18 May 2017
Incentives, building regulations and energy prices all have a major impact on the heat pump market.
High electricity prices undermine the competitive advantage resulting from a heat pump’s efficiency.
Heat pumps are energy-efficient and can only increase their role in reducing heat related CO2 emissions as decarbonisation of the grid progresses.
Unfortunately less CO2 intensive electricity is also linked to rising residential electricity tariffs.
On their pursuit of a decarbonised grid European governments have, to varying degrees, supported sales of distributed energy generation systems, mostly in the form of Photovoltaics (PV).
The vast majority of the PV systems have been installed in the last 5-6 years and will start becoming due for replacement around 2025.
By that time, progress towards decarbonisation of electricity production is likely to push end user electricity prices to ever higher levels.
Governments and utilities will have a strong interest in maintaining the installed decentralised PV generation capacity, as this will account for fair share of the total electricity needs.
The expected push towards the replacement of installed Photovoltaics will represent an opportunity for heat pumps. Offered together with PV as a system they will become attractive to:
– end users – a low cost option for provision of heat and domestic hot water,
– utilities – a good tool to balance the smart grid demand/response system,
– governments – a way to make progress with the decarbonisation of heat within existing dwellings.
A combined PV and heat pump system where smart controls allow real-time communication with the electricity provider has a potential to become a win-win solution for all parties involved.