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Heat Pumps

More efforts needed
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In this report

Almost 180 million heat pumps were used for heating in 2020, as the global stock increased nearly 10% per year over the past 5 years. Although some are reversible units that only partially cover space and water heating needs, growth is evident across all primary heating markets – North America, Europe and Northern Asia. Heat pumps have become the most common technology in newly built houses in many countries, but still only meet 7% of global building heating demand.

In the Net Zero Emissions by 2050 Scenario, the installed heat pump stock reaches 600 million by 2030. Further policy support and innovation will be needed to reduce upfront purchase and installation costs, remove market barriers for renovations, improve energy performance and phase out refrigerants with high global warming potential.

Installed heat pump stock by region and global Net Zero Scenario deployment, 2010-2030

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Tracking progress

Heat pumps continue to meet only a small share of residential heat demand (around 7% in 2020), while fossil fuel-based technologies made up nearly half of heating equipment sales globally in 2020.

Most heat pumps are installed in new buildings. In fact, in many countries, heat pumps register the highest market share of all heating technologies in newly built houses. In the United States, for example, the share of heat pump sales for newly constructed buildings exceeds 40% for single-family dwellings and is near 50% for new multi-family buildings.

The EU market is expanding quickly, with around 1.8 million households purchasing a heat pump in 2020 (12% annual average growth since 2015, and 7.5% growth relative to 2019, despite the pandemic). In 2020, Germany replaced Spain as one of the top three markets, thanks to 38 000 new sales. Together with France and Italy, it was responsible for nearly half of all sales in the European Union, while Sweden, Estonia, Finland and Norway have the highest market penetration rates, with more than 25 heat pumps sold per 1 000 households each year.

However, progress is still needed across the globe to boost uptake in existing buildings.

Air-to-air heat pumps have been rapidly becoming more widespread in recent years and now dominate global heat pump sales for new buildings. In the United States, for example, annual shipments expanded from 2.3 million units in 2015 to 3.4 million in 2020, with the growth rate in 2020 unchanged from previous years.

Several factors have raised the popularity of air-to-air heat pump technologies, including policy development, upgraded construction standards that make heat pumps in new buildings more competitive, and growing air-conditioning demand.

Sales of heat pump water heaters (for sanitary hot water production) have more than tripled since 2010, largely owing to purchases in China. Japan is the second-largest market for heat pump water heaters, although sales decreased slightly from 570 000 units in 2010 to 400 000 in 2015 (their lowest point in the last decade) but rose again to ~500 000 units in 2020.

Sales volumes in Europe are lower but are rising steeply, as 185 000 heat pump water heaters were sold in 2020, up from around 30 000 in 2010.

Ground-source heat pumps are less common globally, with annual sales of around 400 000. More than half of the installations are in the United States, where shipments and installations have more than doubled since 2010, partly owing to a 30% federal tax credit available during 2008-2016 and 2018-2021.

Sweden and Germany are the two main European markets for ground-source heat pumps, with Sweden having 650 000 units installed in 2020 and Germany 410 000. In fact, Sweden has the highest installation rate per capita globally.

Reversible air conditioners that can provide heating and cooling from the same device are very common in some countries, but this implies that heat pumps are not necessarily used as a building’s main heating source.

For instance, reversible air-to-air heat pumps (e.g. mini-split units) are widespread in urban northern China for summertime cooling, but more than 80% of the population in that region relies on district heating in the winter. In Japan, Korea, Europe, the United States and Australia, reversible heat pumps are commonly used for both heating and cooling.

The typical seasonal performance factor of heat pumps – an indicator of average annual energy performance – has increased steadily since 2010 to nearly 4 today for most space heating applications.

It is common to reach factors of 4.5 and up to 7, especially in relatively mild climates such as the Mediterranean region and central and southern China. Conversely, in very cold climates such as part of Canada, low outside temperatures could reduce the energy performance of currently available technologies to 3 on average over the winter season.

The transition from non-inverter to inverter technologies in recent decades has boosted efficiency. Today, inverter technologies avoid much of the energy loss that results from the stops and starts of non-inverter units, while also reducing the temperature lift for the compressor.

Regulations, standards and labelling, along with technology progress, have spurred improvement globally. For instance, the average seasonal performance factor of heat pumps sold in the United States rose by 13% in 2006 and 8% in 2015 following two increases in minimum energy performance standards. Raising standards and labels to keep up with technology progress in the key heating markets could help drive sales towards existing higher-end products. In the Net Zero Emissions by 2050 Scenario, the energy performance factor for heat pumps ranges from 4.5 to 5.5 by 2030.

Beyond regulatory updates, further improving the vapour-compression cycle (e.g. through next-generation components) would require system-oriented solutions (to optimise whole-building energy use) and the use of refrigerants with very low or zero global warming potential.

In 2020, electric heat pumps still met no more than 7% of heating needs in buildings globally, yet they could easily supply more than 90% of global space and water heating at a lower CO2 emissions level – even taking the upstream carbon intensity of electricity into account – than condensing gas boiler technology (which typically operates at 92-95% efficiency).

Thanks to continued improvements in heat pump energy performance and cleaner power generation, this potential coverage is a major improvement from the 2010 level of 50%. Rapid reductions in emissions from electricity supply in the NZE mean that 100% of the heat pump stock has lower emissions than natural gas-fired condensing boilers by 2025.

Air-source heat pump CO2 emissions reductions by country relative to the most efficient condensing gas boilers, 2020