Ground Heat, Private Residence

Fig. 1. Heat pump (Kli-
masol). The smaller box
is the heat pump and the
tall box contains a hot
water storage tank.

In this case study a ground source heat pump uses electricity and heat stored in the shallow ground to heat a private house. The ground heat comes from the sun, it is therefore renewable energy (the electricity part is not). It is supplemented with 6 square metres of solar panels.

The central piece of equipment is similar to a refrigerator with the cool side underground and the warm side indoor. It generates 2.5 times more heat than the electricity it uses; in other words 60% of the energy comes from the ground. Operation and maintenance is more or less limited to an annual check by an expert.

The operational costs are low, but the installation is expensive. It has been running since 2001, and it looks as if the payback period over an oil furnace will be less than 11 years. The expected lifetime is 15 years.

Ground source energy

Figure 2 shows the ground heat system consisting of a heat pump, ground pipes, and a storage tank. The pipes contain water with an alcohol as antifreeze (not glycol) to minimize pollution in case of a leak. The amount of liquid, and the length of the pipe, is designed to keep the house warm in most cases. A supplementary electric water heater kicks in if the weather is very cold, it covers the peak load.

Fig. 2. Ground source heat pump. The earth heats the liquid in the ground
pipe by 2-4 degrees. The heat pump transforms it into, say, 40 degrees
celsius in the indoor radiators. The solar panels supply additional heat
Spring, Summer, and Autumn.

The heat pump heats water, which is pumped through radiators and underfloor pipes to heat the house. It also provides hot water for showering and washing. The solar panels provide supplementary energy, which is stored in the tank.

The heat pump runs on electricity, so it is a form of electric heating, but it spends less electricity than direct electric heating; up to 2/3 of the energy may come from the ground.

The ground heat system replaced an old oil furnace with a poor efficiency.

Coefficient of performance, COP

A heat pump takes renewable heat from the ground, and uses it to heat the building. It comes at a price, which is the electricity spent in order to operate the heat pump. The ratio between the heat produced Qout and the power spent Qin is larger than 1, because the heat pump adds heat from the ground to its performance.

This ratio is the coefficient of performance which is abbreviated COP.

      COP = Qout / Q

Typical values for a ground source heat pump are in the range 2 - 5. It is the gain factor that we multiply on the input power to find the output power.

Example (COP). Assume a heat pump has COP = 3. Consequently it transforms 1 kilowatt of electricity (input) into 3 kW of heating (output). Out of the 3 kW output, 1 kW came from electricity, therefore 3 - 1 = 2 kW came from the ground source.

As a result, we can say that 2/3 of the produced heat comes from the ground.

Pre-Calculation Based on Sales Material

The contractor had a calculation example in the sales material, where the heat pump replaces an oil furnace in a house of 160 square metres. The investment after subsidies is 102 000 DKK (13 600 EUR), and the annual savings over an oil furnace are 8 952 DKK (1 194 EUR).

Fig. 3. Simple project balance. Based on the sales
material in 1999 prices (Arke 1999).

Figure 3 shows how the value of the investment evolves over the estimated lifetime of 15 years. The figure shows the future value relative to the time of investment at the end of year 0. The simple project balance shows a payback period of 12 years and a final surplus of 17 500 DKK (2 300 EUR).

The internal rate of return is 3.7%. In principle there will be a surplus if the project can be financed at an interest rate lower than that.

The breakeven point, where the investment is paid back, is fairly late in the project, which indicates that the surplus could be upset by small unforeseen expenses.

All in all a fairly risky investment for a household. A time horizon of 15 years is long for a private household, and equipment could break before the expected lifetime. On the other hand a houseowner may not expect to earn any surplus on the heating installation; in that case there is a margin of 2 300 EUR for unforeseen expenses.

Post-Calculation Based on Actual Numbers

The total construction cost was 131 760 DKK (17 568 EUR) in year 2000 prices. Figure 4 shows how the investment has evolved from the time of investment at the end of year 2000 up until present time.

Year 2009 is the year of breakeven of the undiscounted cash flow, that is, the actual undiscounted payback period turned out to be 9 years. The discounted payback period is one year longer.

The heat pump is still running, and if it lasts all the projected lifetime, there will be a good surplus.

Fig. 4. Simple project balance based on actual prices.
The investment was at the end of 2000.
Fig. 5. Oil prices versus electricity prices. During the
lifetime of the heatpump, oil prices have increased
more than electricity. Year 2001 prices correspond to
index 1.

Oil prices

The actual undiscounted payback period is three years earlier than estimated in the contractor's example. The reason is not that the contractor used pessimistic estimates, but rather due to increasing oil prices (Fig. 5). In fact, while the electricity price increased 17% in nine years, the price of oil increased 33%, thereby improving the savings on fuel.


