Economic performance of ground source heat pump: does it pay off? Laura Gabrielli 1,* , Michele Bottarelli 2 1 University of Ferrara, Italy 2 University of Ferrara, Italy * Corresponding author. Tel: +39 0532 293671, E-mail: laura.gabrielli@unife.it Abstract: A DCF model (discounted cash flow model) is implemented in order to investigate the economic aspects of GSHP (ground source heat pump) for heating and cooling, in comparison to traditional CB (condensing boiler). The DCF model allows the analysis of investment costs, operating costs and revenues of the two different systems in order to understand if the GSHP outperform its conventional counterpart in coming years, explicitly taking account for factors as price/cost growth. The whole analysis is performed adopting a parametric approach, in which all the previous terms are linked to energy labels, degree-days and EMRs (Energy Mix Ratios), the latter obtained as ratio between the full unit cost of electricity and natural gas paid by the householder. Relating to different EMRs, the DPBPs (Discounted Pay Back Periods) are presented in decision support matrixes in which energy labels and degree-days are the row/column variables, to confront the benefits of choosing between GSHP versus CB. Some considerations are also presented in order to express the environmental aspects. The results show that all higher energy labels have a good profitability ratio between costs and payback periods and demonstrate that GSHP system does pay off. Lower labels become interesting when the EMR drops to 0,25 and the gas price goes up 0,70 €/Nm 3 . Keywords: ground source heat pump, discounted cash flow models, energy mix ratio, decision support matrixes 1. Introduction Heat pumps (HPs) are a reliable technology for space heating and cooling in commercial, industrial and residential buildings. In ground source heat pumps (GSHPs), the ground is used as heat source or sink; when compared to external air, it has smaller temperature variations during both heating and cooling season, and more advantageous thermal properties. For these reasons, GSHPs become an attractive alternative to conventional heating and cooling systems [1], owing to their higher energy utilization efficiency and reduction in greenhouse gases emission [2]. Economic evaluations were approached to exploit low temperature geothermal energy for buildings. In [3], the net present value is developed, showing a payback period of just a few years. Here, a discounted cash flow model (DFC) is implemented to assess the payback period for a GSHP application in comparison to traditional condensing boiler (CB), where the ground heat exchanger is the horizontal flat panel presented in [4]. 2. Methodology The goal is to calculate the payback period for a ground GSHP versus a CB, in connection with degree-days and energy building labels. The climate aspect and energy label are taken from the Italian law, but they can be easy extended to any other country setting different degree-days and energy requirements. To define the climate condition, a function was performed for the time series air temperature. Calibrating this function to obtain specific degree-days, it was possible to consider different climate zones. For both air conditioning systems it is supposed the same indoor distribution plant working at the same fixed low temperature (44 °C), keeping the analysis free from this part. The GSHP is supposed a vapor compression type heat pump coupled to a horizontal ground heat exchanger (Fig. 1). The CB is taken as boiler with high performance. For the GSHP, the coefficient of performance (COP) basically depends from the temperature at the evaporator, if the temperature at the condenser is taken fixed, like in this case. Anyway, the evaporator temperature is depending from the climate and the thermal behaviour of the HGHE and surrounding soil, so that this last 1329