Economics of Renewables Versus Fossil Fuels 2022–2036: Case Study of an Individual House Applying Investment Project Evaluation Methods

This paper presents a comprehensive economic comparison between renewable and fossil-fuel-based heating systems for a newly constructed residential building in Kraków, Poland, over the period 2022–2030. The analysis introduces the concept of Corrected Final Energy Consumption (CFEC) as a harmonized measure for comparing various energy sources and applies the Present Value of Total Lifecycle Cost (PVTLC) as an appropriate financial metric for non-commercial residential investments. Four heating options were examined: district heating system (DHS), gas boiler, air-to-water heat pump, and heat pump combined with photovoltaic (PV) panels. Based on real tariffs and standardized data from the Energy Performance Certificate (EPC), the DHS option demonstrated the lowest lifecycle cost, while the air-to-water heat pump—despite environmental advantages—proved the most expensive without substantial subsidies. Sensitivity analyses confirmed the strong influence of investment subsidies and fuel price fluctuations on the competitiveness of alternative systems. The findings highlight the methodological shortcomings of conventional annual-cost approaches and propose PVTLC as a more reliable decision-making tool for residential energy planning. The study also discusses regulatory, climatic, and behavioral factors affecting investment outcomes and emphasizes the need to integrate financial, environmental, and social criteria when evaluating household-level energy solutions.