– Switching to ground source heat pumps would improve Finland’s trade balance by 260 million euros
A switch from oil and electric heating to ground source heat pumps would reduce household heating costs by 2.3 billion euros in the next 20 years. A study by The Finnish Heat Pump Association (SULPU) and Gaia Consulting looks at the economic and environmental impacts of 320,000 Finnish households switching to heat pumps.
”The market has known for long time that it is cost-effective to switch to ground source heat pumps. The Finnish Government could speed up the spread of ground source heat pumps by removing the low excise tax class for household heating oil. Sweden abolished similar tax benefits from oil heating already 20 years ago. Now almost all Swedish oil boilers have been replaced with ground heat pumps,” says The Finnish Heat Pump Association’s Managing Director Jussi Hirvonen.
Figure. Impact of switching to ground source heat pumps on household heating costs (current and after the switch) and impact on central government finances during a period of 20 years.
The switch would generate additional tax revenue to the Finnish state from higher oil heating tax and from the additional value added tax of ground source heat pump installations. The net effect for the Finnish State, including household subsidies, would amount to one billion euros over the next 20 years. Other tax implications to the Finnish State and municipalities are minor.
The study has taken into account the economic and employment impacts of reduced oil use to the oil distribution sector, and the impacts of changes in the use and maintenance of heating systems. The switch to ground heating pumps would create 1,500 new jobs and improve the trade balance of Finland by 260 million euros. Reducing oil heating would also reduce greenhouse gases by 1.6 MtnCO2-eqv. This reduction equals 5 percent of Finland’s non-EU ETS emission reduction target for 2020.
“Oil heating has for long been popular in Finland. However, the use of fossil fuels needs to be reduced in all sectors if climate change mitigation is taken seriously,” says Business Director Iivo Vehviläinen from Gaia.
- Jussi Hirvonen, Managing Director, The Finnish Heat Pump Association, tel. +358 50 500 2751, email: email@example.com
- Iivo Vehviläinen, Business Director, Gaia Consulting, tel. +358 50 345 3705, email: firstname.lastname@example.org