High costs slow widespread use of heat pumps, study shows

Although projections suggest a reduction of 20 to 25 per cent in installation costs by 2030, this falls significantly short of the targets set by UK policymakers, researchers say.

Domestic heat pumps currently play a marginal role in heating UK homes, experts say. The number of installations is growing, but remains low compared with traditional, fossil fuel-based heating systems.

Researchers say the findings highlight the need for policy aspirations to be based on realistic assessments of likely cost reductions, and to develop incentives that can address the relatively high upfront costs of some low carbon technologies.

As well as decarbonising home heating, advocates for heat pumps say they offer energy security and efficiency benefits, and can offer lower and more stable energy bills.

Researchers at the University of Edinburgh and Imperial College London used systematic evidence review techniques to analyse historic and forecast data for the installation costs of domestic heat pumps.

They included the different factors that can affect heat pump cost data such as the type of home, technology design and the wider heating system.

They also assessed equipment and non-equipment costs, and the factors affecting them such as international manufacturing supply chains and local labour markets.

They found there has been no significant reduction in the average installed cost of heat pumps over the past decade in the UK, while modest cost reductions were seen internationally.

However, there are prospects for reduced installed costs in the UK, they said. UK forecasts suggest a reduction in total installed costs by 2030 of around 20-25 per cent, with the anticipated savings higher for non-equipment costs -- through more efficient installations, for example -- than for equipment costs.

However, while there are prospects for reductions in installation costs, these reductions are unlikely to be on a scale and pace to match UK policy targets, the researchers say.

Dr Mark Winskel, of the University of Edinburgh's School of Social and Political Science, said: "While there is a growing policy consensus that heat pumps will pay a key role in decarbonising home heating, there are some stubborn economic challenges. Our research suggests the need for realistic expectations about heat pump installed cost reductions, and also, introducing targeted support measures to reflect their competitive running costs and wider benefits."

The study is published in the Journal Applied Energy. The research was undertaken as part of the UK Energy Research Centre research programme, funded by the UK Research and Innovation's Energy and Decarbonisation theme.