Our calculation algorithm evaluates the optimal heating method based on the building's information.

Investment Profitability

In a typical single-family house, a geothermal heating system or an air-to-water heat pump costs around €10,000 to €30,000, but it can achieve annual savings on heating costs of up to €1,500 to €3,000.

Is this profitable? It depends on whether the building owner has the money to make the investment or the ability to obtain a loan. With a loan term of 10-15 years, it is possible that the loan servicing costs will be lower than the savings generated by the heat pump, thereby reducing annual heating costs immediately. This is highly profitable.

In apartment buildings and commercial properties, the heating share of the maintenance fee is typically around €1-2 per square meter per month, while the total maintenance fee is around €5-6 per square meter per month. The heating portion can be reduced by up to 70%, on average by about €1, by switching to geothermal heating or an air-to-water heat pump. The investment can typically be covered by a capital fee of about €0.5-1 per square meter per month, resulting in immediate savings in monthly costs.

We recommend the optimal heating method considering the lifecycle savings of the heat pump compared to the investment cost, i.e., whether the investment produces pure savings (or profit) over its lifecycle. Typically, profit starts to accumulate after about a 10-year payback period. Energy investments in buildings generally have lifespans of many decades.

How Do We Know Our Calculator Works?

Our calculations are based on the latest research on how to evaluate heat losses, heat production, and the operation of heat pumps. Our work is grounded in the research of our CEO, postdoctoral researcher Dr. Jussi Vimpari, at Aalto University's Real Estate Economics Research Institute. The energy efficiency of buildings is also regulated by technical requirements of different eras, allowing buildings of various ages to be compared to current standards.

We collaborate with numerous energy companies, engineering firms, and property management offices, and their leading engineers have found our calculations to be highly accurate models when compared to realized projects or other carefully conducted plans for energy efficiency and heat pump projects.

Building Information as the Basis for Calculation

To simplify things for our users, we estimate the building information based on open databases. This way, we can create an initial calculation for the building based solely on its address.

• For optimal heating method, the most important building characteristics are location, floor area, year of construction, current heating method, and number of occupants
• For heat losses, we use the thermal transmittance (U-value) of the building's surfaces, which are estimated based on the construction year's regulations. The areas of walls, roofs, floors, and windows are estimated based on geospatial data and the building's technical information
• For solar power, the most important information includes the estimated electricity consumption based on the building type, as well as the roof type, orientation, and possible shading.

Evaluating Heat Production and Costs

The building's heat losses determine its energy needs. About one-fifth of this is covered by heat produced by people, the sun, and electrical appliances. The rest needs to be supplied by other means – typically electricity, district heating, or oil in Finland. Often, small houses also use fireplaces or air-source heat pumps as additional heat sources.

In our calculations, we consider all heat losses and sources on an hourly basis, utilizing local weather data and local energy prices, including electricity transmission and local district heating prices.

Heat loss and production calcalations are calculated on hourly basis based on building technical details

Replacing Heat Production with a Heat Pump

Next, we assess whether it would be more beneficial to meet the building's heating needs with a heat pump instead of the current heating method. The energy used by the heat pump comes from electricity, so the original heat consumption is converted into electricity consumption. The key point here is that the amount of purchased energy decreases by the heat pump's efficiency rate, meaning the heat pump can produce the required heat with significantly less purchased energy.

The efficiency of a heat pump is based on its ability to transfer heat rather than producing it itself. Essentially, the heat pump transfers heat into the indoor air from geothermal wells drilled into the ground or from the surrounding outdoor air. Running the process requires electricity, but the amount of electricity needed is much less than the energy required for direct electric heating.

If the building previously used electric heating, the total electricity consumption decreases proportionally to the efficiency rate. Otherwise, the building's electricity consumption increases, but the need for heating, such as district heating or oil, disappears entirely. Savings are calculated by comparing the current heating energy consumption costs to the heat pump's energy consumption costs based on local energy prices, including the low and predictable maintenance costs of heat pumps.

Reducing Heat Losses

We calculate the building's heat losses assuming that the insulating structures meet current low-energy house requirements. This gives us the optimal heat consumption and heating costs, assuming that the necessary investments are made in additional insulation or new windows.

For example, compared to the regulations at the turn of the millennium, modern standard windows reduce heat losses by more than half, adding insulation to the roof by 60%, and adding insulation to the walls by 40%. The savings are even greater for older buildings.

In gabled houses, adding extra insulation is often cost-effective and very beneficial. In other cases, exterior materials and structures may need to be renewed, which is typical when adding insulation to walls. This increases costs and is often best timed with other necessary renovations. Replacing windows and doors is easier and often brings significant benefits to draftiness and sound insulation as well.

Solar Panels

Solar panels can often cover about 10-20% of annual electricity consumption, as radiation is mainly concentrated between April and September. In a typical single-family house, this results in annual savings of a few hundred euros in electricity costs.

The profitability of a solar power system is significantly influenced by the price of electricity and how much of the production is consumed on-site. The value of self-consumed electricity is the total price of electricity (electricity, transmission, and taxes), while the compensation for electricity sold to the grid is only the price of the electricity itself.

The key factor is how well the solar radiation matches electricity consumption. We calculate this using the estimated electricity consumption and local radiation data on an hourly basis. Based on this, we can estimate the appropriate size and profitability of the solar system for the building.