Techno-economic analysis of residential building heating strategies for cost-effective upgrades in European cities

The energy crisis in Europe requires cost-effective evaluations of residential heating strategies to reduce costs and mitigate greenhouse gas emissions. This research studied different heating systems in China and Europe. Based on heating energy surveys, simulation models were developed and further expanded for European cities. Monte Carlo analyses were conducted to understand the heating demand and utility costs in Rome, Madrid, and Athens. The sensitivity analysis found that electrifying heating systems with heat pumps can reduce household heating costs and mitigate European cities’ dependence on natural gas. However, the high upfront investment may hinder the cost-effective deployment of high-performance heat pump systems. Building envelope retrofits can also provide plausible energy savings despite relatively long payback periods. Financial incentive analyses were conducted to quantify how fiscal measures can improve technologies’ techno-economic performance. Finally, the paper provided policy recommendations on future building cost-effective retrofits and heating electrification in Europe.