Efforts for heat pump deployment are bearing fruit, but more will be needed

Energy-related CO2 emissions from buildings have risen in recent years after flattening between 2013 and 2016. Direct and indirect emissions from electricity and commercial heat used in buildings rose to 10 GtCO2 in 2019, the highest level ever recorded. Several factors have contributed to this rise, including growing energy demand for heating and cooling with rising air-conditioner ownership and extreme weather events. Enormous emissions reduction potential remains untapped due to the continued use of fossil fuel-based assets, a lack of effective energy-efficiency policies and insufficient investment in sustainable buildings.

An updated version of the Tracking Clean Energy Progress Report from IEA, June 2020, is presented at the IEA website. Worth to notice in this tracking report is that the progress for Heat Pumps is going in the right direction. The status has changed from “not on track” to “more efforts needed”, which is a very positive sign.

Thibaut Abergel, Clean Energy Technology Analyst at IEA, described this progress more in detail during the HPT TCP ExCo spring meeting in May 2020. He showed some of the trends regarding the heat pump market development and deployment.

Efforts are bearing fruit, but more will be needed
The heat pump market is particularly dynamic since 2015. In the United States, for example, annual shipments grew from 2.3 million units in 2015 to 3.1 million units in 2019. (AHRI, 2020). The European Union market is expanding quickly, with around 1.3 million households purchasing a heat pump in 2018 (a 12% annual average growth rate since 2015) (EHPA, 2020).

The heat pump market growth is uneven, mostly driven by newly built houses. The share of heat pump sales across newly built buildings can reach 50% or more (IEA, 2018), while the deployment in existing buildings is much slower.

Heat pumping technologies subtypes are all on the rise and the sales of heat pump water heaters have more than tripled since 2010, largely driven by China. Ground-source heat pumps are less common globally but growing effectively in many countries including the United States, China, Sweden and Germany.

Performance is increasing steadily
Typical seasonal energy performance factors fall in the range from 3 to 5. A SPF of 4 would be the average in 2019 in the United States (MEPS = 3.8) and most European countries (4 would be rated A++, heat pumps from A+ to A+++). The SPF is highly dependent on temperature, hence the range from 3 to 5. The average SPF of heat pump sales has risen steadily since 2000.

The revision of standards spurred efficiency improvements and heat pump energy performance in the US rose by 13% 2006 and 8% in 2015 following updates in minimum energy performance standards.

In order to reduce the lifecycle environmental impact of heat pumps, they should move towards low-to zero GWP refrigerants.

Heat pumps – an effective decarbonisation solution
The heat pumps of today could supply around 90% of heating needs in the world with a lower CO2 footprint than gas boilers, particularly in major heating markets such as Canada, China, Europe and the United States. This map shows the heat pump competitiveness index relative to regional heating demand, 2017. The index compares the carbon footprint of a heat pump relative to a gas condensing boiler, accounting for electricity-related CO2 emissions.


Source: IEA (2018), Perspectives for the Clean Energy Transition

Policies plays a strong role in the increase of sales
Energy efficiency programmes specific to heat pumps plays a strong role in the increase of heat pump sales. Two good examples are that subsidies for air source heat pumps, 24000-29000 CNY/households in Beijing, Tianjin, and Shanxi) has led to an increased implementation in those regions and subsidies for ground-source heat pumps, which covers 30% of the investment cost, in the United States and Beijing has spurred the market there.

Regulations and labelling on heat pump energy performance, like mandatory standards e.g. in the United States and EU, has also contributed. The fact that heat pumps are considered as renewable heat in China and EU is also stimulating the market. In addition, technology-neutral performance requirements is pushing the development in the right direction e.g. Canada is considering mandating an energy performance greater than 1.0 for all heating technologies by 2030.

Policies need to play a stronger role in heat pump development
To conclude, even if the efforts done so far to speed up heat pump deployment are bearing fruits, more efforts will be needed to reach the Sustainable Development Scenario. Policies can and need to play a major role in different ways from now on and in the future.

One way is to reduce upfront purchase prices, by continued subsidy efforts, particularly in hard-to-reach market segments (e.g. renovation market). Therafter a progressive decrease of the amount of subsidies where heat pumps have proven cost-effective should be done.

Another way is to reduce operational costs by rethinking energy pricing to narrow the gap across electricity and natural gas prices. Moreover, increased R&D investment to foster innovation on next generation components and exploit the multiple services heat pumps can delivered (e.g. heat, cooling, hot water, flexibility, district energy, storage…) should be applied.

Heat pumps should be made a solution to building renovation, by deploying renovation packages which involves both building shell elements and equipment upgrades to reduce installation costs.

Finally, upcoming power system transformation needs can be anticipated in different ways. Possible synergy with on-site solar PV and storage should be exploited and heat pumps should be responsive to price signals so that they can participate in demand-side response markets.

Read the updated Tracking Clean Energy Progress Report (June 2020) here.