Analyzing a ground source heat pump investment in Finland

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School of Economics | Master's thesis
SME Business Management
Yrittäjyys ja pienyritysten johtaminen
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AALTO UNIVERSITY SCHOOL OF ECONOMICS ABSTRACT Master’s Thesis, Entrepreneurship 19.12.2011 Tom Stenberg ANALYZING A GROUND SOURCE HEAT PUMP INVESTMENT IN FINLAND Research objectives The main objective of the study was to analyze a ground source heat pump (GSHP) investment in Finland. In addition the goal was to determine which investment appraisal methods are most suitable for analyzing a ground source heat pump investment. In order to reach these objectives the both the heating systems and investment theory were reviewed in detail. Sources The theoretical part of the study was compiled out of a wide range of academic and non-academic literature. These included articles, reports and industry brochures related to investment analysis, energy and heating systems. In the empirical part historical energy price data was used. Heating system data was attained from heating system companies, expert organization and other relevant sources. Research method After the necessary data collection exercise and selection the suitable investment analysis method, the actual investment simulations calculations were completed and analyzed. The chosen methods are widely used and considered reliable in academic research. Results Analysis of the results showed that investing in a ground source heat pump heating system would be the most economical investment in the cases studied and under the selected settings. After 10 years the GSHP had the lowest NPV (most economical) in all cases except for one; in the old 240 m2 building the wood-pellet had a lower NVP mean in the 10 year scenario. However the probability distributions of the GSHP and the wood-pellet system suggest that the GSHP system has less risk as the probability distribution is more triangular. The wood-pellet system and the CHP district heating systems were the next economical choices. Direct electricity and oil heating were found to be uneconomical investment when using similar risk variables. Keywords Ground source heat pump, heating system, energy, investment analysis, NPV, Monte Carlo simulation.
Ground source heat pump, heating system, energy, investment analysis, NPV, Monte Carlo simulation.
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