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Experts see heat pumps as one of the main solutions to tackle the carbon emissions associated with building insulation in the UK and internationally.However, sales of the technology (often likened to an upside-down refrigerator) have been low in many countries.
The latest data compiled for Carbon Brief in this article shows that the trend is beginning to turn, with double-digit sales growth in countries ranging from Austria to China in 2021.
While rapid market growth appears to be assured, without further action by governments, heat pumps may still fall short of the levels needed to achieve net-zero emissions globally by 2050.
Heat pumps are a low-carbon heating technology with the potential to reduce building heating carbon emissions on a massive scale.
They use electricity to transfer heat from the surrounding outside air, water or soil to the interior of the building and heat the water.The process is so efficient that heat pumps provide three to four units of heat for every unit of electricity needed to run them.
When the electricity used to drive the heat pump is produced by a low-carbon source, all that heat is also low-carbon.It is this simple ability to deliver heat very efficiently and cleanly that makes heat pumps a key technology for most net-zero emissions.
For example, the International Energy Agency’s (IEA) pathway to net-zero emissions by 2050 includes installing 1.8 billion heat pumps in buildings by 2050, meeting 55% of global heating energy needs.By comparison, only 180 million units are installed today, providing 7% of heating.
Also in the UK, the most cost-effective Climate Change Council (CCC) ‘balanced’ pathway to net zero emissions believes that by 2050, most households will be heated with heat pumps.
However, until recently, the heat pump market has grown much slower than required in the IEA or CCC scenarios.This can be seen from the IEA global heat pump inventory data below, which shows that on current trends, only 253 million heat pumps will be installed globally by 2030, compared to 600 million that year in the IEA’s net zero scenario 1 heat pump – 58% worse.
According to the IEA, only 177 million heat pumps will be installed worldwide in 2020.The majority of these heat pumps are in China (33%), followed by North America (23%) and Europe (12%).
Interestingly, the highest penetration rates for heat pumps can be found in the coldest climates, as shown in the graph below.In Europe, the four countries with the largest share of heat pumps are Norway (60% of households), Sweden (43% of households), Finland (41% of households) and Estonia (34% of households).The four countries are also facing some of the coldest winters in Europe.
According to IEA data, the global heat pump market will grow by only 3% in 2020.Before that, the market was growing at about 10% per year.The IEA’s net-zero path calls for global market growth of around 13% year-on-year by 2030.
After a slowdown in 2020, preliminary data point to a strong recovery in the heat pump market in 2021, with double-digit growth in some countries for which data are available.
Across Europe, for example, the European Heat Pump Association (EHPA) expects the market to grow by more than 25% by 2021, reaching 2 million units sold annually for the first time.
The Polish heat pump association Port PC reports a 60% increase in heat pump use in 2021, largely due to regulations phasing out coal heating for single-family homes in the country.
In Germany, the heat pump market will grow by 28% in 2021, with 154,000 units sold – mainly due to the expansion of sales of air source heat pumps.A carbon tax on heating fuels in 2021 partly explains the observed increase.
The table below shows these numbers, as well as data from several other countries for which data is available through 2021.
The U.S., another global leader in air source heat pumps, grew by 15% in 2021, with consecutive annual growth rates exceeding 5% since 2015.
According to the Finnish Heat Pump Association, Finland will have similar growth to Germany in 2021, with installed heat pumps increasing by 25% to 130,000 units.This is remarkable given the country’s small population, with almost 5% of households having a heat pump installed by 2021.
Most heat pumps installed in Finland are air-to-air heat pumps, which can also be used for cooling.However, the Finnish Heat Pump Association estimates that air-to-air heat pumps for refrigeration represent only 10%-15% of their respective markets.
It is worth noting in Finland that the heat pump market only started to expand in the mid-2000s, and the cumulative installed base has now exceeded 1 million units.
Overall, the French heat pump market will grow by 3% in 2021, but the air-to-water market will grow by 53%.The French heat pump market is the largest in Europe and will exceed 1 million units by 2021.By far the most important type of heat pump in France is the air-to-air heat pump.
Switzerland is another mature and well-established heat pump market, with a 20% market growth in 2021, mainly for air-to-water systems.More notably, 54% of all heating systems sold in Switzerland last year were heat pumps, making it the dominant heating technology not only in new buildings but also in existing ones.
In China, preliminary estimates are that the residential air source heat pump sales market will grow by 10% in 2021, surpassing 1 million units for the first time, implying a larger increase in non-residential sales.
In Norway, a total of 125,000 heat pumps will be sold in 2021, which is comparable to Finland’s sales.Compared to 2020, this represents an increase of 36%.Similar to Finland, most of the heat pumps sold in Norway are air-to-air heat pumps.
While further rapid growth now looks likely, the pace of adoption — and how the path to net-zero emissions is measured — will largely depend on government policy and energy price trends.
As previous analyses have shown, the recent rise in natural gas prices in Europe and Asia has made heat pumps more economically attractive than gas boilers.But that could change, which is why policy remains key and steps are being taken to provide more support for heat pumps.
For example, in the EU, the European Green Deal and the push to decarbonise heating through various directives means that the heat pump market will double to 4 million installations per year, according to the EHPA.
Drivers include the European Commission’s proposal to extend the EU emissions trading system to heating fuels, which would improve the economics of heat pumps relative to oil and gas heating.
There are also new regulations in various European countries to ban or limit fossil fuel heating, not only in new buildings but also increasingly in existing ones.
For example, the new German government announced that from 2026, all new heating systems must use at least 65% renewable energy.Other countries such as Norway, Sweden, Denmark and Finland have announced explicit or implied bans on the use of new petrochemical heating systems in all buildings.
The Netherlands no longer allows new dwellings to be connected to the gas network, while Ireland, Flanders (Belgium) and Austria have announced bans on the use of oil-fired boilers in new buildings.
Ireland recently unveiled an 8 billion euro plan to nearly double the value of heat pump grants as the country hopes to deliver 400,000 heat pumps into homes by 2030.
In the UK, the government is consulting on requiring heating system manufacturers to sell more and more heat pumps and has announced an “ambition” to phase out gas boilers by 2035.It will also launch a new heat pump subsidy scheme in April.
China has a proven track record in reducing air pollution from coal-fired boilers using clean thermal energy solutions.The heat pump market potential in its southern provinces is huge, and areas such as Beijing already offer incentives.
However, despite these local incentives and programs, there is still a lack of national-level support for heat pumps in China.For example, they are not classified as renewable by the national government, which means they cannot benefit from subsidies for clean heating provided by the northern provinces.
In the U.S., a push to electrify homes—and ban fossil-fuel heating in some regions—is expected to further boost the heat pump outlook.The stalled “Build Back Better” program includes a 10-year, $3.5 billion electric home rebate program that includes up to $4,000 in heat pump subsidies, among other incentives.
The Biden administration also created a National Building Performance Standards Coalition, a working group of 33 state and city governments to “unlock energy efficiency and electrification across the building industry.”
Double-digit growth in major heat pump markets in 2021 shows strong momentum.But without continued expansion of policies to support their rollout, heat pump deployment will fall short of the levels needed to reach net-zero emissions by 2050 – and limit warming to 1.5 degrees Celsius.
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