UK heat pump market is growing again
6th April 2018 | Residential Energy
The latest BSRIA research indicates that around 22,000 heat pumps were installed in the UK in 2017, which represents an increase of 18% in volume compared to the previous year. This increase comes after five years of almost continuous market decline that has been caused by 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 pound to Euro exchange rate.
In 2017 the overall market background changed, with oil prices at the highest level for the last three years and the RHI programme lifetime extended to 2021, offering significantly increased tariff rates for heat pumps. Some heat demand limits have been introduced later in the year giving a boost to the market of high heat demand projects from the middle of the year.
Product awareness is also definitely up, owing to TV programmes and to advertising.
Market progress is definitely good news for the industry and for the environment, however, it is important to note that the number of units sold is nowhere near where they were expected to be 10 years ago – of at least 100,000 units needed for the market to sustain itself without the help of subsidies. The main barriers have persistently been the cost of investment and the disruptive installation in case of the system refurbishment.
The government has for too long seen heat pumps as an important technology in its carbon reduction policies. But an air-source heat pump investment cost is on average twice as much as for a condensing boiler and a ground-source heat pump costs twice as much as an air-source one.
RHI was introduced by the government in November 2011 (for non-domestic units) and in April 2014 (for domestic ones) to support households, businesses, public bodies and charities in transitioning from conventional forms of heating to renewable alternatives, including heat pumps. While it has arguably had a positive impact on the industry, the sales suggest that it is still far from delivering a real change.
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