Evaluating the Economic and Environmental Benefits of Air-to-Air Heat Pump Systems in Nordic Climates

Low global warming potential air-to-air heat pumps (AAHPs) are emerging as cost-effective and low-emission alternatives to fossil fuel heating systems in the building sector. A field-measurement-based model of an R32-based AAHP system is developed to evaluate its economic and environmental benefits compared to the electric heater and oil-fired boiler over the heating season in Nordic climate conditions. The R32-based AAHP system yields the consistently lowest heating costs and CO₂ emissions, reducing both by more than 60%. This outcome is attributed to its high energy efficiency, along with favourable electricity pricing and low-emission power generation in Norway.

Keywords: Air-to-air heat pump; Low-GWP refrigerant; Field test; Performance modelling; Economic and environmental benefits; Nordic climate applications

To mitigate carbon emissions in the building sector, fossil fuel-based heating systems are being phased out in favour of electric alternatives, such as air-to-air heat pumps (AAHPs) [1]. The use of AAHPs is also expected to offer economic benefits, as their higher efficiency enables lower energy consumption and reduced heating costs.

However, AAHP performance declines significantly in cold and humid winter conditions, such as those in Nordic climates. This is due to increased compression ratios and reduced heat exchanger effectiveness from frost accumulation. [2]. Moreover, recent refrigerant regulations have led to the replacement of conventional refrigerants with R32. It offers lower global warming potential and enhanced heat transfer performance, and is now being applied in AAHPs [3].

Therefore, it is essential to assess whether R32-based AAHPs offer genuine economic and environmental benefits under harsh outdoor winter conditions and constitute a viable electric alternative to fossil fuel-based heating systems. However, this evaluation remains limited in previous studies, particularly with respect to applications in Nordic countries [4].

In this study, an R32-based AAHP system was installed in an occupied building in Oslo, Norway, to develop a performance model based on field measurements. The modelling aimed to compare its economic and environmental performance with the electric heater and oil-fired boiler over the entire heating season under Nordic climate conditions. This study would demonstrate that the R32-based AAHP is a viable electric alternative to fossil fuel-based heating systems in Nordic countries, offering significant reductions in cost and carbon emissions.

System Description

Figure 1 illustrates the system configuration, including the installation layout within the building at the Oslo test site. The AAHP system, supplied by LG Electronics, utilizes R32 refrigerant. The outdoor unit (ODU) extracts heat from the outdoor air, while the wall-mounted indoor unit (IDU) recirculates and supplies heated air to the conditioned space. A refrigerant pipeline directly connects the ODU and IDU, allowing thermal energy transfer through the circulating refrigerant. Detailed specifications of the AAHP are listed in Table 1.

Figure 1. Schematic diagram of the R32-based AAHP system installed at the Oslo site.

Table 1. Specifications of the AAHP.

Field Measurements

The system was installed in a three-story office building near the harbour in Oslo, Norway. Additionally, an identical system was installed in a test house in Fairbanks, Alaska, to supplement data under more severe cold climate conditions. Operational data were collected from both test sites during the winter heating seasons, with the Oslo data primarily used and the Alaska data incorporated to account for extreme cold outdoor conditions.

Most operational data were recorded at two-second intervals using LG Monitoring View software. Outdoor relative humidity was not directly measured; instead, it was substituted with data from nearby observation sites [5,6]. Figure 2 presents excerpts of the outdoor dry-bulb temperature and relative humidity recorded during the field measurement period at both the Oslo and Alaska sites.

Figure 2. Excerpts of outdoor condition measurements.

The heat output from the AAHP (Q̇AAHP [W]) was calculated by multiplying the thermal capacitance of the air circulating through the IDU ((ṁ∙cp)air : ṁ [kg/s], cp [J/kg∙K]) by the modified temperature difference (ΔTmod [°C]), as shown in Equation (1). ΔTmod was calculated by subtracting a temperature correction coefficient (C [°C]) from the raw temperature difference (ΔTraw [°C]), as shown in Equation (2). ΔTrawwas defined as the temperature difference between the room temperature (Tra [°C]) and IDU refrigerant pipe temperature (ΔTpipe [°C]) as shown in Equation (3). C was calculated using ΔTraw and IDU airflow rate (V̇a [m³/min]), as shown in Equation (4), based on a correlation custom-developed by LG Electronics. This approach to heat output calculation was adopted due to the difficulty in directly measuring the IDU supply air temperature and was thoroughly validated through LG laboratory experiments.

