1. Electric resistance hot water: ₱12.50/kWh delivered.
2. Diesel boiler at current pricing: ₱7.20/kWh delivered.
3. LPG boiler: ₱6.00/kWh delivered.
4. Karnot iHEAT R290 on grid: ₱2.70/kWh delivered — quarter of electric resistance, ~40% of diesel.
5. Karnot iHEAT R290 with iVOLT solar: ₱0.50/kWh delivered. The cheapest hot water in the Philippines is also the cleanest.
Cost per kWh of useful heat, all technologies, today's prices
What this means for payback
For a typical 100 kW thermal load running 16 hours/day, 6 days/week — a mid-size hotel laundry, food manufacturer, hospital DHW or bakery proofing duty — the annual operating cost picture is dramatic:
Net annual saving switching from a diesel boiler to grid-powered Karnot iHEAT: ~₱3.1M/year. With iVOLT solar in front: ~₱4.7M/year. Per-facility heat-pump retrofit capex typically ₱4–8M (sized to load); per-facility payback at current prices: 12–18 months. Under the Hormuz Scenario 2 fuel-price model (diesel ₱120–145/L sustained), payback drops to 8–12 months. Paired with rooftop solar, sub-12-month payback is achievable on most industrial sites — see our 21-mile problem piece for the full sensitivity.
The mistake to avoid: switching imported fuels
Most retrofit conversations in 2026 start with a CFO asking "should we switch from LPG to diesel?" or "should we buy bigger LPG storage?" Both are the wrong question. All three of LPG, diesel and fuel oil come through the Strait of Hormuz — directly or via the Asian refineries that themselves source from the Gulf. The peso-denominated cost of every imported fuel moves together. Switching fuels costs you the engineering rework (new burners, gas trains, regulators, combustion-tuning) without removing the Hormuz exposure.
The only retrofit that genuinely removes Hormuz exposure from your facility is electrification. The choice is:
- Heat pump on grid electricity — exposure to Meralco rates, but no exposure to imported fuel logistics. Meralco does have coal exposure on the generation side (~62% of PH electricity), but coal supply diversification is structurally easier than refined-product diversification.
- Heat pump on rooftop solar + storage — near-zero exposure to either imported fuels or Meralco generation charges. The daytime operating cost approaches zero. This is the only configuration that produces single-digit-month payback under sustained crisis pricing.
The cheapest hot water in the Philippines is also the cleanest. Those two things are no longer in tension.
The four mistakes to avoid in a heat-pump retrofit
- Switching from one imported fuel to another. LPG → diesel and diesel → fuel oil don't solve the structural problem. Skip the lateral move.
- Oversizing the heat pump to peak boiler capacity. Real industrial heat loads have a profile. Properly sized heat pumps run at 70–90% duty most of the year, with peak handled by a smaller buffer or retained boiler in standby. Oversizing destroys the payback math.
- Ignoring temperature lift. R290 fits up to 90 °C delivery brilliantly; for 110 °C+ saturated steam you need a cascade or supplementary generator. Specify to your real process curve, not to a vendor's preferred SKU.
- Treating solar as a separate project. A heat-pump retrofit without rooftop solar is half a project — the fuel exposure you removed at the boiler input is replaced with grid-electricity exposure. Treat them as one decision.
Want this run on your actual numbers?
Book a free site survey. We model your thermal load, pull 12 months of utility data, and come back with a side-by-side payback for grid-iHEAT vs solar-iHEAT against your current fuel — no commitment.
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