What this heat pump boiler payback calculator compares
A heat pump boiler conversion cannot be judged by comparing the equipment price with one fuel bill.
A fair baseline includes the like-for-like boiler that would be installed now, its fuel, fixed charge, maintenance, future replacement, and remaining value.
The conversion alternative includes heat-pump equipment, installation, hydronic work, electrical upgrades, added demand or fixed charges, cold-weather performance, backup heat, maintenance, future replacement, and residual value.
The calculator converts twelve months of existing fuel use into useful heat, then estimates the electricity and backup fuel needed to serve the same heat demand.
It compares first-year operating cost, 10-year and 15-year present-value cost, NPV net savings, first and sustained payback, and operating-cost break-even COP and electricity rate.
Korea-based scope
The interface uses KRW and expects a Korean electricity bill or a verified project tariff input.
It does not embed a nationwide KEPCO rate because residential tiers, contract classes, demand charges, seasonal or time-of-use prices, adjustments, taxes, and the existing building load can change the marginal cost of heat-pump electricity.
International users may reuse the formulas only if every monetary input uses one consistent currency and local tariff, safety, electrical, building, and support rules are reviewed separately.
Boiler baseline
- Like-for-like boiler replacement quote today
- Twelve-month fuel use, effective price, and fixed charge
- Annual maintenance and future replacement cycle
- Linear residual value for remaining service life
Heat-pump conversion
- Equipment, installation, hydronic, electrical, and other initial cost
- Reference seasonal COP, cold COP, and backup heat
- Electricity rate, added fixed charge, and maintenance
- Confirmed support, service life, replacement, and residual value
Documents to collect before entering numbers
Results are only as reliable as the inputs.
Replace every fictional default with the same building, the same thermal scope, and written evidence.
Twelve months of fuel and electricity bills
Separate space-heating and hot-water fuel from cooking or process use where possible. Determine the electricity price that would apply to incremental heat-pump consumption, not merely the average price printed on a marketing sheet.
A like-for-like boiler replacement quote
This is the cost avoided by choosing the heat pump at the normal replacement decision. Align equipment, removal, installation, tax, commissioning, and restoration scope.
A complete heat-pump project quote
Check equipment, buffer or storage, pumps, controls, piping, emitters, electrical service, breaker and wiring work, removal, delivery, lifting, disposal, tax, and commissioning.
Capacity and COP by outdoor and supply-water temperature
A single nameplate COP does not prove performance at the project design temperature. Ask whether defrost, pumps, standby, and backup resistance heat are included.
Written support and maintenance terms
Keep support at zero until applicant, model, budget, amount, and payment conditions are confirmed. Record routine service, warranty, monitoring, call-out, and major-component replacement scope.
Design and safety come before the financial result
This tool does not calculate building heat loss, design load, flow temperature, pipe sizing, pump head, storage, emitter capacity, electrical service, breaker capacity, noise, frost protection, or gas and electrical safety.
A positive NPV is not an installation approval.
Obtain qualified site design and all applicable Korean electrical, gas, building, fire, noise, and support reviews before contracting.
From fuel bills to useful heat and electricity
Existing fuel use is first converted into annual useful heat.
The fuel quantity is multiplied by energy content per billing unit and boiler efficiency.
The result is a bill-anchored thermal demand, not a detailed engineering load calculation.
Core thermal formulas
Useful heat = fuel use × kWh per fuel unit × boiler efficiency
Heat-pump electricity = regular heat ÷ reference COP + cold heat ÷ cold COP
Backup fuel = backup useful heat ÷ boiler efficiency ÷ kWh per fuel unit
Effective COP = heat-pump useful heat ÷ heat-pump electricity
The U.S. Department of Energy FEMP definition treats COP as useful heating output divided by net work input when both use the same energy unit.
The calculator therefore uses electricity equal to useful heat divided by COP.
Actual capacity and COP can change with outdoor temperature, supply-water temperature, part load, defrost, pumps, and controls, so reference and cold-weather segments are separated.
If the installer supplies a whole-season SCOP that already represents the local cold period and auxiliary electricity, set the separate cold-weather share to zero.
If the only value is a mild-condition or rating-point COP, enter a verified cold-temperature COP and the share of heat expected in that segment.
Applying the same cold penalty in both values would double-count the loss.
Operating cost, incremental investment, and life-cycle value
First-year boiler operating cost
Fuel quantity multiplied by effective fuel price is added to the annual fuel fixed charge and boiler maintenance.
The fixed charge should represent only the amount attributable to keeping the fuel account.
