Heat Pump Installation in Public Buildings: Savings and Environmental Benefits in Underserved Rural Areas

Piotr Gradziuk, Aleksandra Siudek, Anna M. Klepacka, Wojciech J. Florkowski, Anna Trocewicz and Iryna Skorokhod
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Aleksandra Siudek: Department of Economics and Organisation of Enterprises, Institute of Economics and Finance, Warsaw University of Life Sciences, 02-787 Warsaw, Poland
Anna M. Klepacka: Department of Economics and Organisation of Enterprises, Institute of Economics and Finance, Warsaw University of Life Sciences, 02-787 Warsaw, Poland
Wojciech J. Florkowski: Department of Agricultural and Applied Economics, University of Georgia, Griffin, GA 30223, USA
Anna Trocewicz: Faculty of Economic Sciences, John Paul II University of Applied Sciences in Biala Podlaska, 21-500 Biala Podlaska, Poland
Iryna Skorokhod: Department of International Economic Relations and Project Management, Lesya Ukrainka Volyn National University, 43025 Lutsk, Ukraine

Energies, 2022, vol. 15, issue 21, 1-16

Abstract: Heat pump technology offers a path towards reducing the use of fossil fuels to heat space, providing energy bill savings and reducing air pollution and GHG emissions. The choice of heating method is based on costs; hence, this study examines the gains from operating heat pump systems in public buildings as well as alternative systems using electricity, LPG, and heating oil. The study focuses on the Ruda-Huta municipality in Poland that, as is common in rural areas, lacks access to a district heating system or piped gas. The empirical analysis includes heat pump installations in eight municipal buildings. The study found that the use of ground source heat pumps proved competitive with existing heating systems in terms of payback time. Calculations for three heating energy source scenarios, i.e., electricity, LPG, and heating oil, used the Simple Pay Back Time (SPBT) and the Levelized Cost of Heat (LCOH) methods and the average prices of the three energy types for the period 2012–2021. The payback period calculations disregarded the EU subsidies for heating systems utilizing renewable energy sources (RES). The payback time for electric, LPG, and heating oil were, respectively, 6.7–7.8 years, 4.1–6.1 years, and 6.7–6.9 years. Much larger spreads favoring heat pumps were calculated using the LCOH, and the costs in the case of electric heating were nearly three times higher and doubled when using heating oil and LPG. The gains from investing in heat pump systems have been offset by the increase in electricity, LPH, and heating oil prices, which have been predicted to continue to increase in the foreseeable future supporting the use of heat pumps in rural areas lacking access to, for example, district heating systems. The switch to heat pumps reduced local air pollution by eliminating the burning of fossil fuels to heat space in public buildings.

Keywords: energy price; heat pump; municipal buildings; electricity; heating oil; Simple Pay Back Time (SPBT); Levelised Cost of Heat (LCOH); air pollution (search for similar items in EconPapers)
JEL-codes: Q Q0 Q4 Q40 Q41 Q42 Q43 Q47 Q48 Q49 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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