The humble heat pump, a clean energy technology, is making a late global leap to help wean homes off fossil fuels and slow the climate crisis. The shift is likely to accelerate as Europe finds itself in the midst of a gas price crisis fuelled by a cold winter, higher demand in Asia, and concerns about future supply given the war in Ukraine. As millions of households face the prospect of sliding into fuel poverty due to high and rising energy bills, one potential solution is becoming much more common in homes around the world. Heat pumps are quietly cutting carbon emissions, energy usage and forging resilience in the face of future fossil fuel price spikes.

Last year was a bumper year for heat pumps, in all their varieties. In France, Europe’s largest heat pump market, the installation of air-to-water heat pumps grew by 53%. If you include air-to-air heat pump installations in France, which transfer heat from outside of buildings into them and is the most dominant low carbon heating technology in France, the 2021 figure is in the region of 1.1 million. In Switzerland, 54% of the heating systems sold in 2021 were heat pumps. To the East, in Germany, last year saw a 28% increase in heat pumps being installed. Poland too reported seismic expansion in the heat pump market, hitting 66% growth with per capita heat pump sales greater than either of the UK and German markets. Further North, where the climate tends to be colder, Norway increased the number of heat pumps installed by 36% in 2021, while Finland – one of the world’s leading heat pump markets – saw a further increase of 25%. And it’s not just a European phenomenon: the Chinese heat pump market grew by 40% in 2021, its fastest level of growth since 2016.

Lessons for rapid transition

  1. Joined-up policy approaches are needed to unlock economic and social value: By combining measures and policies that look to stimulate heat pump sales, targeted support for low income households and incentivising other consumers to invest in home energy upgrades, heat pump installations can be scaled up rapidly. 
  2. Clearly communicate the co-benefits and don’t be afraid to bust those ‘myths’: Energy disinformation is becoming a sticking point in the culture wars – but those who talk-down the technology can’t argue with hard facts. Emphasising how heat pumps can save households money, improve their health, and cut carbon is vital to increasing uptake. 
  3. Using moments of disruption as opportunities to accelerate rapid transition: The situation in the Ukraine and the current gas price crisis presents a unique opportunity to accelerate low carbon heating options and domestic renewable capacity. With high gas prices set to last for years, there is no time like the present. 

The big picture

This growth of heat pumps installation needs to be sustained and, in most places, accelerated. The International Energy Agency (IEA) states that we need to install 1.8 billion heat pumps by 2050 if we are to get anywhere close to reaching net-zero. To do this, we need to build on, scale and replicate what has proven effective so far: strong government policy, incentives, policy coordination and support for additional complementary energy efficiency measures, high levels of research and development, as well as a global skills and training revolution.

Accelerating the leap to heat pumps will also improve domestic energy security and reduce reliance on fossil fuel imports, the profits from which are used to fund war. As the war of aggression against Ukraine by Russia brought into sharp focus, a reliance on gas imports not only makes economies vulnerable to price gouging, but means that financial flows from gas importing nations directly fund military war machines. The EU pays approximately €360bn a year to import fossil fuels and gets more than a third of its gas supplies from Russia. This sum is equal to the clean energy investments required to meet the EU’s 2030 climate targets. More striking is the fact that the UK, EU and US combined spend more than $700m a day buying Russian oil and gas. Quickly reducing dependence on gas and oil, and investing in energy efficiency measures will deliver sizable emissions cuts and a raft of co-benefits – but it is also an act of solidarity with the people of Ukraine. The Ukrainian IPCC scientist, Svitlana Krakovska, provided unrivalled clarity when she stated that “human-induced climate change and the war on Ukraine have the same roots – fossil fuels – and our dependence on them.”

Credit: Photo by Patrick Hendry on Unsplash

Context and background

The market for heat pumps has been growing at a steady pace over the past decade. In the European market, annual growth rates of 10% between 2011 and 2020 have been achieved. According to the European Heat Pump Association (EHPA), these annual growth rates have led to 14.84 million heat pumps being installed in 2020 across 21 countries. The top three markets for heat pumps currently are France, Italy and Germany, which when combined make up 48% of all sales. The top 10 markets for heat pumps, which include Spain, Sweden, Finland, Norway, Denmark, Poland and the Netherlands are responsible for 87% of annual sales

Despite heat pumps becoming the go-to technology for low-carbon heating and cooling in new buildings, they still only meet 7% of global heating demand. This, however, is expected to change quickly as their rapid roll-out continues and once costs come down, technologies improve and tighter regulations are introduced on updating the heating systems of old buildings. As electricity grids around the world get cleaner and cleaner through the growth of renewables, heat pumps could satisfy up to 90% of global heating needs with a far lower carbon footprint than gas-fired boilers. 