First-year conversion operating cost
Heat-pump electricity, added electric fixed or demand cost, backup fuel, retained fuel fixed charge, and combined maintenance are added.
The retained fuel fixed charge applies whenever backup fuel share is above zero.
Incremental initial investment
Gross heat-pump project cost minus confirmed support gives net heat-pump initial cost.
The like-for-like boiler cost is then deducted because it is an avoided baseline investment at the same decision date.
NPV net savings
Each future energy, maintenance, and replacement cost is discounted with the same entered rate.
Boiler present-value cost minus heat-pump present-value cost is the reported NPV net saving, after terminal residual values are deducted from each alternative cost.
How future replacement and residual value work
The initial asset operates for the entered service life and is replaced at the start of the following year.
Future replacement uses the entered current-price basis escalated by the capital-cost rate, and the first subsidy is not repeated.
At each horizon, the most recently installed asset receives a linear residual value based on remaining service life.
NIST Handbook 135e2025 presents linear remaining-life allocation as a simple residual approach, but a real sale or disposal value still needs project evidence.
A practical eight-step workflow
- Build the baseline. Enter twelve-month fuel use, heat content, boiler efficiency, effective fuel price, fixed charge, maintenance, replacement quote, and service life.
- Verify performance conditions. Enter the reference COP, cold heat share, cold COP, and total backup heat share from the design and product data.
- Translate the tariff. Estimate the electricity price applicable to added heat-pump kWh and any incremental annual fixed or demand charge.
- Normalise project scope. Separate equipment, installation, hydronic or emitter work, electrical upgrades, and all other initial costs.
- Use confirmed support only. Keep subsidy at zero until amount and payment conditions are documented.
- Set one financial basis. Use consistent study period, fuel, electricity, maintenance and capital escalation, and one discount rate.
- Reconcile the first year. Check useful heat, electricity, backup fuel, effective COP, and cost composition against the bills and design.
- Stress the conclusion. Compare 10-year, 15-year, and selected NPV with sustained discounted payback and all four downside cases.
Worked fictional example
The default values are a fictional KRW planning example, not Korean market averages.
Fuel use of 1,800 units, 10kWh per unit, and 82% boiler efficiency imply 14,760kWh of useful annual heat.
With 10% backup heat, reference COP 3.2, a 25% cold share of heat-pump load, and cold COP 2, estimated heat-pump electricity is about 4,774kWh, backup fuel is 180 units, and effective COP is about 2.783.
Fictional default heat pump boiler conversion results| Metric | Fictional result | Interpretation |
|---|
| Boiler first-year operating cost | KRW 2,040,000 | Fuel, fixed charge, and maintenance |
| Heat-pump first-year operating cost | About KRW 1,579,309 | Electricity, both fixed charges, backup fuel, and maintenance |
| First-year operating saving | About KRW 460,691 | Before initial and future replacement cost |
| Incremental initial investment | KRW 6,500,000 | KRW 8.3m net heat pump less KRW 1.8m boiler |
| Sustained nominal payback | About 11.87 years | Crossover that remains recovered in nominal cash flow |
| Sustained discounted payback | About 12.80 years | Crossover after a 4% discount rate |
| 10-year NPV net savings | About KRW -972,945 | Boiler alternative remains lower cost at ten years |
| 15-year NPV net savings | About KRW 187,225 | Conversion becomes only slightly lower cost at fifteen years |
This example changes from negative NPV at ten years to a small positive value at fifteen years.
The result is therefore sensitive rather than decisive.
A higher electricity rate, lower field COP, omitted electrical work, or shorter service life could reverse it, so no decision should use the defaults without project evidence.
How to interpret the results
Positive NPV net savings
The conversion has a lower present-value cost under the entered horizon, rates, COP, service lives, replacements, and residual assumptions.
It does not establish technical suitability, safety, comfort, product quality, or guaranteed savings.
Negative first-year operating savings
The conversion costs more to operate even before recovering additional capital.
Recheck marginal electricity price, demand or fixed charge, field COP, cold share, backup heat, and retained fuel charges.
First and sustained payback differ
Cumulative savings crossed zero once and then fell below zero after a future replacement event.
Use sustained discounted payback and the annual cash-flow table for a holding-period decision.
Actual effective COP exceeds break-even COP
First-year operating cost may favour the heat pump.
The break-even metric excludes initial capital, future replacement, and residual value, so it is not the NPV break-even for the whole investment.
