Many other factors are contributing to the positive outlook for heat pumps:
Legislative requirements, electrification of buildings, “greening” of electricity, better awareness, information, and availability of heat pumps, but also insurgence of new business models that propose “heat as a service”; they all drive consumers’ interest.
The four-year outlook for heat pump markets post-COVID has therefore improved. Governments' commitments and consumer interest are good news and, if sustained, will provide a solid base for a true “decade of heat pumps”. However, there are other factors that need to be focused on too for this to happen.
Financial ability to buy a heat pump is key to market growth but so is the availability of a sufficient number of well-qualified installers. Customers need reassurance of being able to get a skilled professional at a reasonable cost when the need arises. Those are still lacking in many countries and government as well as industry intervention is needed to rectify the issue.
Time is money or rather margin for installers, of which many do not still see a viable business in installing heat pumps, as their installation is often complex and prone to numerous interventions. Besides, ease of installation and maintenance are of importance for installers as well as for a homeowner.
Energy prices are another factor that impact upon ultimate consumer satisfaction. While electricity is getting “greener”, its price for the domestic end user hand increased continually over the years, making it difficult to provide a credible long-term business case for heat pumps.
In Europe, the average electricity price for a residential consumer was 20.5 cents per kilowatt hour in 2019, against the average price of 16.8 cents per kilowatt hour 10 years ago. Although the cost of renewable energy generation is decreasing, its delivery to consumers is getting more costly and the residential electricity price outlook does not point towards a change in this trend.
Delivery of “heat as a service”, variable electricity tariffs and efforts to curtail taxes seen in some countries in 2019, help mitigate this trend, but they are by far an uncommon approach in Europe, which is the second most important heat pump market worldwide.
Without a doubt, heat pumps are among key technologies able to help transition towards net zero carbon buildings. Legislation increasingly supports their use in new build, and financial incentives promote their use in the accelerating retrofit market. The battle is however not won yet. Governments' commitment needs to meet customer demand on a larger scale. It is set to grow but care needs to be given to nurturing customer confidence and trust that both increase when the delivery of this technology’s big promise of providing climate friendly, affordable, easy to manage thermal comfort is ensured by a wide range of trusted professionals. Structured training programs but also experience and knowledge sharing platforms are needed to build this. Governments and the industry need to look at heat pumps from a wider perspective, not just as a technology that helps deliver the net zero carbon target but also one that needs to deliver customers satisfaction. Just a dream? Not really. With the common target fixed, collaboration can make it happen.