                                                                                       (1)

                                                                                                      (2)

                                                                                                      (3)

                                                                          (4)

The input power (ṖAAHP[W]) includes the power consumed by all components, encompassing the compressor, fan, and controller. The coefficient of performance (COPAAHP [W/W]), an indicator of system energy efficiency, was derived by dividing Q̇AAHP by ṖAAHP, as shown in Equation (5).

                                                                                             (5)

Performance Modelling

To predict AAHP system performance across the full range of Nordic climate conditions, a model was developed based on field measurements from both the Oslo and Alaska sites. Subsequently, modelling for input power of both the electric heater and oil-fired boiler was conducted. Finally, heating costs and associated CO₂ emissions were modelled based on energy consumption for each system to enable economic and environmental comparisons.

Heat output, COP, and input power of AAHP

Second-order polynomial regression models were developed for Q̇AAHP and COPAAHP, using outdoor dry-bulb temperature (Toa [°C]), relative humidity (RHoa [%]), and compressor frequency (fcomp [Hz]) as input variables, yielding R-squared values of 0.8722 and 0.8871, respectively. Subsequently, ṖAAHPwas modelled by dividing the predicted Q̇AAHP by the predicted COPAAHP.

Input power of electric heater and oil-fired boiler

The input power of both the electric heater (Ṗheater [W]) and oil-fired boiler (Ṗboiler [W]) was estimated based on their respective system efficiencies, with the heat output of the AAHP system regarded as the required heating load. Ṗheater was calculated by dividing Q̇AAHP by the heater efficiency (ηheater [-]) of 1.0, as shown in Equation (6). Ṗboiler was calculated by dividing Q̇AAHP by the product of the boiler efficiency (ηboiler [-]) and boiler efficiency performance curve (BEC [-]), as shown in Equation (7). ηboiler varied between 0.7 and 0.9, and BEC was calculated based on system part-load ratio (PLR [-]) using Equation (8). These input power estimates applied solely to the heater or boiler units, with building-side distribution equipment such as fans and pumps excluded from the calculation.

                                                                                                             (6)

                                                                                                       (7)

                      (8)

Heating costs and CO₂ emissions

The heating costs of the AAHP system and electric heater were calculated by multiplying their respective seasonal heating energy consumption by the electricity price. For the electricity price, the quarterly total price of electricity and grid rent, including taxes, for Norwegian households in 2024 [7] was used, as listed in Table 2.

Table 2. Quarterly electricity price in 2024.

The heating costs of the oil-fired boiler were calculated by multiplying its seasonal heating energy consumption by the heating oil price. Two types of heating oil were used, reflecting typical Norwegian oil-firing practices: a fuel oil comparable to coloured diesel and a biofuel derived from pure rapeseed oil. The fuel oil and biofuel were priced at 15.19 and 19.00 NOK/litre, respectively, including taxes (equivalent to 1.32 and 1.65 EUR/litre based on the exchange rate as of June 2, 2025) [8].

In Norway, more than 90% of electricity has been supplied by hydropower over the past decade, with associated CO₂ emissions of 11 g CO₂-eq./kWh [9]. The Norwegian Ministry of the Environment reports CO₂ emissions of fuel oil and biofuel as 260 g CO₂-eq./kWh and 0 g CO₂-eq./kWh, respectively [10]. However, international studies suggest that biofuel may also produce CO₂ emissions when its full lifecycle is considered. Accordingly, this study adopts an alternative emission factor for biofuel of 18 g CO₂-eq./kWh, reflecting its derivation from vegetable oil [11].

Economic and Environmental Benefits in Nordic Climates

The economic and environmental benefits of the AAHP system over the Oslo heating season—January to April and October to December— were estimated using the developed models and EnergyPlus IWEC climate dataset [12]. Data points with Toa > 10°C or RHoa > 40%, accounting for 10% of the dataset, were infrequent during the Oslo heating season and lay significantly outside the field-test range; thus, they were excluded to avoid compromising prediction accuracy.

AAHP performance analysis

Figure 3 presents the predicted performance of the AAHP system under Oslo weather conditions. Overall, Toa exerts a greater influence on system performance than RHoa. The predicted Q̇AAHP and ṖAAHP tend to increase as Toa decreases, indicating rising heating demand and system operation approaching full load. Conversely, the predicted COPAAHPtends to decrease with falling Toa, due to an increased compression ratio required at lower outdoor temperatures. A seasonal performance factor is then predicted to be 3.84 over the heating season in Nordic climates.

Power consumption comparison

Figure 4 compares the predicted power consumption of the AAHP system, electric heater, and oil-fired boiler, with the boiler efficiency varied between 0.7 and 0.9. As described in the modelling section, the input power of all three systems was modelled under the same heat output condition (i.e., Q̇AAHP). However, over the entire heating season, the AAHP system consumes the least power, followed by the electric heater, while the oil-fired boilers consume the most, due to differences in system energy efficiency.

