Thanks for the reply.
Some more questions to help us understand your situation better:
1. Solar orientation - can't tell from your picture which way is south. See updated website pictures.https://sites.google.com/site/housesvdp/photos
2. Yard/garden on the other side? More pictures please? See updated website pictures.
3. Ground floor use. Do you plan to make the basement/ground floor into living space, or leave it unfinished? The basement/ground floor will in the middle term be a workroom for projects, a library and a laundry room. None of these need to be heated to house levels but, picking a number, around 12 C.
4. First floor means up one flight of steps, right? (In USA, first floor = ground floor) Yes, in Italy first floor is one flight up. I am not sure that logic applies here since the house is on a hill. We use 'first floor' in the Italian sense because 'first floor' clearly isn't the basement or the attic while 'ground floor' is a bit ambiguous (not that we have ever discussed this).
5. Are you living there now, or do you have tenants/renters living there? We live here now. It is a long story. It is a house bought for love though. It is like the horrible deformed dog that comes up to you and licks your hand on a rainy night, cold and shivering, so you take it home thinking to take it to the kennel tomorrow and then somehow a year later you have a deformed dog that you wouldn't swap for the best purebred money could buy. Or so we tell ourselves.
6. Window area for each wall? (north, south, east, west) Say 4 meters per face per floor except the east face which has no windows except for openings in the attic.
7. Foundation type and depth? Half of the house is built over a cantina (complete with wine barrels, etc). The other half is a dirt floor or thin non wall-to-wall concrete slabs on dirt. I have no idea about the foundation. The soil type (I forget the name) is decently load bearing. However, the walls are built in varying stages. The oldest being 150+ years and made of partially non dressed stone (i.e. round). The upper walls are made of good flat stone. The mortar is a type of mud. Seriously. Really freaks me out so I try not to think about it until I can have time to fix it. The neighbors are all construction people and they tell me not to worry. But I do.
I think this is a very challenging (hard) project, but worthwhile. Preserving old, well-made buildings is good, but dealing with their shortcomings is difficult. ]It is a lot of fun. I love the house even if I doubt we would do this a second time, especially given the fact that this is supposed to be a weekend type project. We are further hampered by the condition that we have a policy of not spending anything on the house that we can't pay for without touching savings and without getting a mortgage. We have made the first floor livable for the two of us in three months of 18 hour days given as paternity leave. Given that we are now three (happily) we are suddenly faced with not just camping out and idly fixing this or that but having a solid well heated first floor. This changes all of our plans, perspectives, etc.
Is your building actually well made, sound, interesting, and therefore worth preserving? Ye-es, I think so. If I had done things my way, I would have built an internal frame for the house first. However: living there, new baby, zoning requirements, absurd prices of architects, .... so this is still to come. But maybe knocking it down and starting over would have been better.
Assuming it is, you'll have to work with the strengths and weakness of old, thick stone, timber, real plaster, etc.
Strengths to enhance...
Thermal mass. If you can get some solar energy into the stone, it will hold it all night without overheating during the day. You need south facing windows, and insulation on the outside, like the perlite stucco. A dark color stucco on the south side will help a little, too. Is there room for an attached 3-season greenhouse on the south side? See photos.
Draft resistance. If you seal up any wall cracks, tighten the windows and doors, and check the ceiling for gaps and cracks (especially the wall corners), thick stone walls and massive plastered ceiling/floor timbers make comfortable homes with less cold drafts. Usually, old houses have lots of thick plaster ... build on that - don't take it out, learn the old ways, plaster it yourself.
Moisture control. Since there are no moisture barriers, your indoor humidity is self-regulated by water vapor moving into and out of the walls, wood beams, plaster, etc. This also gives you a thermal comfort boost, as moisture releases/absorbs a lot of heat as it condenses/evaporates. Be sure you don't defeat this process with non-breathing paint, cement plasters, closed-cell foams, etc. I made a mistake initially when i did a bathroom wall and used cement to repoint the stones. However I am hoping that since it is a single barrier, it will not create problems. Everything else has been very breathable - not that the old owners didn't do a fair amount of damage themselves first. But this will all come out eventually.
Cold walls in winter. This is the big problem, as I am sure you already know. Once the walls gets cold, nothing will help that cold feeling from your body losing IR heat to the walls. You have to keep pumping in more energy to feel comfortable. Yup.
Heat rises. Any gaps in your ceiling assembly will allow your money (heat) to flow out very quickly. Old houses are usually crooked, settling, shrinking, moving, and never built straight in the first place. Keeping the hot air in is a challenge. Don't forget about convection within your attic insulation - loose insulation allows rising hot air currents from below. Yup.
Water/moisture from below. I worry about the foundations and lower wall visible in your photo. Does rainwater and street runoff collect at the base of your walls? That can lead to problems. The house seems dry at the moment. Most of the outside is inclined enough that water doesn't collect and on the one side that it isn't inclined the pavement slopes away from the house. There is considerable ground water in the area, but so far there haven't been any problems.
I agree with Neven that the low cost of PV is making solar hot water panels obsolete. But you may not have a convenient mounting location. I would hate to spend a lot of money ruining a perfectly sound roof trying to get PV way up there. I prefer ground mounted PV. I also wanted ground mounted pv but it is a code no no except in very restricted circumstances.
I would think a biomass pellet stove for heat in the basement/ground floor would be cheaper than electric resistance heating, but maybe not cheaper than air-sourced heat pump (I'm assuming there's no room for ground-sourced heat pump). Something to check into. As Neven is doing (I think), grid-tied solar PV plus heat pump allows you to transfer your summer excess kWh to the grid and take them out in the winter when you need them (depending on your local utility rules). I agree we should look deeper into this. I had rejected it originally because the costs were too high and we are eligible for a large incentive to change our diesel boiler to pellets. I was also concerned about the costs of heating during a bad winter. However, now that we have supplemental heating in terms of a small pellet stove and a wood stove, a heat pump might work. I like the idea of being free from biomass as well. I'll do some research on this. Thanks.
Keep us updated so we can vicariously enjoy your hard work.