This research includes the evaluation of economic feasibilities based on the Iraqi’s market cost by using three different types of central heating systems in a residential villa located in Duhok city / Iraq. It also compares between modern and conventional central heating systems. A life cycle cost analysis based on detailed heating and operation load profiles considered in this work. Initial, running and maintenance costs for three central heating systems examined for fifteen years as a working period. The used systems in this study were; modern central heating system (heat pump water heater system) and conventional central heating system (fuel oil hot water boiler system and electric hot water boiler system). Transfer function method with hourly analysis program platform (HAP4.9) used for estimation the heating loads within each zone of the project. The proposed technique of modern central heating system found to be more efficient for thermal and economic efficiencies and it uses an environmentally friendly refrigerant such as (R410A). It also works efficiently in severe cold climate with low temperature of (-20°C) in winter season. The results shows that the heat pump water heater central heating system is most efficient system, this system has provided an energy saving range up to 57.5% compared with electric hot water boiler system and 70.6% compared with fuel oil hot water boiler system.