A new heating system: the key points

Replacing an oil or gas heating system saves heating costs and protects the environment. The type of replacement for a fossil fuel heating system depends on various factors. Both structural requirements and cost factors must be taken into account. Whether you’re replacing an oil or a gas heating system, you’ll find everything you need to know in the article.

Modern heating systems based on renewable energy sources are a sensible alternative to oil and gas heating systems. The following options are available:

When replacing a heating system various costs are incurred. These depend on a variety of factors, including the type of heating system, the amount of conversion work required and the choice of energy source.

Costs of oil or gas heating systems

Based on current prices, it costs up to CHF 20,000 to replace an existing oil-fired system with a new one in a single-family home. However, you’ll need deeper pockets if you want to switch to a renewable heating system. For an average single-family home the costs of switching to a heat pump start at around CHF 30,000, rising to around CHF 60,000 if you opt for a geothermal heat pump. The reason for the high costs is, among other things, time-consuming work such as boreholes for the geothermal probe, or the cost of obtaining the permits required for drilling. Access to heat sources is an important cost factor for heat pumps.

It’s clear that it is not always easy to estimate costs. These depend on the individual situation and on the suitability of the terrain.

Investing in a new heating system is financially worthwhile if the higher installation costs can be amortized by the lower operating costs during the expected service life. The operating costs of heat pumps are much lower than those of oil or gas heating systems. If the house is well insulated and the system is optimally adjusted, electricity and operation cost at most a few hundred francs per year. Heat pumps with geothermal probes (or air-to-water heat pumps) also require minimal service and maintenance.

UBS economists are in no doubt: In almost all cases, replacing an older oil heating system pays for itself within 10 to 15 years. Financially speaking, a conversion is especially worthwhile if the existing oil heating system has already reached the end of its service life, and the building costs a lot to heat due to poor insulation. If there is a carbon tax hike on fossil fuels in the medium term, the conversion will have paid for itself in less than ten years. If the homeowner received a subsidy of CHF 10,000, the payback period would be even shorter. In the best-case scenario, if the existing heating system has already been written off, the estimated payback period would only be five years.

Gas heating systems are generally quite easy to install and use. In residential buildings with good thermal insulation, gas heating is relatively inexpensive to run. “From a cost perspective, this makes a heat pump harder to justify,” the UBS economists point out. The decision would be easier if the old system had to be replaced anyway and the building was poorly insulated. Here too, return on investment will be much faster if state subsidies are available.

Are there subsidies or financial aid for switching to environmentally friendly heating systems?

Subsidies are available for those wishing to install a heating system that uses renewable energy. There are various options here. One important federal and cantonal program is the building program. The cantons supplement the subsidies from the program with their own budgets. You can find other programs available to you where you live at energiefranken.ch (German, French and Italian only). It is important to apply for subsidies before you start any construction work.

In Switzerland, there is currently no obligation to replace a fossil heating system. However, property owners often have to comply with the cantons’ current model regulations in the energy sector (MuKEn). This is a federal guideline aimed at harmonizing the energy regulations of the cantons. Whether and how exactly the cantons implement these is up to them. In the cantons of Basel-Stadt, Glarus and Neuchâtel, for example, the use of fossil heating systems when renovating is prohibited.

Currently, around 60 percent of single-family homes and 70 percent of apartment buildings in Switzerland are still heated with fossil fuels and there are many reasons for this. In new buildings, these new systems can be integrated more easily and more cost-effectively. In the case of old buildings, on the other hand, the structural conditions are often more difficult and thus the possibilities are limited. Or there is a lack of long-term planning and capital. Some owners are put off by the fact that a change of energy source is associated with a considerable initial investment and wonder whether a sustainable renovation makes financial sense?

The time taken to replace an old heating system will vary depending on the type of replacement or the existing structural conditions. For example, replacing an oil heating system with a heat pump usually takes a few weeks. The same applies when switching to a solar-powered heating system. However, in most cases, replacement involves more than just the actual installation work. Various preparatory work and permits also take time and can take several months from the initial considerations to commissioning.

Investments in heating with renewable energy are fully tax-deductible in all cantons. If you do not have the liquidity for a sustainable renovation, you should consider increasing your mortgage. This also makes economic sense because in most cases the savings achieved in terms of property running costs will be higher than the additional costs for mortgage interest.

There are currently a lot of changes taking place around the topics of energy, real estate and investments. There is already a tendency for energy efficiency and the heating system to influence the resalability of real estate. Buildings that have already been retrofitted and comply with energy regulations will perform better in terms of market value than unrenovated properties. There is also a discussion about whether the energy balance could affect the risk assessment and the conditions in the mortgage sector in a few years’ time.

Fossil fuel heating systems generate unnecessarily high operating costs. Well-insulated homes that heat with gas are relatively energy-efficient. However, subsidies and tax benefits mean that in many cases the installation of a heat pump can still be beneficial. If you install or modernize systems that run on fossil fuels, there is a risk that you won’t be able to use them for their full service life.