Housing association in Lappeenranta, Finland, switched to geothermal heating

Source: Kare Lehtonen/Yle

A housing association in Lappeenranta, Finland, switched their heating system from district heating to geothermal heating half a year ago. The savings in the price of heating are 24 000 euros per year, which is a significant sum. “With this sum, we will finance the energy transition costs completely”, states Vesa Tikkanen, member of the board of the housing association. The payback time for the whole renovation will be around six years. In addition to geothermal heating, also exhaust air is recovered in the building. Next summer, an own solar panel system will start to generate power for all the systems to run.

The maintenance charge of apartments will be kept on the same level as before, however, with lower costs of heating, the funds can be retained and used for other maintenances, e.g. for facades, water and sewage systems. The chairman of the housing association, Tapio Saarelainen, says that the apartments which have been sold after the transition, have been sold for a significantly higher price than usual for Lappeenranta. “We aim to keep our apartment house in such a condition that people enjoy living here and we can call ourselves the most interesting apartment house in the region”.

This transition is not unique. Many housing associations discuss the possibility for a change from district heating and electricity bills with rising costs. Last year, 9000 new installations of geothermal heating systems were made in Finland. Every second new detached private house is heated with a geothermal heating system. In Finland, this means a total of 150 000 active geothermal heating systems nationwide.

For housing associations, there are different purchase options available. Geothermal heating can be purchased also as a service and after the service period and its payments are due, the geothermal heating system in use will change its ownership from the service provider to the housing association. With this, high investment costs at the beginning are not a barrier.

This has also wider effects for locally operated district heating systems, their profitability and business models. As the price of geothermal heating is approximately 40 euro per megawatt hour, district heating costs twice as much. District heating also needs continuous maintenance of its infrastructure. There is a tendency towards regional solutions covered by geothermal heating and also traditional energy companies are looking more into these possibilities in the future.

Find the whole article here (in Finnish).