UK Heat Pump Market Growing Again

UK Heat Pump Market is Growing Again

BSRIA’s World Market Intelligence Division have reviewed the current growth of the UK heat pump market. The latest BSRIA research shows that around 22,000 heat pumps were installed in the UK in 2017; representing an 18% increase from 2016.

This increase comes after five years of almost continuous market decline. This decline was caused by a number of factors including the economic slump, the low price of oil, the uncertainty around the Renewable Heat Incentive (RHI) programme, the Brexit outcome and the concerns around the GBP to EUR exchange rate.

Rising Oil Prices

In 2017 the overall market background changed. Oil prices rose to their highest level for the last three years, and the RHI programme lifetime was extended to 2021, offering significantly increased tariff rates for heat pumps. Product awareness is also up significantly, owing to TV programmes and advertising.

Oil Prices For The Last 24 Months [source: www.boilerjuice.com 17-09-2018]

What Does This Mean?

Market progress is definitely good news for the industry and for the environment, The government has always seen heat pumps as an important technology in its carbon reduction policies.

The RHI was introduced by the government in November 2011 (for non-domestic units) and in April 2014 (for domestic units) to support households, businesses, public bodies and charities in transitioning from conventional forms of heating to renewable alternatives, including heat pumps.

It is understood that the government’s solutions to meet UK heat demand and achieve its legally binding climate change targets, are:

• A commitment to building and extending heat networks in urban areas.

• Development of “green gas”, hydrogen or biomethane, that will replace natural gas in the existing grid, assuming that this low-carbon gas can be deployed at scale.

• Shift away from conventional oil-fired heating to heat pumps in the off-gas areas.

Around 3.6 million homes in England and Wales are currently off the mains gas grid. Of those, around 2 million use electric heating (mostly old- fashioned electric storage heaters) and 1 million use oil heating – of which half are non-condensing. The vast majority of those dwellings would see significant and immediate financial benefits from the installation of a heat pump.

What Next?

The government needs to make many of its key decisions to actively promote the decarbonisation of UK’s buildings over the next two years. Its Clean Growth Strategy is viewed as a positive signal of intent that could see a significant uptake of heat pumps in the UK.