ᐅ District Heating: Contract Duration for Heat Supply – 10 or 20 Years?
Created on: 15 Jul 2024 00:36
M
mman182
Hello everyone,
We have purchased a new row house, which is heated via district heating. Now we have the option to choose between a 10-year and a 20-year contract period with the heat supplier. The only difference is in the basic fee. Since we have no experience with this topic, I wanted to ask for your advice.
The primary energy factor is 0.39fp, with 55% renewable heat, 35% combined heat and power (CHP), and 10% peak load (natural gas).
For 10 years, the basic fee is €107.64 gross per month, and for 20 years it is €61.51.
What would you do?
Best regards
We have purchased a new row house, which is heated via district heating. Now we have the option to choose between a 10-year and a 20-year contract period with the heat supplier. The only difference is in the basic fee. Since we have no experience with this topic, I wanted to ask for your advice.
The primary energy factor is 0.39fp, with 55% renewable heat, 35% combined heat and power (CHP), and 10% peak load (natural gas).
For 10 years, the basic fee is €107.64 gross per month, and for 20 years it is €61.51.
What would you do?
Best regards
Tolentino schrieb:
What would happen if you don’t sign the contract and go straight to a heat pump? Or are you already committed to it in the purchase agreement? Unfortunately, we are already committed. More precisely, for 20 years, but there has now been an adjustment to § 32 paragraph 1 AVBFernwärmeV which caps the contract term at 10 years. Currently, there is an ongoing discussion about whether it might be possible to terminate the 20-year contract after 10 years. Their lawyers believe this is possible... yeah. 😀
N
nordanney15 Jul 2024 15:33mman182 schrieb:
Unfortunately, we have already committed to it. More precisely, for 20 years, but there has now been an adjustment to § 32 paragraph 1 AVBFernwärmeV that caps the contract duration at 10 years. That's right! That would be a nice loophole for termination.It would probably be more worthwhile to choose the 20-year option if the labor cost is reasonable. Over 20 years, you only pay about €1,500 more, but you get 10 additional years of service. Those extra 10 years are mandatory, if I have read correctly.
For the saved €1,500, no heat pump is installed. In the end, everything largely depends on the labor cost. With a heat pump having a COP of 5 (which should be achievable in 10 years) and an electricity price of €0.30 per kWh, the cost comes to just under €0.06 per kWh (6 cents). Whether electricity from renewables will become cheaper in the future is anyone’s guess.
However, if district heating also costs around €0.06 to €0.08 per kWh (6 to 8 cents), it is probably cheaper in the long run.
Edit: Additionally, the lifetime of a heat pump is estimated at about 20 years. If you pay around €10,000 for it, then 10 years of heating cost would mean €5,000 in base costs in this case. Even if it lasts 30 years, that's just under €3,000. From a purely economic perspective, €1,500 for 10 years is a good deal.
For the saved €1,500, no heat pump is installed. In the end, everything largely depends on the labor cost. With a heat pump having a COP of 5 (which should be achievable in 10 years) and an electricity price of €0.30 per kWh, the cost comes to just under €0.06 per kWh (6 cents). Whether electricity from renewables will become cheaper in the future is anyone’s guess.
However, if district heating also costs around €0.06 to €0.08 per kWh (6 to 8 cents), it is probably cheaper in the long run.
Edit: Additionally, the lifetime of a heat pump is estimated at about 20 years. If you pay around €10,000 for it, then 10 years of heating cost would mean €5,000 in base costs in this case. Even if it lasts 30 years, that's just under €3,000. From a purely economic perspective, €1,500 for 10 years is a good deal.
A small addition and two questions that should be clarified regarding my calculation:
- Are the costs fixed for the full 20 years, or can they be increased? If fixed, you save a considerable amount over 20 years just through normal, moderate inflation.
- If there is an increase, there should be a special termination right allowing you to cancel by the end of the next month—how is this arranged in your case?
The basic fee is fixed, while the usage fee is variable and based on the index.
Something that occurred to me earlier (probably more understandable in a homebuilding forum):
I am 40 now, and when I need to decide on heating technology in 20 years, I will probably think that a major renovation isn’t worthwhile because the children will have moved out and the house will then be too large for us, so we will sell anyway. If we do end up living here for another 10 to 20 years, we will live with some kind of cost-saving or compromise solution.
If we install a heat pump in 10 years, it will run until I’m 70, and even if it doesn’t, the necessary renovation will already have been done and the unit can simply be replaced.
Something that occurred to me earlier (probably more understandable in a homebuilding forum):
I am 40 now, and when I need to decide on heating technology in 20 years, I will probably think that a major renovation isn’t worthwhile because the children will have moved out and the house will then be too large for us, so we will sell anyway. If we do end up living here for another 10 to 20 years, we will live with some kind of cost-saving or compromise solution.
If we install a heat pump in 10 years, it will run until I’m 70, and even if it doesn’t, the necessary renovation will already have been done and the unit can simply be replaced.
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