It’s well understood that Heat Pump (HP) systems are energy efficiency systems, when considering the replacement of gas fired heating systems with the global push to electrification of building systems, to reduce fossil fuels & GHG to improve our environment. What needs to be understood is the construction cost implications and the barriers related to these types of retrofits.
Barriers to consider for Multi-unit residential buildings (MURBs) can be summed up as follows;
Insufficient spare electrical capacity in many existing buildings. Electrical upgrades may be required to bring more power from the utility to the building.
HP retrofit business cases for MURBs are frequently unattractive. This is due to higher installation costs of these technologies to conventional gas fired equipment. Moreover, low gas prices and comparably higher electricity prices mean that energy cost savings from fuel switching technologies are often not significant. Which translates to higher payback periods to recover capital investment (ie, 16 plus years).
HP’s add cooling capacity charges to the building’s utility bill. The positive side is that tenants have a cooled building in the spring and summer season. This added capacity load charge needs to be considered for the capital investment payback calculations and the utility budget increases.
For building owners that are considering replacing electric baseboard heating to a HP system. Building owners will need to add maintenance costs to the yearly operating budget (estimate $100+/suite/ year). As well, the energy cost savings difference between a controlled Smart IOT platform of an electric baseboard heating system versus a HP system is approximately 5%, without 5X’s the capital investment cost of a HP system installation. For a Smart IOT platform heating control system, the capital investment paybacks are in the 3 year range with savings of 25% to 30%.
To have high returns from a HP installation in terms of energy saving of 35% to 40%, it is important to have a well-insulated building. Most MURBs were built over 50 years ago and they require building upgrades to insulation and windows.
The HP installation is intrusive to building tenants. HP installations can take a full year of tenant disruption and project commissioning deficiencies can last another 6 months. In addition, HP systems can be somewhat noisy.
Most air source heat pumps in extreme cold weather conditions require backup electric resistance heat. HP’s lose efficiency below 0°C, meaning they have to rely on a secondary source of heat.
For further information regarding HP installations or control system alternatives please contact us.