Many owners regard energy-efficiency modernisation of detached houses as expensive and financially risky. However, a new model calculation by co2online shows that if the decision is measured not solely by investment costs but by total costs over 20 years, complete renovations using climate-friendly heating systems, especially heat pumps, can on average be significantly cheaper than gas and oil heating. The non-profit consultancy co2online provides information on the findings.
The calculation is based on a typical unrenovated detached house built in 1983 with 130 square metres of living space, in which no energy-efficiency measures have been carried out during the past 20 years. Each model calculation assumes a complete energy-efficiency renovation covering the building envelope, heating system and photovoltaics. Six scenarios are compared: replacing gas and oil heating systems, and switching to an air-to-water heat pump, ground-source heat pump, district heating or pellet heating.
Why a short-term view is misleading
In public debate, heating systems are often assessed on purchase cost alone. This perspective is too narrow. What matters to owners is not simply the investment required today, but total costs across a building’s life cycle: investment, financing costs, government funding, ongoing energy costs, maintenance and changes in the property’s value.
The co2online model calculation therefore deliberately considers a 20-year period to make these effects visible.
Heat pumps clearly beat gas and oil – up to 90,000 euros cheaper over 20 years
The results show clear differences between the scenarios:
- Heating costs over 20 years are significantly lower for renewable-energy heating systems than for fossil-fuel systems. In the model, they amount to around 28,000 euros for gas heating and around 41,000 euros for oil heating, compared with approximately 13,000 to 17,000 euros for heat pumps, depending on the type.
- Although investment costs are higher for renewable-energy heating systems, government funding and lower running costs mean that total investment and energy costs are lower than for gas or oil heating.
- If maintenance costs and the average increase in the building’s value are also taken into account, the model produces an economic advantage of around 39,000 euros for air-to-water heat pumps and 48,000 euros for ground-source heat pumps, while gas and oil heating systems incur additional costs of around 31,000 and 43,000 euros respectively. In comparison, this represents an advantage of approximately 70,000 to 90,000 euros in favour of the heat pumps.
These figures do not represent a short-term financial gain, but a positive balance over the period considered, resulting for example from lower running costs and a higher property value. The complete table and its underlying assumptions are available online.
What assumptions were made?
The calculation is based on transparent and verifiable assumptions:
- Energy consumption: heating-energy consumption according to the Heating Cost Index
- Energy prices: forecast consumer prices calculated on behalf of the German Environment Agency
- Investment costs: co2online calculations based on figures from the Building Costs Information Centre, adjusted to current market conditions
- Funding: current Federal Funding for Efficient Buildings (BEG)
- Financing: interest costs taken into account
- Increase in value: average effects based on property-market data
- Maintenance: costs that would also arise without an energy-efficiency renovation
The model calculation is expressly not an individual cost-effectiveness calculation, but uses average values.
Actual developments may differ
The calculation uses energy-price forecasts and average figures. Actual developments may differ, for example because of changes in the policy framework, regional differences or individual patterns of use. The results should therefore be understood as guidance, not a guarantee.
At the same time, the calculation is fairly conservative: additional risks associated with fossil fuels are not fully represented.
Recommendation: calculate the figures for the individual building
co2online recommends that owners use the model calculation as a starting point and then perform the calculation using data for their own building. co2online’s “Modernisation Check” provides an initial personalised assessment and can serve as a sound basis for discussions with energy advisers and contractors.
Context for the current debate on the Building Energy Act
The model calculation shows that switching to renewable-energy heating systems is not fundamentally unaffordable from an economic perspective, provided that renovations are considered holistically and over the life cycle. This requires reliable funding graduated according to social criteria as well as planning certainty, because homeowners make investment decisions with a time horizon of decades. Short-term investment costs alone do not present a realistic picture of the actual financial effects.