Energy | Geothermal heat can increase the price of a single-family house significantly, the return on energy renovation depends on the location of the house

Geothermal heat pump increases the selling price of a single-family house by about 5.3 percent, according to a recent study by Aalto University.

Switching to geothermal heat requires a relatively large investment, up to tens of thousands of euros, the profitability of which depends on the location of the house in Finland.

Especially in Helsinki, houses are more expensive than in the rest of the country. In the capital region, the increase in the selling price of a house can completely cover the investment in a geothermal heat pump.

In the rest of Finland, turning the investment into a plus requires several years of energy savings in addition to an increase in the selling price. So you have to own the house longer so that the geothermal heat pump pays for itself in the event of a sale.

“If the owner of a single-family house is thinking about doing an energy renovation, of course he thinks about how well, for example, a 20,000-euro geothermal system will pay for itself,” says the author of the study, Visiting Researcher at Aalto University Jussi Vimpari.

“On an annual basis, energy costs decrease, but if the house needs to be sold earlier for one reason or another, it’s good to know if you can get the price of the investment back.”

Vimpari works as a researcher on the side. He has founded a company that produces data and analytics related to energy renovations for, for example, property owners and energy companies.

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Last year, geothermal heat pumps were sold in Finland by about a fifth more than the previous year.

Vimparin the peer-reviewed research article written on the subject has been published in Energy Efficiency magazine. In the study, Vimpari looked at house sales made between 1999 and 2018 and compared the prices according to whether the house had geothermal heat or another form of energy.

Building societies that use, for example, district heating can also switch to geothermal heating, but this study did not deal with apartment buildings.

Vimpar’s comparison is therefore from the period before the war of aggression started by Russia and the energy crisis. Now the energy efficiency of houses has become a bigger selling point than before.

The popularity of heat pumps has only grown. Last year, geothermal heat pumps were sold in Finland by about a fifth more than the previous year, a total of 12,000 units. Geothermal heat is so popular that project approvals are even backlogged.

The influence of the ground source heat pump on the development of the selling price of the house can therefore be bigger than in the past.

“It would be interesting to do the same research again in a couple of years. I would imagine that the premium would be higher simply due to the fact that the cost of heating has increased so much, and that would be reflected in the price.”

The real estate world said last fall that the heat from the ground has become private houses by far the best selling point.

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“It matters how much you can save in energy.”

Geothermal system the price depends, among other things, on the size and location of the house. Its implementation is more affordable for a new building, so when building a new house, it is worth considering the energy system properly.

Recently, according to Vimpar, the prices of heat pumps have been on the rise because demand is strong. You can get a geothermal heating system for a small house at the cheapest price of around 15,000 euros.

“It’s a decent investment, but on the other hand, if it reduces costs by several tons per year, it’s a really sensible investment.”

The profitability of a geothermal investment is also influenced by which heating system the building currently has and how much the building is worth in general.

“It matters how much you can save in energy and how much the energy system can be seen as an increase in the value of the building in a commercial situation.”

At the same time, energy renovation can significantly reduce housing emissions. Buildings generate around 28 percent of the world’s energy-related emissions. Up to a fifth of a Finn’s emissions come from heating the home. The heat pump can Vimparin according to a study I wrote earlier reduces heating carbon dioxide emissions by more than 80 percent.

Private houses prices vary greatly from region to region in Finland. However, the costs of switching to geothermal heat are very similar regardless of location.

Geothermal you can get support from the state for moving. Housing companies’ Ara support is often about a quarter of the investment, and you can also get a household deduction for energy renovation.

Vimpari is of the opinion that it should be possible to target subsidies better than at present where investments do not pay for themselves as easily as elsewhere, in this case, for example, in Helsinki.

“I think that in Lauttasaari these investments would be made even without that support, while in some areas, making these investments is more difficult for various reasons. Support should be directed to these areas.”