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With the Chancellor’s recent announcement that fossil fuel heating could be banned in all new homes built after 2025, there will no doubt be significant opportunity for low carbon heating into the future. However, while we wait with anticipation for building regulations to be updated, there is still strong potential for growth in UK heat pump market.

Delta-ee recently reviewed the opportunities and barriers for heat pumps to assess how the market is likely to develop over the next few years. Despite the uncertainties surrounding future support for heat pumps after the Renewable Heat Incentive ends in 2021, and the potential negative impacts of Brexit on the heating market (however that might eventually pan out!), our central forecast foresees the UK heat pump market doubling in size by 2025.

Increasing uptake in the new build market will be the main driver for this growth, supported by some large-scale shared ground loop projects and increased confidence in hybrid heat pumps. Though we believe growth could be more than twice as high to 2025 with the right policies and regulations – and if fossil fuel heating is then banned in new builds, we could see the market really take off from 2025 onwards.

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Where will the new sales come from?

There are a number of trends across key customer segments that will drive the market to 2025:

And what next?

Demand response applications have already been demonstrated by trials such as the Freedom project, and the introduction of more time-of-use tariffs and heat-as-a-service offerings will certainly also be beneficial for the heat pump market. We don’t see these being significant market drivers before 2025 in our central forecast, but we do expect smart electric heating and innovative business models – along with updated building regulations – to play an important role thereafter.

Find out more

To find out more about Delta-ee’s low carbon market forecasts and our electrification of heat research, please get in touch with Roxanne Pieterse on our Heat Insight Service or Cate Lyon on our Electrification of Heat Service.