The market for air/air heat pumps (A/A HP) has long been established – it is a global, high volume market selling well-tested products, primarily for cooling applications (and therefore usually referred to as ‘air conditioning’). But based on our recent research under the Electrification of Heat Service we believe there is significant untapped potential for A/A HP to be used for residential heating in Europe. In some market segments, A/A HP could even threaten the incumbent hydronic systems.
So why do we think the stars are aligning for A/A HP right now in the heating market, when the technology has been around for decades? Three reasons:
- Because there is a vast emerging opportunity in retrofit. At least 10 million homes across Europe have no central heating system. A/A HP are an ideal option to both decarbonise heat and reduce running costs in these homes, with relatively low investment costs, and simple installation compared to hydronic systems. So it is win/win for end-users and for policymakers. A/A HP are already established in this segment in some markets (e.g. the Nordics, France), where they are displacing or supplementing ‘dry’ electric heating and wood-burning stoves. Huge potential remains across the rest of Europe.
- Because A/A HP are going to be a critical part of the “future new build solution”. Reduced heat demand and higher air tightness are increasingly making non-hydronic systems the most economic heating solution, and driving increased focus on indoor environment & air quality (via active ventilation) and cooling – all of which A/A HP are well-placed to address. A/A HP are already being installed instead of hydronic space heating in some sectors of the new build market (e.g. in high-end multi-family homes in the UK, and some single-family homes in France), and as regulations tighten this opportunity will grow.
- Because cooling capability is becoming a must-have, even in heating-led markets, as the “heating market” becomes a “comfort market”. A/A HP plug a gap in many existing offerings, enabling providers to offer complete energy solutions (heating, cooling, hot water, and potential integration with other technologies). This is critical, given the growing demand for cooling, and the wider trends we see in the heating and energy market, transitioning from “product-based” to “service-based” offerings.
At Delta-EE, we already see some HVAC manufacturers and energy suppliers engaging in this market, but many are still watching and waiting. We believe now is the time to engage and prepare, both to capture the emerging opportunities, and to avoid losing out in some sectors.
To discuss the air/air HP research or wider heat research, please get in touch.