More recently, the hybrid system equipped with the combination of heat pump and gas fired water heater in one device is increasingly attracting people’s attention from both the industry and academia. In this study, the hybrid system with two control strategies is presented as the alternative option for domestic hot water supply and space heating with the aim of revealing its economic benefits. For the control strategy I, the two heating sources, i.e. heat pump and gas heater, can be switched and there are only two modes: heat pump mode, and gas heater mode. While for the control strategy II, the two heating sources could be handled with the proper arrangement for the loading share. There are 3 modes under this control strategy: heat pump mode, hybrid mode, and gas heater mode. The auxiliary resistance heater is used for heat pump mode if necessary, not for the hybrid mode. Various climate conditions, water initial temperature and final temperature are investigated for the hybrid system, and different heating supply forms are compared. Regarding the domestic hot water demand of 70 L per apartment per day, the gas heater can lead to a ∼38% operation energy cost saving from electric heater, and both of the two control strategies with hybrid system can result in a ∼20% to ∼65% more operation energy cost reduction than gas heater under climate condition of −5 °C to 20 °C, with a more pronounced reduction towards hot climates. Control strategy II, as the most cost-efficient option, can achieve a ∼10% to ∼23% more energy cost saving than strategy I, especially under climate condition of 0 °C to −12 °C. In the hybrid mode with strategy II, a decrease of the final temperature, results in a better economic merit. Regarding the hourly under-flooring heating case, the control strategy II, as the best option, can lead to a ∼6% to ∼70% more hourly process energy cost saving compared with the gas heater from −15 °C to 20 °C ambient conditions. During the typical heating season with ambient (−15 °C to 7 °C), the lowest process energy cost can be achieved by control strategy II. In the same external conditions, the under-flooring heating application has a lower system operation energy process cost than the indoor radiator heating case.
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