Global heat pump sales rose by nearly 15% in 2021, double the average of the past decade, led by the European Union (EU) where they rose by around 35%, according to the report. Sales in 2022 are set to hit record levels in response to the global energy crisis, especially in Europe where some countries have seen sales double in 1H2022 compared with the same period last year.
 

Annual sales of heat pumps in the EU could rise to 7mn by 2030 – up from 2mn in 2021 – if governments succeed in hitting their emissions reduction and energy security goals, predicts the IEA. Heating buildings accounts for one-third of EU gas demand today. Heat pumps could reduce that demand by nearly 7bn cm3 in 2025 – roughly equal to the natural gas supplied via the Trans Adriatic Pipeline in 2021. This annual gas saving could grow to at least 21bn cm by 2030 if EU climate targets are met, suggests the study.
 

Commenting on the report, IEA Executive Director Fatih Birol, says: ‘Heat pumps are an indispensable part of any plan to cut emissions and natural gas use, and an urgent priority in the EU today. 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.’
 

Heat pumps typically cost less over their lifetimes than fossil fuel boilers, thanks to their higher efficiency. At today’s energy prices, annual energy bill savings for households that switch to heat pumps can range from $300 in the US to $900 in Europe.
 

Government policy support is needed, though, to help consumers overcome heat pumps’ higher upfront costs relative to alternatives, says the IEA. The costs of purchasing and installing a heat pump can be two-to-four times as much as those for a gas boiler. Financial incentives for heat pumps are already available in over 30 countries, which together cover more than 70% of heating demand today. Many of them also provide additional support to low-income households where energy savings from a heat pump can be significant, ranging between 2% and 6% of household income.

In a scenario in which all governments achieve their energy and climate pledges in full, heat pumps become the main way of decarbonising space and water heating worldwide. The IEA estimates heat pumps have the potential to reduce global CO₂ emissions by at least 500mn tonnes in 2030 – equal to the annual CO₂ emissions of all cars in Europe today. Leading manufacturers are seeing promising signs that current momentum and policy support could put the industry on a trajectory that triples sales by 2030 – and they have accordingly announced plans to invest more than $4bn in expanding heat pump production and related efforts, mostly in Europe, notes the IEA.

Opportunities exist also for heat pumps to provide low-temperature heat in industrial sectors, especially in the paper, food and chemicals industries, adds the report. In Europe alone, 15 GW of heat pumps could be installed across 3,000 facilities in these three sectors, which have been hit hard by recent rises in natural gas prices.

The rapid expansion of heat pumps presents some challenges, but there are solutions to these barriers, according to the IEA. Heat pumps will inevitably increase electricity demand, although energy efficiency can greatly reduce the impacts on the grid, alongside improved grid planning. Global heat pump supply and installation could require over 1.3mn workers by 2030, nearly triple the current amount, raising the potential for skilled labour shortages, especially for installers. Special training programmes and the inclusion of heat pumps in certifications for plumbers and electrical engineers could help avoid the risk of shortages in skilled labour.

The additional global upfront investment in heat pumps required to reach announced climate pledges reaches $160bn annually by 2030. However, these costs are outweighed by the economy-wide savings on fuel, especially if energy prices remain close to their current levels, the report says.

‘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. 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 to fulfil their significant economic and environmental potential,’ concludes Birol.