Low operating cost, comfort, sustainability, and environmental footprint are the key elements of robust space heating (SH) system. In quest for higher efficiencies, it is not always possible to meet all of these demands where environmental footprint often gets secondary attention. This paper presents a novel SH system which is capable of meeting all of the aforementioned elements while simultaneously proving SH and domestic hot water (DHW). The system comprises a geothermal sourced heat pump (HP) featuring “hot gas water” (HGW) technology which delivers higher efficiency. This paper gives a thorough thermodynamic assessment of the system covering component based first and second law analysis and provides test results based on two case studies at a house (W10/W35) and a renovated building (W10/W45). The results show that a theoretical efficiency gain by 11.02% is achievable where the source temperature is 10 °C and the water temperature for floor heating is 35 °C. For the same system, with the same source temperature but with a supply temperature of 45 °C for SH, an efficiency gain of 17.91% is achievable. From experimental testing of the system using the test stand at GeoTherma, 4.73% efficiency gain with water temperature of 35 °C and 3.59% efficiency gain with water temperature of 45 °C were obtained. Economic analysis results showed that savings of up to 10% on an annual basis is possible with HGW technology installed in an average family house, whereas it gets 4.36% for a small hotel with a payback time period of about 9 yrs.

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