The European Heat Pump Association’s latest market report showcases the positive impact heat pumps are having across Europe to mitigate emissions and grow European economies. We welcome these figures and believe the UK can afford to be equally ambitious provided the Government takes swift and decisive action to support the market.
Across Europe, rapid heat pump rollout has meant the 19.75 million systems installed across the continent has avoided 52.3Mt CO2e emissions per year, roughly the entire annual emissions of Greece.
The report also shows that heat pump systems are versatile, working efficiently even in colder climates.
In addition, the European heat pump industry is now employing over 160,000 people, with around 37% in manufacturing. These insights demonstrate how the transition to low carbon heating is supporting growth in the future workforce.
The UK is showing progress and our figures for the first half of 2023 project a growth in heat pump sales by around 10% based on 2022 figures. However, the UK is still falling behind, with one of the lowest heat pump penetration rates across Europe despite high forecasted growth.
The report clearly shows a statistically significant correlation between decreases to the ratio of gas to electricity prices and increases to heat pump sales. For example, in 2022, the ratio of electricity to gas prices in the Netherlands decreased significantly compared to 2021 resulting in the heat pump market almost doubling.
Considering the importance of energy prices, it is concerning that the UK has one of the highest ratios of electricity to gas prices out of 27 countries analysed in the report. The ratio from the July 2023 price cap, 4.01, is far higher than the ratio of 2 that the EHPA see as necessary to incentivise consumer demand.
Within the Powering Up Britain announcements, the Government confirmed that it would set out plans during 2023-2024 to rebalance gas and electricity costs with the aim of making electricity bills cheaper to support the speeding up of electrification for households and businesses. We fully support this commitment and will be working closely with the Government over the coming months to support thinking in this space. We are calling on them to act swiftly to provide industry with the clarity and confidence needed to invest and grow the market.
The Heat Pump Association are members of the European Heat Pump Association.
Whilst heat pumps sales have grown year on year in the UK, total sales when compared with our European counterparts are low. We believe the UK Government’s projected deployment target of 600,000 heat pumps installations per year by 2028 remains achievable provided it moves swiftly and decisively to introduce the Future Homes Standard, provide early clarity of a date for the full phase out of 100% fossil fuel boilers, and takes steps to reduce the price of electricity.
Our members are clear that the price of electricity relative to gas is a critical factor, and we support the EHPA’s view that electricity prices should be no more than twice those of gas.
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