Driving electrification: The impact of electricity pricing on heat pump adoption, EV charging, and building energy technologies

Decarbonizing the building and transport sectors requires electricity pricing designs that can effectively support the adoption of heat pumps and electric vehicles. To inform electricity pricing design, techno-economic optimization modeling can help identify which pricing structures most effectively support the economic viability of electrification across different building characteristics and modeled electric vehicle plug-in behavior over the long term. In this paper, we explore the interplay between electric vehicle plug-in behavior, building energy system investment decisions, and electricity pricing design, testing electricity tariffs with varying energy and grid components. Using a comprehensive techno-economic optimization framework, we analyze how various combinations of energy and grid charges impact heat pump adoption across six diverse Swiss residential buildings from 2025 to 2050. We incorporate three distinct electric vehicle plug-in behavior scenarios modeled from real-world travel data. Our findings reveal that time-of-use energy charges consistently lead to the highest heat pump adoption rates across all building types, outperforming both flat and hourly energy pricing structures. Among grid charges, increasing block charges generally support heating electrification more effectively than peak or volumetric charges. Building characteristics substantially affect heat pump adoption, while electric vehicle plug-in behavior has more impact on the choice of charging infrastructure. Overall, our results show the importance of coordinated electricity tariff designs that account for the diversity of building characteristics and user behaviors to enable cost-effective electrification.