The costs of getting the home cozy

What do households in Europe pay for heating their homes? How urgent is retrofitting of old buildings – from an economic point of view?

The answer depends on two things: the energy price and the climate. Energy prices differ – according to energy carrier, usage, technology, and price system. Also, households in Europe use very different heating systems. How to compare them?

This project attempts to solve this problem. It calculates and publishes comprehensive heating energy cost data. This is done on the basis of a “representative heater” using a mix of fuels.┬áThis mix is representative for the national mix of heating systems in the respective country.

Currently, all data refer to the year 2016 on average for a standard household with standard consumption characteristics.

Also, it is based on a marginal unit of energy consumed. Therefore, it does not include capital (“sunk”) costs already spent.

It is an ongoing project, updated from time to time. Currently, 15 European countries are included.

Heating Energy Cost Comparison

The values represent effective heating cost prices, measured in Cents per kilowatt-hour, or kWh. They include all typical taxes that accrue for households. As heating energy is used in different carriers or fuels, a “representative kWh” is constructed, for which an artificial (weighted average) price is calculated.

This is being done by adding up the prices for the different energy types in Cents per kWh, weighted by the heating technology basket in the respective country. This basket differs completely from country to country, as well as the prices for these energy carriers.

Some background on some countries:

Germany Austria Denmark

As no standard official source or common methodology exists, the data are collected from the best available statistics sources, such as Eurostat or national statistics authorities, as well as several semi-official sites. The research on the “heating basket” is a central part of the project. See here, if you want to know more about calculation of prices per kWh.

In most countries, the price for district heat or natural gas is most important for the average heating price. See more on this here.

Heating Cost Pain

  • How important is it to invest in energy efficiency of your home?
  • How urgent are insulation, good windows, efficient heating technologies?

The answer is: It depends – it depends fundamentally on two things: climate and heating costs per unit of energy.

High energy costs alone would not automatically require high efficiency (insulation) standards – in a mediterranean environment, e.g. Vice versa, in a nordic or continental climate with cold winters, the rationale of efficiency investments also depends on heating energy prices. It’s both combined: climate and energy costs. You have to consider both in combination, if you want to know wether and to which extent insulation and energy efficiency investments make sense.

This is done here. with the Heating Cost Pain Index. This index tells you something about the need of thinking about energy saving and efficiency. It shows you in general, how urgent is renovation and energy efficiency in your country. Regions with similar values should (from an economic point of view) have similar standards in energy efficiency. It makes sense to compare your country to others with similar values that might have a longer tradition in building standards. If you want to know more about how this index is built, read here.

This index has a high significance. Basically, energy efficiency standards should be proportional to the index value. The higher the index value, the higher the relevance of energy efficiency!