Costs of clean heating in China: Evidence from rural households in the Beijing-Tianjin-Hebei region

To address severe air pollution, the Chinese government plans to replace most residential coal stoves in northern China with clean heating devices by 2021. Coal stove replacement started in the “Beijing-Tianjin-Hebei (BTH)” region and is expanding throughout northern China. Removing coal stoves reduces air pollutant emissions and hence is beneficial for both air quality and public health, as well as offering greenhouse gas mitigation co-benefits. However, there is little discussion of the economic costs of various clean heating technologies. In this study, we estimate total annual costs (TAC, annualized capital costs plus annual operating costs) for rural households, across cities/counties in the BTH region, to replace their coal stoves with several prevalent clean options—air-source heat pumps with fan coils (ASHPwF), electric resistance heaters with thermal storage (RHwTS), natural gas heaters (NGH), and clean coal briquettes with improved stoves (CCIS). We find: 1) Without subsidies, CCIS have the lowest TAC of all clean options. TAC of unsubsidized CCIS approximately doubles TAC of raw coal with improved stoves (RCIS), while unsubsidized electric/gas heaters cost 3–5 times more than RCIS. Thus, it is important for governments to financially support households' replacement of their coal stoves with clean heaters to facilitate widespread adoption. 2) With subsidies, CCIS have the lowest TAC in all regions except Beijing. In Beijing, generous subsides make ASHPwF—the most energy-efficient option—have the lowest TAC. In Tianjin, TAC of subsidized ASHPwF are slightly higher than CCIS and NGH. Throughout Hebei, except for a few severely cold northern counties where gas prices are high, subsidized NGH have lower TAC than ASHPwF and RHwTS. 3) Cost competitiveness of ASHPwF increases as heat demand increases, (e.g., higher desired indoor temperatures, larger home sizes, etc.) indicating that ASHP are good options for households with larger home sizes and commercial buildings. 4) Substantial potential exists to reduce heating expenses by improving building energy efficiency particularly in severely cold regions. 5) Cost advantages of NGH vary sharply with gas prices.