The improvements in technology and cost, as well as the raft of policies introduced around the world to bolster heat pump installations, have created the conditions for a rapid acceleration. By 2026, the global heat pump market is projected to be worth $83.5 billion. Under current projections, one out of three heat systems installed in 2030 will be a heat pump, a dramatic increase from the one in ten figure from 2020. In the UK, this would look like 19 million homes connected up to heat pumps with an additional five million connected to low-carbon heat networks by 2050. 

But given the current energy crisis, driven by fossil gas prices, this acceleration could gather even more pace. Research from British energy provider, Octopus Energy, shows that after energy bills rise in April it will become cheaper to run a heat pump rather than relying on a gas boiler (£833 vs. £841), despite a plethora of misleading articles across the media. Alongside these cost savings, which will help the millions of people facing fuel poverty, recent research from UCL found that heat pumps are up to five times more efficient than gas boilers, reducing demand on the electricity grid and cutting emissions. These important thresholds, at a time when gas dependence is making countries vulnerable, could constitute tipping points for the jump to pumps. 

Credit: ‘Earth as a Heat Pump’ by Ryan Somma via Flickr (CC BY-SA 2.0)

Enabling factors

Joined-up policy approaches are turning up the heat

All around the world, government policy around low carbon heating is having a tangible impact. And this policy is coming in all shapes and sizes, from tax credits to performance-based labelling. In China, for instance, subsidies have been made available, ranging from $1,100 to $4,350, through the Air Pollution Prevention and Control Action Plan for households purchasing heat pumps in the biggest cities. Moreover, across China and the EU, the heat created by heat pumps is classified as renewable heat, unlocking an array of additional tax rebates for those who have made the jump.

To encourage consumers to ditch gas heating systems, a variety of financial bonuses and rebates are speeding up installations. Italy’s ‘eco-superbonus policy’ was a foundational element of the country’s post-pandemic recovery plan, providing tax credits to homeowners for energy efficiency work. As part of this scheme, Italians are able to claim back a 110% refund from the government when they purchase a heat pump spread over five years. This superbonus has been dubbed a “win-win” for both government and citizens, rewarding citizens for making the jump to a heat pump while slashing Italy’s carbon emissions and reducing the dependency on imported fossil gas. Italy is currently the second biggest importer of Russian gas in Europe – a dependency that leaves them extremely vulnerable to geopolitical tides.

Governments are also leveraging local building codes and procurement methods to accelerate heat pump installations. Last year, the California Energy Commission introduced new building codes to galvanise the installation of heat pumps in new buildings, alongside rooftop solar PV, making heat pumps the baseline heating technology throughout the state. In France, the ‘MaPrimeRenov’ energy efficiency grant of up to €10,000 for every household willing to perform energy efficiency renovations and install a heat pump. This scheme has been combined with a complete ban on gas boilers from 2022 for newly built French homes and measures to help the lowest income households.

Credit: Photo by Martin Adams on Unsplash

Busting myths and unlocking the (co)benefits

For too long, heat pumps have suffered from an underserved and unjust reputation. This has been exacerbated by bad faith politicians and a misleading media suggesting that heat pumps are expensive, inefficient and – the most erroneous of all – that they don’t work in colder climates like the UK. While the upfront costs of a heat pump remains higher than conventional gas boilers in markets such as Britain, the costs are dropping rapidly and could be 40% less by 2030

The energy efficiency of heat pumps can deliver substantial emissions savings and reduce demand on the electricity grid, while saving homeowners cash on their bills. According to the IEA, heat pumps could save 50% of the building sector’s CO2 emissions, and 5% of the industrial sector’s, stopping 1.8 billion tonnes of CO2 from entering the atmosphere every year. One study in the US found that 32% of homes would benefit economically from installing a heat pump and 70% of homes would reduce their emissions. The study concludes that if heat pump installations are twinned with measures to improve the energy efficiency of the home, such as a deep retrofit, then the scope for reducing emissions and saving homeowners’ cash increases further. Even if emissions were not a concern, initial findings in the USA suggest that having a heat pump installed in your home can increase its value by between 4.3% and 7.1%. Across the pond in the UK, switching to a heat pump could shave £260 off annual energy bills

