Why the humble heat pump is about to experience a global boom

A new report from the International Energy Agency has predicted a huge global boom in the sale and uptake of heat pumps, as consumers seek out more energy efficient – and less costly – ways to heat water and their homes.

The IEA says the trend – which in Europe alone could see sales of heat pumps soar to 7 million a year by 2030, up from 2 million in 2021 – is being driven by the global energy crisis, which has sent fossil fuel prices to painful new highs, particularly gas.

This has forced people, businesses and governments to look to cheaper methods of heating, both to save money on bills and – in the bigger scheme of things – cut overall reliance on imported fossil fuels.

As the IEA report explains, a heat pump extracts heat from a source, such as the surrounding air, geothermal energy stored in the ground, or nearby sources of water or waste heat from a factory. It then amplifies and transfers the heat to where it is needed.

Because most of the heat is transferred rather than generated, heat pumps are far more efficient than conventional heating technologies. The output of energy is normally several times greater than that required to power the heat pump, normally in the form of electricity. With renewable electricity – such as rooftop solar – the equation gets even better.

While heat pump technology generally costs more up front than the traditional fossil fuel alternatives, they can therefore deliver major savings across their lifetime – and remove any reliance on increasingly costly fossil gas.

The IEA report, The Future of Heat Pumps, puts annual savings for households that switch to heat pumps somewhere between $US300 in the United States to $US900 in Europe. Nothing to sneeze at.

“Heat pumps are an indispensable part of any plan to cut emissions and natural gas use, and an urgent priority in the European Union today,” says IEA Executive Director Fatih Birol.

“The technology is tried and tested, even in the coldest of climates. Policy makers should be putting their weight behind this technology that is witnessing unprecedented momentum at the moment.

“Heat pumps will be central to efforts to ensure everyone can heat their homes this winter and next, to protect vulnerable households and businesses from high prices, and to meet climate objectives.”

Clearly, however, the word is already getting out. Global heat pump sales rose by nearly 15% in 2021, double the average of the past decade, led by the European Union where they rose by around 35%.

The report predicts sales will continue climbing to hit record levels in 2022, in the ongoing response to the global energy crisis.

This gels with the data from Australia, which One Step reported just last week has seen the number of air source heat pumps installed nationally – for hot water heating, alone – jump by 76 per cent in 2021.

SunWiz, the solar industry analysts who provided the data to One Step, believes this will grow by a further 46% in 2022, in stark contrast to solar PV installations which are set to contract by 22 per cent.

In Australia, there are already some subsidies and incentives in place to drive the uptake of heat pumps, including under federal government’s SRES scheme, which – as Sunwiz managing director Warwick Johnston notes – classifies ASHPs as renewable and deems them worthy of creating STCs.

In Victoria, the state Labor government’s Solar Homes scheme also offers discounts on the cost of heat pump technologies, if they are installed to replace gas alternatives.

But more can be done – particularly to drive the uptake of heat pump technology by industry.

“All the pieces are in place for the heat pump market to take off, reminiscent of the trajectory we have seen in other key climate technologies like solar PV and electric vehicles,” says the IEA’s Birol.

“Heat pumps address many of policy makers’ most pressing concerns on energy affordability, supply security and the climate crisis. Policy measures are in place today, but they need to be reinforced urgently to allow heat pumps fulfil their significant economic and environmental potential.”