HPA welcomes encouraging signs in heat pump sector

The Heat Pump Association (HPA) has reaffirmed its belief that there is plenty of room for further growth within the heat pump sector.

In the commercial air conditioning sector, reverse cycle, heating and cooling heat pump systems are in fact dominant, particularly air-to-air. However, heating only heat pumps, designed essentially for the domestic/residential central heating market, while growing in demand, are only scratching the surface of the sector.

In the domestic sector alone there are some 2.5 million dwellings off the gas grid with a deployment level of heat pumps below 10%. One million homes use oil and are therefore exposed to the price volatility of that market.

The HPA recognises that some of the previous quarter-on-quarter figures have not been as encouraging as the industry had hoped for. However, according to the latest quarterly figures this trend may have bottomed out, possibly aided by the fact that oil prices appear to be on a steady rise for the foreseeable future and concerns over changes to the Renewable Heating Incentive (RHI) funding have been replaced by announcements of increased tariffs and budgets confirmed until April 2021. This provides added confidence and largely improved financials.

The HPA believes that the EU referendum and subsequent change in government departments and ministerial positions caused some anxiety. However, as the dust continues to settle the scene is becoming ever clearer. Hence there are indications that over the last few months the market for heating only heat pumps has picked up significantly.

Mike Nankivell, President of the Heat Pump Association, observed: “The recent report from the Committee on Climate Change - Next steps for UK heat policy - made it very clear that as far as government policy is concerned well performing heat pump systems are a key part of government long-term strategy and described them as ‘low regret’ i.e. is most likely that a recipient will be pleased with the performance of the heat pump whether this is to provide better comfort and/or low running costs.

Mr Nankivell continued: “The report recognised the financial case is currently weak when compared with natural mains gas but that this could also change if carbon dioxide is ‘costed’ in to the utility tariffs. It points to hybrid heat pumps as a potential transition to deployment of Heat pumps in ‘on Gas Grid’ areas, although it recognises the capital cost of these types of installation.

“The hope is for some 200,000 heating only heat pump installations in the period 2016 to 2020/21 via the RHI scheme. This requires 40,000 installations per year and is certainly aspirational.”

22-02-2017