Why tariff and cold-weather sensitivity matter
Heat-pump economics depend on climate, required water temperature, capacity retention, defrost, part load, auxiliary electricity, and backup operation.
The electricity cost of added load can also differ from the historical average bill because a Korean residential tier or commercial demand basis may change.
The tool does not assign probabilities; it shows deterministic downside cases so the decision margin is visible.
- Electricity rate +20%: tests a higher marginal energy price without changing the fixed charge.
- Existing fuel price -20%: reduces the avoided cost that supports conversion savings.
- Reference and cold COP -20%: tests a lower field-performance outcome.
- Cold stress: raises cold and backup shares by 10 percentage points and lowers cold COP by 20%.
A conclusion is more robust when 15-year NPV stays positive in several downside rows and sustained discounted payback remains comfortably shorter than the planned holding period.
If only the base case works, request a proper hourly or bin-method load study, actual tariff modelling, and measurable performance commitments before contracting.
Quote-normalisation checklist
A lower quote may simply omit more scope.
Ask every bidder to mark each item as included, excluded, provisional, or owner-supplied.
- Model, heating capacity, capacity retention, and COP by outdoor and water temperature
- Outdoor and indoor equipment, heat exchanger, buffer storage, pumps, controls, and monitoring
- Pipe cleaning or replacement, insulation, hydraulic separation, and emitter upgrades
- Electrical service, meter, demand contract, transformer, panel, breaker, wiring, and inspection
- Retained or removed boiler, fuel-account fixed charge, and automatic backup controls
- Delivery, lifting, base, drainage, condensate, noise, vibration, removal, disposal, and finishes
- Design, permits, reports, tax, commissioning, measurement, training, warranty, and emergency service
- Support applicant, eligible model, payment timing, clawback condition, and contract outcome if unpaid
Frequently asked questions
Are COP and SCOP the same?
No. COP is a ratio at stated operating or test conditions. A seasonal metric aggregates heat and electricity across a defined climate and load profile. Confirm the climate, water temperature, defrost, pumps, standby, and backup scope behind the value.
Why does the calculator not select a gas or oil heat-content preset?
Supplier, billing unit, calorific adjustment, tax, and fixed-charge treatment can differ. A traceable result uses the unit energy content and effective variable price from the actual supplier or bill.
Can I enter the published KEPCO KRW per kWh only?
Not always. Residential tiers, commercial contract demand, seasonal or time-of-use prices, adjustments, taxes, and existing load may change the incremental cost. Estimate the effective price for added heat-pump kWh and enter added fixed cost separately.
Can I include an expected subsidy?
Keep the value at zero until applicant, model, program year, budget, amount, and payment conditions are confirmed in writing. The calculator does not determine eligibility or payment.
Does positive 15-year NPV mean that installation is approved?
No. It is a financial comparison under user-entered assumptions. A qualified review must still confirm thermal load, water temperature, capacity, hydronics, electrical service, safety, noise, support, warranty, and contract terms.
Does the model include cooling savings?
No. It models the useful heating and hot-water demand previously served by the boiler. Compare cooling systems separately under the same cooling load and tariff if cooling is part of the project.
What happens at 100% backup heat?
The heat pump serves no useful heat, so heat-pump electricity, effective COP, and operating break-even are unavailable. The input is allowed as a warning case but does not represent a heat-pump conversion.
Official method references and update boundary
- U.S. Department of Energy FEMP: COP and seasonal metric definitions, checked August 19, 2026.
- Korea Electric Power Corporation: official bill guide and bill calculator context for energy charges, fixed or demand basis, and bill components, checked August 19, 2026.
- Korea Energy Agency: the efficiency-market program page lists heat pumps among eligible equipment examples while retaining applicant, program, measurement, and selection conditions.
- NIST Handbook 135e2025, DOI 10.6028/NIST.HB.135e2025: common study basis, present value, payback context, replacement, and linear residual-value method.
These sources support method and verification boundaries only.
The calculator does not import U.S. federal efficiency thresholds or discount rates, a KEPCO tariff, a Korean support percentage, a market COP, service life, price, or escalation forecast as an official default.
Recheck tariffs, support, certification, design performance, quotes, and service-life assumptions each year, whenever the project changes, and after the first measured heating season.
Replace the example with bills, design data, and aligned quotes
Recalculate with twelve-month fuel use, outdoor- and water-temperature performance, the actual Korean tariff impact, and complete boiler and heat-pump quotes.
If the conclusion is sensitive, the next step is a site load study plus written electrical, hydronic, commissioning, performance, noise, warranty, and support terms.