Sticking with gas is inefficient for public health too. A recent study caused widespread outrage when it found that methane leaks from gas stoves in American homes when they are turned off is equivalent to the emissions from half a million internal combustion vehicles. The study also found that gas hobs emit high levels of nitrogen oxides, which has been linked to reduced lung function and breathing problems. Fully electrifying our homes – from the heating, to the hob – could deliver significant health benefits for both people and the planet. 

Credit: Photo by Mykola Makhlai on Unsplash

The most enduring myth though is that the heat pumps do not work in colder climates like the UK. One cursory glance at installation data shows this to be entirely false. The leading heat pump markets are some of the coldest countries on earth, such as in Scandinavia. Finland, one of the leading markets for heat pumps, has seen meteoric rates on installations. In 2018, sales increased by 22%, with more than half a billion Euros of investment resulting in 75,000 heat pumps being installed. Since 2000, the amount of energy used by Finnish households for heating has declined accordingly by roughly 15%. Last year, Finland saw another bumper year for instals, up 25% on the year before.

It’s now or never to make the jump

While the terrain for rapid transition is constantly shifting, the current gas price crisis and the ongoing war in Ukraine has created a window to accelerate the phase out of fossil fuels rapidly and justly. Our dependency on gas has not only left us vulnerable to price spikes today, which are pushing millions of families into fuel poverty, but will also leave us susceptible to future price hikes and geopolitical conflict. Critics, who are possibly funded by fossil fuel companies, suggest that the answer is to ramp up extraction in the North Sea as our civic duty to ensure energy security. But these calls make no sense when you realise that the UK, amid a global gas price crisis and sanctions on a major gas exporter, is still exporting more gas than it is using for domestic use. For all intents and purposes, there is no such thing as ‘UK gas’ as it’s all pumped into a global market and sold to the highest bidder. And, worse still, expanding licensing in the North Sea is completely incompatible with the Paris Agreement, which the UK government has ratified

Current affairs have created an opportunity to turn energy security on its head. The quickest way to foster resilience in the face of fossil fuel price hikes, and shed our dependence on imports from war-mongering pariahs, is to rapidly scale up our domestic renewable capacity, electrify our heating systems and roll out an ambitious and far-reaching retrofitting programme. Retrofitting homes, for instance, would have an instant impact, reducing the amount of gas used to heat homes and creating thousands of jobs in the process. Every year, roughly 1.7 million gas boilers are installed in the UK, but if we were to switch this to 1.8 million heat pumps a year the UK would be able to shed its dependence on Russian gas imports within just two years. Of course, scaling up this rate of heat pump installations would require time and industrial coordination, and in countries that are more dependent on Russian gas, like Italy and Germany, shaking off this dependence would take longer. 

The scales are beginning to tip in the right direction too, away from gas and towards renewable sources of energy. In the UK solar energy is now 88% cheaper than it was a decade ago, meaning that running a gas plant in the UK today would cost four times as much as the same amount of energy generated by new wind and solar. Potentially significant infrastructure decisions, such as halting the Nord Stream 2 gas pipeline, which would have doubled the amount of gas flowing into Europe from Russia, may tip the scales further towards a rapid transition away from gas. More recently – and potentially more significantly – the German government announcing that it intends to reach 100% renewable energy by 2035 in order to shed its reliance on Russian gas could mark a potential tipping point in the energy transition. Commenting on the announcement, German finance minister Christian Lindner called renewable energy the “energy of freedom”

A rapid scaling up of energy efficiency measures and heat pump installations is beginning and can create a massive amount of secure green jobs around the world. In Spain, trade unions have suggested that energy efficiency renovations could make enough work for nearly half a million citizens. In the UK, an ambitious retrofitting programme could create 138,000 jobs over the next ten years. From every angle it’s clear: making the jump to pumps will deliver huge social and economic benefits, while fostering international solidarity with nations that are suffering at the hands of petrostate aggression.


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2020s, 2030s

Areas of change

Clean energy, Better homes