Heat pumps offer an energy-efficient alternative to furnaces and air conditioners for all climates.
Like your refrigerator, heat pumps use electricity to transfer heat from a cool space to a warm space, making the cool space cooler and the warm space warmer.
During the heating season, heat pumps move heat from the cool outdoors into your warm house.
During the cooling season, heat pumps move heat from your house into the outdoors.
Because they transfer heat rather than generate heat, heat pumps can efficiently provide comfortable temperatures for your home.
As we can see in the above analysis that Base Scenario (System 1) has the cheapest project cost (Called First cost above), however it has the peak energy cost and maintenance cost (around 3,896.00 CAD$).
System No 2 (Air to Water Heat Pump Scenario) has a 14% higher first cost then System No 1, however it offers a 43% reduction in operating cost (energy and maintenance cost). The payback for System No 2 (assuming that System No 1 is the base scenario) is 4 years for a life span of 20 years (25% of equipment's life span).
Geothermal Heat Pump scenario (System No 3) has a first cost 65% higher than the one of system No 1 (due to the cost of Ground Heat Exchanger) , however it offers a 52% reduction in operating cost. The payback for System No 3 (assuming that System No 1 is the base scenario) is 15 years for a life span of 25 years (60% of equipment's lifespan).
The marginal benefit of Air to Water Heat Pump (43% Operating cost reduction) is triple the marginal cost (14% increase in project or first cost). When comparing Air to Water Heat Pump to Geothermal Heat Pump, the gap between marginal cost and marginal benefit is larger. Geothermal Heat Pump has a much higher marginal cost (65% additional cost Vs Base scenario and 44% Vs Air to Water Heat Pump Scenario) and a much relatively lower marginal benefit (52% Operating cost reduction Vs base scenario and 16% Operating Cost reduction Vs Air to Water Heat Pump Scenario).
When Taking into account the lower life cycle cost of Air to Water Heat Pump Scenario compared to the Geothermal Scenario, Air to Water Heat Pumps for small residential projects make more sense since it falls on the peak of the marginal benefit Vs marginal cost curve.
The three Scenarios: Conventional Air to Air Heat Pump (System 1), Air to Water Heat Pump (System2) and Geothermal Liquid to Water Heat Pump (System 3) in the
higher end
utility rates provinces/states
The above Energy Simulation was redone for the same residential home, in the Maritime (Sydney in Nova Scotia) where electricity rates are on the higher end (around 18 cents for every KWh) and homeowners in these provinces have no access to cheap natural gas (such as in Ontario or in Alberta). Results are a bit different since climatic design conditions are milder than central Canada, however percentages for savings and marginal benefits Vs marginal cost are very close to previous analysis.
In order not to make this blog very long for readers, we will only show in the below section analysis results. We will not show detailed results as in the above section (since trend and conclusions are very similar)
Energy Analysis Summary for States/Provinces with higher end utility rates (Such as the Maritimes)
As we can see in the above analysis that Base Scenario (System 1) has the cheapest project cost (Called First cost above), however it has the peak energy cost and maintenance cost (around 5,267.00 CAD$).
System No 2 (Air to Water Heat Pump Scenario) has a 14% higher first cost then System No 1, however it offers a 40% reduction in operating cost (energy and maintenance cost). The payback for System No 2 (assuming that System No 1 is the base scenario) is 3-4 years for a life span of 20 years (35% of equipment's life span).
Geothermal Heat Pump scenario (System No 3) has a first cost 65% higher than the one of system No 1 (due to the cost of Ground Heat Exchanger) , however it offers a 50% reduction in operating cost. The payback for System No 3 (assuming that System No 1 is the base scenario) is 14 years for a life span of 25 years (68% of equipment's lifespan). Payback for geothermal is longer in the maritime, since ground thermal conductivity in the eastern part of Canada is lower than the central part and extract the same amount of energy from the ground we require a larger ground heat exchanger.
The marginal benefit of Air to Water Heat Pump (40% Operating cost reduction) is close to the marginal cost (14% increase in project or first cost). When comparing Air to Water Heat Pump to Geothermal Heat Pump, the gap between marginal cost and marginal benefit is larger. Geothermal Heat Pump has a much higher marginal cost (65% additional cost Vs Base scenario and 35% Vs Air to Water Heat Pump Scenario) and a much relatively lower marginal benefit (52% Operating cost reduction Vs base scenario and 17.7% Operating Cost reduction Vs Air to Water Heat Pump Scenario).
When Taking into account the lower life cycle cost of Air to Water Heat Pump Scenario compared to the Geothermal Scenario, Air to Water Heat Pumps for small residential projects make more sense since it falls on the peak of the marginal benefit Vs marginal cost curve.