Developers turn to propane systems to sustain off-the-grid communities.
By Amy Campbell
When Dream Developers began construction on its newest 55-plus community, Laurel Ridge, the desire to install natural gas for the 88-home development was sufficient, but the means were not.
The East Hampton, Conn., company, had few options: pay for the infrastructure to tap into the nearest gas line or move to an oil-based system, which it had installed in other communities. Instead, company owner Stephen Motto turned to a different type of gas: propane. “We chose propane because it’s a cleaner-burning energy and has less discharge of toxics,” Motto explains.
The company installed a network of 1,000- and 1,450-gallon underground metered propane tanks to fuel the development, also located in East Hampton. The system supplies propane for a wide range of gas functions, including outdoor grills, heating, cooking, hot water, and fireplaces. It also fuels the community’s 3,000-square-foot clubhouse. The success of the development garnered Dream Developers the 2008 Propane Exceptional Energy Homebuilder Award from the Washington, D.C.-based Propane Education & Research Council (PERC).
Propane, once just a backyard barbecue accessory, is gaining ground as a reliable, cost-efficient fuel source for commercial, residential, and agricultural areas without access to electricity grids or natural gas lines. Many users today count on propane to heat air and water, cook, power irrigation systems, or fuel construction equipment and backup generators. In fact, propane supplies 4 percent of the country’s energy needs, and that number can easily grow, since 90 percent of the propane used in the United States is produced at existing North American facilities, according to PERC. All told, 60 million Americans use propane in some form every day. Of that number, nearly 5 million U.S. households rely on propane for home heating, while 3 million use propane for residential water heating.
HOW IT WORKS
Propane’s growing popularity can be traced to its convenience and accessibility. “[Users] still want the comfort and convenience, but natural gas lines are sometimes limited because of geology,” says Tom Jaenicke, energy advisor for PERC.
Expansion of natural gas lines is typically limited to major metropolitan areas due to the high cost of infrastructure. “If developers have a track of land that is primed for development but natural gas is not available, with propane, we’re able to skim over those miles and infrastructure costs and place a large propane tank within the community,” Jaenicke adds.
Constructed and operated under stringent industry codes and regulations, a propane system can serve a single office building or home, or large, mixed-use communities via pipelines similar to those used in a natural gas system. Each building will have an individual meter, and in smaller developments, a developer might choose to add individual tanks. While infrastructure costs vary, some gas companies offer developers incentives to install propane systems.
The propane tanks—usually buried underground with only the tank dome visible—range in size from 500 gallons for a single structure to 30,000 gallons for multiple buildings. The average homeowner will use between 700 gallons and 1,000 gallons of propane annually; business and agricultural usage varies. The
tanks are refilled by the propane provider, and users are billed based on how much they consume.
The cost of propane is similar to that of natural gas. However, propane costs about half as much per BTU as electricity over time, according to U.S. Department of Energy statistics. This translates into lower energy bills. What’s more, unlike electricity, propane can be stored for long periods of time, making it an ideal backup energy source for hospitals, factories, and farms.
Although natural gas typically costs less, propane’s carbon footprint is smaller. Propane also is a cleaner, safer source of energy and an approved alternative fuel listed in the Clean Air Act and the National Energy Policy Act. For example, tankless water heaters powered by electricity produce three times more greenhouse gases than those fueled by propane, according to a recent study by PERC. Propane also is not a soil or water contaminant. If there is a leak, propane, unlike natural gas, simply becomes a vapor and dissipates, reducing
the likelihood of an explosion in the case of a leak.
A SMART ALTERNATIVE
For developers searching for alternative energy sources, propane has emerged as a more affordable, efficient way to supply energy to remote communities under-served by existing utility providers. This was part of the lure for Qualico Development in Austin, Texas. Th e company is partnering with HBH Gas Systems to install a propane system for a 900 single-family home buildout in a suburb outside of Austin.
Smarter Starters: Propane is becoming the alternative energy source of choice for starter home developers such as Qualico Development in Austin, Texas.
With Austin’s soaring electricity costs, finding an alternative energy source for the starter homes was critical. “We wanted to be able to deliver those homes at a reasonable cost,” says Vera Massaro, regional
development manager. Propane also gives the homeowners more flexibility. “They have the option to have gas or all electric,” Massaro says. If the infrastructure for electricity is already in place, homeowners can also choose propane to supply some or all of their energy needs. In this scenario, propane is often a lifestyle choice. “Combining the two is a huge marketing tool for us,” Massaro says.
In fact, the availability of propane has helped many developers gain ground in today’s competitive home market. “Developers appreciate and can testify to the savings afforded to the developer—and, by extension, the builder and ultimately the home buyer—by not having to pay for expensive natural gas extensions in areas off the natural gas grid,” Baker says. “They have increased marketability and advantages in the new home market by developing communities with a more economical and preferred energy.”
To sell customers on propane, developers should know the facts. “Make sure you have enough information so you can answer their questions about propane versus other energy,” Motto says. Also, work with a reputable gas provider that offers a regular fill schedule to guarantee customers have a streaming supply of propane.
“Do your due diligence with the company you plan to do business with,” Motto adds. “There are companies that do a good job installing systems but don’t do a good job on the service of the systems.” Once the infrastructure is in place, the developer typically works with a licensed propane plumber to construct the gas lines to each home and install the appliances. When completed, the gas company supplies the meters and regulates supply and billing.
Although developers find there is a learning curve when it comes to constructing propane systems, it’s generally worth the effort. “Electricity is never going away, but it’s not for everyone,” Jaenicke says. “Consumers need a range [of products] to serve their energy needs. Propane and natural gas really provide the comfort and energy desirable to consumers in many parts of the home.”
Amy Campbell is a freelance writer in Phoenix.
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Energy Snapshot
The Washington, D.C.-based Propane Education & Research Council says propane usage is on the rise. Here are some more fast facts.
1. Nearly 60 million Americans use some form of propane every day.
2. Propane accounts for 4 percent of all energy used in the United States.
3. 90 percent of the propane used in the country is produced domestically.
4. Propane is an energy-rich, nontoxic, colorless, and odorless gas.
5. Propane is the by-product of two other processes—natural gas processing and petroleum refining.
