Profitability of Various Energy Supply Systems in Light of Their Different Energy Prices and Climate Conditions

Elaheh Jalilzadehazhari,Amir Vadiee,Georgios Pardalis

doi:10.3390/buildings10060100

Elaheh Jalilzadehazhari, Amir Vadiee + Show 1 more

Open Access

https://doi.org/10.3390/buildings10060100

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Journal: Buildings	Publication Date: May 28, 2020
Citations: 3	License type: CC BY 4.0

Affiliation: Linnaeus University, Mälardalen University

Abstract

The majority of the single-family houses in Sweden are affected by deteriorations in building envelopes as well as heating, ventilation and air conditioning systems. These dwellings are, therefore, in need of extensive renovation, which provides an excellent opportunity to install renewable energy supply systems to reduce the total energy consumption. The high investment costs of the renewable energy supply systems were previously distinguished as the main barrier in the installation of these systems in Sweden. House-owners should, therefore, compare the profitability of the energy supply systems and select the one, which will allow them to reduce their operational costs. This study analyses the profitability of a ground source heat pump, photovoltaic solar panels and an integrated ground source heat pump with a photovoltaic system, as three energy supply systems for a single-family house in Sweden. The profitability of the supply systems was analysed by calculating the payback period (PBP) and internal rate of return (IRR) for these systems. Three different energy prices, three different interest rates, and two different lifespans were considered when calculating the IRR and PBP. In addition, the profitability of the supply systems was analysed for four Swedish climate zones. The analyses of results show that the ground source heat pump system was the most profitable energy supply system since it provided a short PBP and high IRR in all climate zones when compared with the other energy supply systems. Additionally, results show that increasing the energy price improved the profitability of the supply systems in all climate zones.

Highlights

The energy renovation of single-family houses remains a challenging task throughout Europe due to threats posed by climate change on different regions’ environments and economies
Three different energy prices, three different interest rates and two different lifespans were considered when calculating the internal rate of return (IRR) and payback period (PBP). Any such approach allows one to analyse how simultaneous changes in energy prices, interest rates, climate conditions and lifespan affect the cost-effectiveness of energy supply systems
One of the reasons explaining this low renovation rate is the high investment costs required for installing renewable energy supply systems that pose a great challenge to house owners

Summary

Introduction

The energy renovation of single-family houses remains a challenging task throughout Europe due to threats posed by climate change on different regions’ environments and economies. To achieve the European parliament’s target for 40% energy efficiency by 2030, the renovation rate should increase to about 2.5% to 3% of the housing stock per year [1]. Sweden set a more ambitious target of 50% more efficient energy use by 2030, compared to the levels from the reference year 1995 [2], the renovation rate in this country was about. 0.8% per year in 2016 [1] At this point, the Swedish residential sector could be a major contributor to achieving the national target for reduction in energy use, since it is responsible for 22% of the country’s total energy consumption, from which 12% comes from single-family houses [3].

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