Individual ground source heat pumps : Can district heating compete with real estate owners' return expectations?

Kaisa Kontu, Jussi Vimpari, Petri Penttinen, Seppo Junnila

Research output: Contribution to journalArticleScientificpeer-review

31 Citations (Scopus)
218 Downloads (Pure)


Technological development has decreased costs and improved the efficiency of heat pumps (HPs). In some cases, heat produced with HPs is already less expensive compared to district heating (DH) systems that have high market shares in many European countries. This has generated a phenomenon in which old customers are leaving DH systems, and new customers are not joining DH even if it is available. The study evaluates the economic performance of alternative heating systems (DH, ground source HP with electricity, and a hybrid of these two) for new buildings in selected city in Finland: residential, office, retail and industrial. The aim of this study is to demonstrate the rationale for property owners to invest in ground source HPs. In addition, the study examines whether DH pricing can be developed to improve the competitiveness against HP systems. The results show that currently, HPs are highly profitable for all studied customer types with current DH pricing models used in selected DH company. However, with new pricing models, the competitiveness of DH improves substantially. In conclusion, we suggest that DH companies renew their pricing models to include several customers segments as well as hybrid heating customers.
Original languageEnglish
Article number101982
Number of pages11
JournalSustainable Cities and Society
Publication statusPublished - 1 Feb 2020
MoE publication typeA1 Journal article-refereed


  • District heating
  • Ground source heat pumps
  • District heating pricing
  • Customer
  • Real estate
  • Smart energy transition


Dive into the research topics of 'Individual ground source heat pumps : Can district heating compete with real estate owners' return expectations?'. Together they form a unique fingerprint.

Cite this