Figure 4. Comparison of predicted power consumption

Economic benefits analysis

Figure 5 presents the average heating costs for each system, categorized by outdoor dry-bulb temperature bins observed throughout the heating season. The AAHP system incurs the lowest heating costs across all temperature bins, primarily due to its high efficiency and correspondingly low energy consumption. Therefore, the AAHP system, rather than the electric heater, appears to be a more cost-effective alternative to the oil-fired boiler.

Notably, the electric heating systems, such as the AAHP system and electric heater, exhibit a particularly modest cost increase in the −20.0°C to −15.0°C bin, even the heater incurs the highest cost in the −15.0°C to −10.0°C bin. This is primarily because more than half of the occurrences in the −15.0°C to −10.0°C bin were concentrated in the first quarter—when Norwegian electricity prices peaked in 2024—whereas all occurrences in the −20.0°C to −15.0°C bin were identified in the fourth quarter.

The oil boiler incurs high heating costs due to its low efficiency combined with the high price of heating oil in Norway. Specifically, the biofuel-fired boiler consistently results in the highest costs, regardless of efficiency variations, due to the exceptionally high price of biofuel.

Figure 5. Comparison of predicted average heating costs by Toa bin.

Figure 6 presents the average cost-saving rates of the AAHP system compared to the electric heater, as well as to fuel oil- and biofuel-fired boilers with varying efficiencies, across the same temperature bins. The AAHP system reduces average heating costs by approximately 60%–80% compared to the electric heater and 70%–90% compared to oil-fired boilers across all temperature bins. In particular, it consistently achieves cost savings exceeding 80% compared to the biofuel-fired boiler. The greater cost-saving rates relative to oil-fired boilers—compared to the electric heater—result not only from differences in system efficiency but also from Norway’s distinctive energy pricing structure, marked by low electricity prices and high heating oil prices.

The cost-saving rates of the AAHP system, compared to both the electric heater and oil-fired boilers, decline with decreasing outdoor temperatures. This is because, as the outdoor temperature decreases, the AAHP system tends to consume excessive energy due to COPAAHPdegradation, as presented in Figure 3. In contrast, this effect is less pronounced for the electric heater and oil-fired boiler, whose energy efficiency remains relatively stable at low outdoor temperatures. Therefore, although the AAHP system reduces average heating costs across all outdoor temperature bins, its performance degradation at lower temperatures highlights the need for improvement.

Figure 6. Predicted average cost-saving rate of AAHP system by Toa bin.

Environmental benefits analysis

Table 3 shows the average CO₂ emissions for each system, categorized by the same outdoor dry-bulb temperature bins, with the AAHP system consistently demonstrating the lowest emissions. Table 4 presents its corresponding reduction rates compared to other systems. Notably, in contrast to the economic analysis, the biofuel-fired boiler exhibits significantly lower CO₂ emissions than the fuel oil-fired boiler, owing to the renewable and sustainable nature of biofuel. The AAHP system reduces average CO₂ emissions by more than 80% compared to oil-fired boilers—even up to nearly 100% compared to fuel oil-fired boilers—across all temperature bins. These environmental benefits surpass the economic advantages, primarily due to Norway’s clean electricity production, which is largely based on hydropower.

Table 3. Comparison of predicted average CO₂ emissions by Toa bin.

Table 4. Predicted average CO₂ emission reduction rate of AAHP system by Toa bin.

Conclusions and Future Works

This study conducted performance modelling of an R32-based air-to-air heat pump (AAHP) system based on field measurements obtained under outdoor winter conditions. The modelling aimed to evaluate its economic and environmental benefits compared to the electric heater and oil-fired boiler over the entire heating season under Nordic climate conditions.

The R32-based AAHP system incurred by far the lowest heating costs and CO₂ emissions across all outdoor conditions, reducing both by more than 60% compared to all other systems. This outcome is primarily attributed to its high energy efficiency, the favourable electricity pricing structure in Norway, and clean electricity generation predominantly based on hydropower. These findings suggest that the R32-based AAHP system, rather than the electric heater, provides a more cost-effective and environmentally sustainable alternative to fossil fuel-based heating systems for applications in Nordic countries.

Future work will conduct a comprehensive performance comparison with a commercially competitive model, addressing defrost control, heating capacity, and energy efficiency in cold and humid Nordic climates. Additionally, considering the target market of the AAHP system, its economic performance will be analyzed at the building retrofit side with respect to return on investment and payback period.

References

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