$\text{Efficiency}=\frac{\text{0.54}\times 746}{500}=\text{0.80}$  or $80\%$

($0.5 \mathrm{kW} = 500 \mathrm{W}$ and $0.54 \mathrm{hp} = 0.54\times 746 \mathrm{W}$)

$\therefore$ 80% of the electrical energy is converted to mechanical energy and the rest 20% is converted to heat energy.

$\therefore \frac{20}{100}\times 500=100W$ of power is converted to heat

$\therefore$ Heat produced in 1h (or 3600 s)

            $= 100\times 3600 = 36\times {10}^4 \mathrm{J}$

            $=\frac{36\times 10^4}{\text{4.18}}\text{cal}=\text{8.6}\times 10^{4}cal$