Heat pumps in multi-family buildings, drivers and barriers

In Europe, the residential heat pump market has been steadily increasing for several years in most countries. However, the situation differ depending on the type of building. Heat pumps are the most widespread solution in new individual houses, while market for them in multi-family buildings (MFBs) remains low, in new buildings as well as in existing ones. So, which are the possible drivers and main barriers and for a more widespread use of heat pumps in MFBs? The situation has been analyzed in the eight countries (Austria, Denmark, France, Germany, the Netherlands, Italy, Switzerland, UK) participating in HPT Annex 50 “Heat Pumps in Multi-Family Buildings”.

Heat pumps still represent a small portion of heating systems in the global building stock in all participating countries, from a few percent up to 10%. In some countries, such as Austria, Switzerland and France, there are significant differences between heat pump shares in MFBs (1–7%) and individual houses (10–15%). The differences in the market development between individual houses and MFBs are very obvious in new buildings. In some countries, such as Austria, France and Germany, heat pumps are installed in around 50% or more of the new built individual houses. However, heat pumps represent only 4–5% of heating systems in new collective housing in France and more than 20% in Germany and Austria.

The policy framework is a driver for increasing the market share of heat pumps in MFBs. All the studied countries are affected by 2020 and 2030 climate targets in terms of CO2 emission reductions, energy efficiency and use of renewables. To meet these targets, each participating country has developed a specific regulatory scheme to encourage renewables and reduce energy consumption in the building sector. There are two key drivers for heat pumps: buildings regulations for new buildings and incentive programs for existing ones. In addition, several countries have implemented or are planning to implement a ban on fossil fuels, including natural gas, in newly constructed buildings. In conclusion, although policies are being tightened, they are becoming more favorable to the application of of heat pumps in buildings. The few differences noted in the regulations do not fully explain the weak development of heat pumps in collective housing compared to single-family homes. Thus, besides regulatory barriers, other barriers have to be overcome to obtain a sustainable development of heat pumps in MFBs.

Two important barriers are heat capacity and heating supply temperature. Without any refurbishment, many existing MFBs need high heating temperatures (above 60°C), which do not easily suit heat pump applications. Moreover, in most countries, state-of-the-art heat pumps provide heating capacities below 50 kW. These types of products are only adapted for efficient buildings, not for collective heating production in old ones.

Another barrier is lack of access to a suitable heat source. Most multi-family buildings are located in cities, with rather high building density. Access to geothermal sources could be complicated and for air-source heat pumps, the unit can be difficult to integrate, it requires access to a terrace roof, an outdoor carpark or garden near the technical room.

In addition, there are economical barriers – both related to captial cost and running cost. In MFBs, high capital costs affect the competitive position of heat pumps compared to fossil-fuel boilers or direct electric heating, especially in new private buildings. A main concern is the cost of flats, and consequently their selling price. Developers are so far rarely able to value a renewable heating system such as a heat pump system in their buildings. This quite expensive heating system directly affects the cost without any effect on the selling price. Concerning running cost, current prices for oil, natural gas and biomass greatly impact the heat pump market. Since the prices of fossil-fuel energy sources have been stable at low levels, there is a significant barrier for investing in new heating technologies that use electricity. The price of electricity varies substantially from one participating country to another but is always high compared to gas prices.

Finally, the lack of knowledge on the part of the building sector and customers is an important barrier. Heat pumps are still too often considered as a product for individual houses. Significant demonstration efforts are needed to highlight the potential offered by heat pumps in collective housing.
To conclude, in the eight European countries participating in Annex 50, heat pumps are expanding rapidly in single-family homes but are still struggling to gain market share in collective housing, despite regulations that are increasingly favorable to their installation in all countries, due technical, economic and knowledge related barriers which have been identified.

Odile Cauret
Électricité de France (EDF)

The text has been shortened by the HPC team

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