Spring 2000
Initial contact to the Samso Energy and Environmental Office. They provide information material, a sales brochure with calculation examples (Arke 1999), and contact to the energy company (ARKE). The energy company is the main contractor, but they use local installers to perform the installation.

13 May 2000
Calculation of the energy demand of the house by the contractor (ARKE). Calculation of the size of the heat pump.

17 Jul 2000
Offer from the contractor. In the meantime sub-constractors have provided their prices.

17 Jul 2000
The contractor sends an application for an installation permit to the municipality. It contains engineering dimensions, a proposal for the layout of the underground piping, and a map. The municipality forwards it to the county's environmental department (off the island).

20 Jul 2000
The contractor sends an application for government subsidies to the Danish Energy Agency (Energistyrelsen) under the ministry for the environment and energy.

31 Jul 2000
The county sends a letter that there will be a one month delay in the processing of the application due to summer holidays.

4 Aug 2000
The Danish Energy Agency grants the subsidies.

15 Sep 2000
The environmental department of the county forwards a draft of their permit. It contains specifications of technology, distance requirements, test for leakages, municipal supervision duties, and a special requirement about the location of the pipes in order to maximize the distance to a water well downstream. They ask for comments.

19 Sep 2000
The environmental department of the county issues the permit, on the condition that no protests appear before 18 Oct 2010.

23 Oct 2000
Letter from the county that there were no protests within the stipulated protest period.

Nov - Dec 2000
Subcontractors dig the trenches, deliver the heat pump, deliver the solar collector and tank, mount the solar collector on the roof, and they make the plumbing and electric connections.

1 Jan 2001
The heat pump is installed and starts operating.

27 Feb 2001
The Danish Energy Agency sends a letter that the subsidy will be paid within three weeks and accounts closed.

28 Nov 2001
The house is registed as an electrically heated house to the electricity company NRGi and the national register for buildings and dwellings. There is consequently a discount on the electricity price from NRGi.

7 Dec 2002

7 Dec 2003
Service: 1125 DKK.

Expansion tank renewed: approx 1000 DKK.

6 Dec 2005

Expansion tank renewed + anode renewed: approx 3000 DKK

12 Jun 2007

Bought manual pump and liquid for solar panel: approx 1500 DKK

29 Oct 2009
Refill of IPA alcohol + service: 2880 DKK.

30 Nov 2009
Replacement of pressure valve at the top of the panels, replacement of liquid: 635 DKK.

10 Apr 2010
Solar panels unmounted and scrapped. Photovoltaic panels mounted, 26 panels at 1.5 square metres each, 39 square metres total.

4 Aug 2010
Photovoltaic panels connected to the grid, but only 9 of 26. Waiting for the correct size inverter.

16 Jan 2011
Correct inverter (SMA Sunny Boy) installed. Full capacity of the plant is 5 kW peak.


Heat pump power rating 2.5 kW electric and 7.0 kW heat
Max boiler temperature 55 C
Nominal energy consumption of the house 30 000 kWh / year
Hot water storage tank 250 litres with 3 spiral heat exchangers
Refrigerant R 407C, 1.25 kg
Heat pump height 92 cm, depth 60 cm, width 59 cm, weight 174 kg
Ground pipe dimensions 2 x 200 m Ø 40, 2*25 m Ø 50, polyethylene.
Ground pipe liquid water and alcohol (IPA: 90% ethanol, 10% isopropanol)
Liquid volume 391 litres including 98 litres IPA
Ground pipe depth 0.9 metres
Ground pipe lifetime more than 50 years
Economy (2000 prices)
Start-up year 2001
Expected lifetime 15 years
Heat pump and pipes 52 088 DKK (6 945 EUR)
Excavation of pipes 18 800 DKK (2 507 EUR)
Solar panel and tank 28 520 DKK (3 803 EUR)
Mounting panel and tank 5 500 DKK (733 EUR)
Plumber 8 000 DKK (1 067 EUR)
Electrician 8 500 DKK (1 133 EUR)
Subtotal 121 408 DKK (16 188 EUR)
Value added tax 25% 30 352 DKK (4 047 EUR)
Subtotal 151 760 DKK (20 235 EUR)
Government subsidy for heat pump -12 000 DKK (-1 600 EUR)
Government subsidy for solar panel -8 000 DKK (-1 067 EUR)
Total construction costs 131 760 DKK (17 568 EUR)
Ground heat split, including tax 107 360 DKK (14 315 EUR)
Subsidy ground heat 12 000 DKK (1 600 EUR)
Total ground heat cost 95 360 DKK (12 715 EUR)
Solar panel split, including tax 44 400 DKK (5 920 EUR)
Subsidy solar panel 8 000 DKK (1 067 EUR)
Total solar panel cost 36 400 DKK (4 853 EUR)

Created by system. Last Modification: Monday 09 March 2015 19:57:10 CET by jj.