Heat pumps are hot property in Europe. Does Britain have cold feet?


The unassuming heat pump is proving to be a key player in Europe's efforts to move away from gas heating. Countries in the EU, including France, Italy, and Poland, are experiencing a surge in the installation of heat pumps in homes, contributing to a reduction in Europe's dependence on gas, especially from Russia.

However, the reception hasn't been uniform. The UK, facing a skeptical public and unclear policy direction, lags behind in adopting heat pumps. In Germany, heat pumps have become a focal point in cultural debates, with the far right opposing the expenses associated with transitioning from fossil fuels.

Recent developments in the UK show signs of growing interest, with the government increasing its grant scheme by 50%. Nevertheless, across Europe, as government support schemes, once lucrative, are tightened, heat pump sales are starting to cool off after reaching record highs last year.

The European Heat Pump Association (EHPA), gathering data from industry groups throughout Europe, disclosed a record-breaking year for heat pump sales across the continent in 2022. Although the market sustained growth in the first half of 2023, indications of declining sales surfaced in the third quarter, according to the association.

Expressing concern, Thomas Nowak, the head of EHPA, remarked, "It is concerning. This is completely the wrong direction for the heat pump market, and policymakers are not sufficiently alarmed by the situation. No one seems to be willing to take real action."

France dominates heat pump sales

In a significant shift, heat pumps surpassed fossil fuel boilers in sales in France last year, as reported by the International Energy Agency. This coincided with France's inaugural year of implementing a national ban on gas boilers in new constructions.

The surge in heat pump sales in France gained attention in the UK after a report by the UK's energy installer accreditation body, MCS, revealed that France had adopted heat pumps at a rate ten times higher than the UK. With just 55,000 heat pumps sold in Britain last year compared to over 620,000 in France, the difference is striking. Although French heat pump sales continued to grow in the first half of this year compared to 2022, they experienced a 13% decline in the third quarter, according to the European Heat Pump Association (EHPA).

France was Europe’s biggest heat pump market in 2022

Heat pump sales, 2022, thousands

Guardian graphic. Source: EHPA Market Report 2023

The triumph of France's heat pump initiative is partly grounded in the country's longstanding preference for electric heating over gas. Additionally, the market has thrived due to what Charlotte Lee, head of the UK's Heat Pump Association, identifies as "clear and decisive policy by the French government."

Lee highlights several factors contributing to France's success, including stringent standards for new-builds, subsidies for heat pumps, relatively low electricity prices, and a growing community of heat pump installers. Households stand to benefit from grants, with up to €15,000 (£13,000) available for those opting for a ground-source heat pump in an existing property and up to €9,000 for an air-source heat pump. This incentive program is scheduled to continue until 2024.

Poland and Italy emerge as fastest growing markets

While France leads in the number of heat pump installations, Italy and Poland experienced the most significant surge in sales last year, marking an impressive success story, according to Thomas Nowak.

In both Poland and Italy, the demand for heat pumps has spiked, coinciding with the soaring prices in the commodity market following Russia's invasion of Ukraine. This heightened demand aligns with robust government initiatives in both countries, urging homes and businesses to shift away from gas and coal heating.

In Poland, a government initiative aimed at addressing air pollution from coal burning for heating provided households with incentives of up to €14,420 to adopt green energy solutions, including heat pumps. Remarkably, over 200,000 heat pumps were sold in Poland last year, nearly matching the total sold in Germany, which has a population more than twice as large. Concurrently, sales of home solar panels also experienced a significant boost.

However, sales have recently slowed to just under 77,000 in the first half of 2023, and there's no clear explanation for this decline, as stated by Thomas Nowak. There is speculation that last year's sales figures might have included a substantial number of heat pumps imported from China, which are now sitting in warehouses awaiting installation orders. The European Heat Pump Association (EHPA) could not confirm this information.

In Italy, the government introduced a "superbonus" scheme in 2020, covering 110% of the cost of green home upgrades, including heat pump installations. This led to a surge in heat pump sales, surpassing 500,000 last year. However, earlier this year, the government abruptly terminated the scheme due to concerns about potential fraud amounting to billions of euros.

UK market comes in from the cold

Thomas Nowak attributes the success of the heat pump rollout in Germany, Poland, and Italy to the clear and consistent policies implemented by their respective governments. In contrast, the UK's slower progress is attributed to Westminster's failure to fully support its heat pump ambitions, as stated by Nowak.

"For the heat pump rollout to succeed, you need a government that has a bit of backbone. Part of the problem in the UK is the indecisiveness of the government," remarked Nowak.

While the UK government aims to achieve 600,000 heat pump installations annually by 2028, last year's total was only 72,000. This figure marked the lowest number relative to population size in Europe, as reported by the European Heat Pump Association (EHPA). Specifically, there were only 1.9 heat pumps installed for every 1,000 households in the UK last year, in stark contrast to France, where the ratio was 20 heat pumps for every 1,000 households.

Photograph: Leon Neal/Getty Images
The House of Lords committee attributed the "disappointingly low" uptake of low-carbon heating systems primarily to the government, as highlighted in its report earlier this year. The committee found that public awareness of these systems was "very limited," and the promotion of the scheme had been "inadequate." Additionally, a shortage of installers and a lack of "sufficient independent advice" were identified as factors impeding adoption, according to the report.

There seems to be a potential shift in this scenario. At the end of October, the government decided to raise the grant towards the cost of a heat pump from £5,000 to £7,500. This decision resulted in a doubling of installations in the first full month following the change. The increased government support is also viewed positively by the market, as companies continue to invest in skills and training. With these developments, the UK market for heat pumps may be on the verge of a significant upturn.

Heat pumps accounted for 98% of heating units sold in Norway in 2022

2022 market share

Guardian graphic. Source: EHPA Market Report 2023

Lessons from Nordic heat pump heartlands

Norway boasts the world's highest per capita penetration of heat pumps, with 60% of all households equipped with these systems, and its Scandinavian neighbors closely follow suit. In Sweden, there are over a million installed heat pump units, serving more than 40% of households.

The popularity of heat pumps has been steadily rising since the 1970s, spurred by the global oil crisis that prompted a reevaluation of energy policies in countries without domestic oil and gas supplies. Recent initiatives in Denmark, a nation that once heavily relied on North Sea gas for heating, are set to further increase the prevalence of heat pumps across the region.

While Denmark has been relatively slow in this transition, plans are underway to replace 400,000 gas boilers by 2028-29, according to Thomas Nowak. Between 30% and 50% of these homes will be shifted to district heating schemes by 2028, many of which will leverage large-scale heat pumps. Additionally, other homes will transition to electric heat pumps by 2030.

These plans were set in motion by the Danish government last year, responding to the surge in gas market prices following Russia's full-scale invasion of Ukraine on February 24. Nowak notes that this shift is met with a positive attitude in Denmark, with people believing they are contributing to the common good, a sentiment he feels is lacking in the UK.