Air source heat pump (ASHP) for domestic hot water (DHW) preparation under cold climatic conditions is studied by TRNSYS simulation. Emphases are focused on comparing different strategies of installation using energy efficiency performance criteria. Studied strategies include individual (apartment-scale) and collective (building-scale, centralized) installations. Different daily hot water consumption profiles are considered in the annual simulation program. Simulation results show higher annual system efficiency from individual installations than centralized system. In the latter case, pump consumption during hot water recirculation makes the overall system less efficient. Due to lower over-sizing factor, the centralized installation is more favourable to the ASHP performance than individual ones. In both the two cases, GHG emissions can be significantly reduced by 7 thanks to ASHP. This paper provides decision-making information regarding energy efficiency incentive policies of heat pumps for a more sustainable energy supply. (C) 2018 Elsevier Ltd. All rights reserved.