Authors and contributors
IEA (2019), "Tracking Buildings", IEA, Paris https://www.iea.org/reports/tracking-buildings
Heat pumps continue to represent a small share of total residential heating equipment, as more than three-quarters of sales globally were for fossil fuel or conventional electric technologies in 2018.
At the same time, global heat pumps sales did rise by nearly 10% between 2017 and 2018 – double the 2016‑17 growth rate.
Nearly 80% of new household heat pump installations in 2017 were in China, Japan and the United States, which together account for around 35% of global final energy demand for space and water heating in residential buildings.
Europe’s market is expanding quickly, however, with around 1 million households purchasing a heat pump in 2017, including heat pumps for sanitary hot water production (135 000 units).
Sweden, Estonia, Finland and Norway have the highest penetration rates, with more than 25 heat pumps sold per 1 000 households each year.
Air-to-air heat pumping technologies dominate global sales for buildings, but purchases of other heat pump types such as air-to-water and geothermal heat pumps have also expanded in recent years.
Heat pump water heaters
For example, sales of heat pump water heaters (for sanitary hot water production) have more than tripled since 2010, largely driven by purchases in China. Subsidies to replace coal boilers with air-to-water heat pumps through the Coal to Electricity programme in northern China helped raise sales to reached 1.3 million units in 2017.
Japan is the second market by size, although sales decreased slightly from 570 000 units in 2010 to 450 000 in 2017. Volumes in Europe are lower but rising steeply, as sales have nearly quadrupled since 2010.
Ground-source heat pumps
Ground-source heat pumps (GSHP) are less common globally, with annual sales of around 400 000 units. More than half of installations are in the United States. Sweden and Germany are the two main European markets, with 20 000 to 30 000 GSHPs sold every year in each of those countries. In fact, Sweden has the highest GSHP installation rate per capita globally.
Reversible heat pumps
Heat pump purchases are on the rise overall, but this appears to be driven mainly by growing demand for space cooling. Reversible air conditioners that can provide heating and cooling from the same device are very common in some countries but are not necessarily used as a building’s main heating source.
For instance, reversible heat pumps (e.g. mini-split units) are widespread in northern urban 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 and the United States, reversible heat pumps are commonly used for heating and cooling, which often means higher heat pump performance (i.e. a seasonal efficiency factor of 4-6 or higher for heating), as reversible units typically include an inverter to modulate capacity. The adjustment of the refrigerant flow rate reduces energy losses resulting from stops and starts in non-inverter technologies.
The typical efficiency factor of heat pumps – an indicator of average annual energy performance – has increased steadily since 2010, approaching an estimated 3 today across the main heat pump markets. It is common to reach factors of 4 or 5 or higher, especially in relatively mild climates such as the Mediterranean region and central and southern China.
Conversely, in extremely cold climates such as northern Canada, low outside temperatures reduce the energy performance of currently available technologies to a factor of 2 or less (depending on the ambient temperature) – although this is still twice as efficient as an electric resistance heater or a condensing gas boiler.
Regulations, standards and labelling, along with technology progress, have spurred improvement globally. For instance, the average efficiency 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.
Electric heat pumps still meet less than 3% of heating needs in buildings globally, yet they could supply more than 90% of global space and water heating with lower CO2 emissions – even when the upstream carbon intensity of electricity is taken 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%.
Heat pumps could already supply 90% of heating needs globally with a lower CO2 footprint than condensing gas boilers.
Energy efficiency programmes specific to heat pumps
In China, subsidies under the Air Pollution Prevention and Control Action Plan are helping reduce upfront installation and equipment costs. A similar scheme exists in Japan through its Energy Conservation Plan.
Regulations and labelling on heat pump energy performance
The United States mandates that products be labelled with a seasonal performance factor for heating as well as minimum energy performance standards for heat pumps.
In addition to mandatory standards, European seasonal space heating performance labels use the same measures and scale for heat pumps as for fossil fuel boilers, making it possible to directly compare their performance.
In China and the European Union, the energy source used by heat pumps can also be considered as renewable heat, which opens access to other incentives such as tax rebates.
Technology-neutral performance requirements
Canada is considering mandating energy performance greater than an efficiency factor of 1 for all heating technologies by 2030, which would effectively prohibit all conventional coal-, oil- and gas-fired boilers.
The share of residential heat supplied by heat pumps globally needs to triply by 2030. Policies therefore need to address barriers to adoption, including high upfront purchase prices and operational costs.
In many markets, installed costs for heat pumps relative to potential savings on energy spending (e.g. when switching from a gas boiler to an electric heat pump) often mean that heat pumps may be only marginally less expensive over 10-12 years, even with their higher energy performance.
