation, licensed propane contractor coordination for aboveground and underground propane tank decommissioning (complete removal, in-place decommissioning, or continued reduced-demand service depending on scope), NH regulatory framework coordination (NFPA 54 base with NH-specific amendments), NH Saves rebate coordination, and IRA 25C federal tax credit coordination all route through our 225 Broadway #306 office in downtown Methuen. This case study represents a specific installation completed for R.P.; individual property assessments determine equipment specification, tank scope, and installation configuration.

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