Domestic hot water heat pumps – An electrifying outlook!
Domestic hot water heat pumps: A growth engine for the HP market – and showing no signs of stopping
Domestic hot water heat pumps (DHW HPs) have in the last 2-3 years been the only sector of the European heat pump market to have grown significantly. Against a backdrop of the recent economic crises, a sluggish building sector, and a stagnating heat pump market, DHW HPs have been doing extremely well. The market has more than quadrupled over the last five years, to over 60,000units/year across Europe.
We expect the growth of DHW HPs to continue over the next five years (albeit at a slightly slower rate than we have seen so far), with the market at least doubling in size by 2017. Some estimates by important market players are even more optimistic, expecting the market to more than triple over the same period.
The replacement of direct electric water heaters represents huge untapped potential
The largest part of the DHW HP market today – and one of the key opportunities for future market growth – is the replacement of direct electric storage water heaters in existing buildings. With more than 3 million of these systems installed per year in France, Germany and the UK alone, and an installed base well in excess of 10 million in these markets, the opportunity is massive. Taking only a small share of this large potential would significantly boost the DHW HP sales figures across Europe.
Several factors indicate increasing customer pull for DHW HPs to replace direct electric water heaters over the next five years, driven by an increasingly attractive customer proposition:
- DHW HPs are already a relatively low upfront cost way of reducing energy bills – they can be installed for a price in the range of €2-3,000 - a fraction of the cost of space heating heat pumps or other renewables.
- Rising electricity prices, as well as improving HP efficiencies, will further increase the running cost savings to be achieved by DHW HPs over a direct electric water heater.
- The entry into force of the Ecodesign requirements for water heaters will see manufacturers of direct electric water heaters having to significantly increase the insulation of their systems, which will otherwise be banned from the market. This will result in rising upfront costs for direct electric water heaters, making payback periods of DHW HPs against direct electric systems even shorter than they are today.
- The introduction of the energy label for water heaters in 2015 is for the first time going to give customers comparable information on the efficiency of their water heaters, clearly showing the advantages of DHW HPs.
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