This is reflective of higher electricity prices in many major heat markets, as electricity costs twice as much as natural gas on average globally. In fact, it can be at least three times more expensive than natural gas in some markets.
To triple the share of residential heat supplied by heat pumps globally, policies need to address unfavourable fuel prices. High electricity prices and higher upfront costs still represent major barriers in most markets, part of which is due to fossil fuel subsidies and electricity taxes. Electricity prices (in USD per kWh equivalent) globally are around twice as high as natural gas prices, and can be as much as three or more times higher in some markets.
Harmonising definitions relating to heat pump performance would make global benchmarking less challenging, given the current diversity of testing procedures and definitions. Definitions currently change from region to region, whereas definitions for conventional heating technologies such as natural gas boilers are more consistent.
Energy performance definitions can also be expanded to minimum performance requirements.
For example, the European Union introduced a seasonal coefficient of performance (SCOP) in its 2009 Ecodesign legislation. It measures efficiency in primary energy terms, and since 2017 only air-to-water and GSHPs that exceed a minimum efficiency of 115‑125% based on primary energy use (comparable to a SCOP of 2.875) have been allowed to be sold. For air-to-air heat pumps, the European minimum requirement is a SCOP of 3.8.
Standards and labels should also evolve to reflect heat pump performance in the wider market, rather than comparing heat pumps with themselves.
For instance, the EU Energy Label Regulation sets the ‘A’ label for energy performance at the minimum primary-to-final energy ratio of 0.92, which applies to condensing boiler technology. More ambitious and comparable standards across equipment types would encourage greater uptake of heat pumps, including gas-driven ones (with a typical energy performance factor of above 1).
Other policy signals, such as carbon intensity expectations for heating equipment, would also encourage greater heat pump adoption.
Heat pumping technologies for space heating already exist and will deliver significant efficiency improvements and considerable CO2 emissions reductions in many countries.
Innovation could help to address some known market issues, including high upfront prices and a lack of adaptability to multiple building contexts (e.g. multi-family residential buildings with limited outdoor space for exterior heat pump units). While packaging products can increase marketability, multiple synergies with other energy technologies such as solar PV and district heating networks could also be exploited to enhance system flexibility and efficiency.
Greater electrification of heat (and other end uses such as space cooling) will place greater pressure on electricity systems, requiring not only improved energy efficiency but also greater flexibility through demand-side response. Markets with high shares of electric heating (e.g. France) illustrate the impact of electric heat demand during the winter and on extremely cold days. Heat pumps with high energy performance factors can help reduce the overall tendency of demand peaks, but flexibility through demand side response will still be required to shift some demand to off-peak hours.
In addition, heat pumps have the potential to provide electricity grid stabilisation in the context of grid decarbonisation, especially with increasing shares of variable renewables in the energy mix.
Increasing heat pump attractiveness would buttress the clean energy transition, ensuring good heating equipment efficiency that can be employed affordably in different building applications and with other clean energy technologies such as solar PV and energy storage. Further R&D investments would address many barriers to heat pump deployment by making them more compact, easier to install, more efficient, less carbon-intensive and more flexible than conventional heat pumps through enhanced interactions with the grid.
While extremely efficient, GSHPs are more expensive than other heat pump systems primarily due to installation costs, though these vary depending on the type of installation (e.g. shallow vs. deep drilling). Their reaction time to rapid or extreme temperature changes can also be long.
Geothermal technologies could help overcome multiple barriers to the decarbonisation of heating and cooling, such as increasing system efficiency by providing heating and cooling services at the same time, since commercial buildings often have simultaneous heating and cooling demand. Residential buildings can also have cooling demand at the same time as domestic water heating needs (e.g. during the summer).
- EHPA (European Heat Pump Association) (2018), "Market report 2018", https://www.ehpa.org/.
- Zhao, H., Y. Gao and Z. Song (2017), "Strategic outlook of heat pump development in China", 12th IEA Heat Pump Conference 2017, http://hpc2017.org/wp-content/uploads/2017/05/O.2.1.1-Strategic-outlook-of-Heat-pump-development-in-China.pdf.
- JRAIA (Japan Refrigeration and Air Conditioning Industry Association) (2018), "Air-conditioner sales in the world", https://www.jraia.or.jp/statistic/index.html.
Caroline H. Stignor (Heat Pump Centre), Anette Ingemarson (Heat Pump Centre), Monica Axell (Heat Pump Centre), Stephan Renz (HPT TCP), Roger Hitchin (HPT Delegate), Daniel Mugnier (SHC TCP)