Heat Pumps Driving Global Renewable Heat Growth: Insights from the IEA Renewables 2025 Report
The IEA Renewables 2025 report underscores the accelerating role of heat pumping technologies in advancing global energy transitions. With heat demand accounting for over a quarter of global energy use, heat pumps, ranging from residential air-source systems to industrial-scale high-temperature installations, are emerging as a cornerstone of decarbonized heating. The report’s analysis through 2030 reveals significant policy progress, surging electrification trends, and deeper integration of heat pumps within district heating and industrial processes, particularly across Europe, China, and North America. The report makes clear that the global energy transition is now inseparable from the progress of heat-pumping technologies. From smart, grid-interactive residential systems to industrial-scale high-temperature solutions, the path to decarbonized heat is increasingly powered by the heat pump. The work program of the collaboration projects within HPT TCP is well designed to contribute to this needed progress.
The report was released on October 7 and is IEA’s main annual report on the sector. This year’s edition provides forecasts for the deployment of renewable energy technologies in electricity, transport, and heat through 2030. It highlights developments in key areas of the sector, including policy changes, manufacturing trends, and the financial health of different parts of the industry. Below follows a summary with special focus on heat pumping techniques.
Heat Pumps: Central to the Electrification of Heat
According to the IEA (p. 200–201), renewable electricity has become the fastest-growing source of renewable heat in buildings between 2018 and 2024, expanding by nearly two-thirds (+2.3 EJ). Heat pumps have been the key enabler of this trend, harnessing ambient energy from air, water, and ground to provide efficient, low-carbon heating and cooling. Total heat electrification in buildings is projected to grow by 64% by 2030, representing almost half of all electricity use in the sector.
The report highlights that heat pump deployment has played “a major role” in the renewable electrification of buildings across China, the European Union, Japan, and the United States (Figure: Heat pump sales in selected regions, 2019–2024). In these regions, renewable electricity’s share in the buildings sector is expected to rise from 60% to 75% by 2030.
Global Market Developments and Policy Support
Despite a brief slowdown in 2024, with global sales falling by 1%, heat pumps continue to gain long-term momentum (p. 201–202). Europe saw the steepest decline (–21%), largely due to policy uncertainty in Germany following subsidy changes. However, strong national incentives led to a 63% surge in UK sales, while the United States saw a 15% rebound, with heat pumps outselling gas furnaces by 30%.
China, the world’s largest heat pump manufacturer, is leading policy-driven market transformation. The State Council mandated a phase-out of small coal-fired boilers by 2025, while the National Development and Reform Commission launched a Heat Pump Action Plan (April 2025) to expand both production and deployment. Similarly, ten U.S. states and Washington D.C. committed to increasing residential heat pump sales to 65% by 2030 and 90% by 2040 through coordinated state-level programs.
Integration with District Heating and Cooling
The report projects significant growth in the integration of heat pumps into district heating networks. Large heat pumps are expected to supply 10% of Europe’s district heating by 2030 and up to 30% by 2050 (p. 203–204). Germany alone could reach 6 GW of installed capacity by 2030, one-third of its total district heating output, supported by favourable policies and carbon-reduction targets.
New EU rules now require district heating and cooling systems to source at least 50% of their energy from renewables, waste heat, or high-efficiency cogeneration by 2027. Waste and surplus heat are formally recognized as renewable energy sources under the revised Energy Efficiency Directive. Countries such as Denmark and Austria are pioneering low-temperature district heating systems to enhance integration with large-scale heat pumps and other renewables (Figure: Renewable district heating in buildings, 2018–2030).
The IEA Renewables 2025 report also notes emerging projects where solar and geothermal systems are coupled with heat pumps to boost efficiency. For instance, in Serbia, a 27-MW solar collector field is paired with a 17-MW heat pump and a 60-MW electric boiler, illustrating the role of hybrid systems in Europe’s renewable heat transition (p. 206).
Industrial and Waste Heat Recovery
The industrial sector, responsible for 26% of global energy consumption, is beginning to adopt high-temperature heat pumps and cascade heating systems that reuse heat across multiple processes. The report (p. 191) identifies strong policy backing for waste heat recovery, particularly within the EU under the Energy Efficiency Directive, and in China’s eco-industrial parks under its circular economy framework. India’s Energy Conservation Act and Perform, Achieve and Trade (PAT) scheme also incentivize industrial heat recovery.
Such developments align with ongoing research under the IEA’s Technology Collaboration Programme on Heat Pumping Technologies (HPT TCP), which includes international collaboration projects (formerly called annexes) exploring high-temperature heat pumps, industrial integration (HPT Project 68), and AI-based predictive maintenance (HPT Project 67). These collaborative efforts are directly relevant to the report’s call for scalable, efficient solutions for decarbonizing industrial heat.
Synergy with Renewable Electricity and Smart Controls
The synergy between heat pumps and renewable electricity is a defining feature of the 2025 outlook. As variable renewable generation expands, smart control and digital optimization (as explored within HPT Project 67) become increasingly important. While the IEA report does not provide detailed figures on AI applications, it emphasizes that electrified heat systems, including heat pumps, play a vital role in balancing power grids and enabling demand flexibility, a research area actively pursued under the recently completed HPT Annex 57 Flexibility by implementation of heat pumps in multi-vector energy systems and thermal networks, and will be explored further in the follow up project which will be led by DTI “Flexibility from Large-Scale and Aggregated Heat Pump Systems”.
Geothermal and Hybrid Systems: The Next Frontier
Heat pumps are also enhancing the performance of geothermal and solar thermal systems for district and industrial heating. Enhanced and closed-loop geothermal systems “could unlock even deeper resources, especially when combined with heat pumps or cogeneration” (p. 205). Hybrid configurations are already being deployed in multiple European cities, showing strong promise for 2030 and beyond.
China remains the largest market for geothermal district heating, but European countries—including Germany, France, Denmark, and the Netherlands; are rapidly scaling up hybrid geothermal–heat pump systems, supported by initiatives such as the European Geothermal Alliance (2024).
Outlook to 2030: A Foundation for Decarbonized Heat
Between 2025 and 2030, global annual heat demand is projected to grow by 8%, yet renewable heat production is expected to rise by 42% (+12 EJ). Modern renewables will meet 18% of total heat demand by 2030, up from 14% in 2024, with heat pumps serving as a central pillar of this expansion.
The IEA report concludes that continued policy support, electrification, and innovation—particularly in high-temperature, industrial, and large-scale heat pumps, will be vital for achieving energy and climate goals.
The Future of Heat Pump Innovation
As the Renewables 2025 report makes clear, the global energy transition is now inseparable from the progress of heat pumping technologies. From smart, grid-interactive residential systems to industrial-scale high-temperature solutions, the path to decarbonized heat is increasingly powered by the heat pump.
“Heat pumps are not just a technology for today—they are the foundation of tomorrow’s clean, flexible, and efficient energy systems.”
Sources:
IEA (2025), Renewables 2025, IEA, Paris https://www.iea.org/reports/renewables-2025, Licence: CC BY 4.0.
EHPA (2025), European Heat Pump Market Report.
Energy Efficiency Directive (EU, 2024);
IEA HPT TCP ongoing projects.