United Kingdom Heat Pumps Market Size
| Study Period | 2019 - 2029 |
| Base Year For Estimation | 2023 |
| Forecast Data Period | 2024 - 2029 |
| Historical Data Period | 2019 - 2022 |
| CAGR | 11.10 % |
| Market Concentration | Low |
Major Players
*Disclaimer: Major Players sorted in no particular order |
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United Kingdom Heat Pumps Market Analysis
The United Kingdom Heat Pumps market is expected to register a CAGR of 11.1% over the forecast period. The various government regulations and initiatives are fueling the demand for the heat pump market. Further, the increasing demand for energy-efficient solutions is driving the demand for the heat pump market.
- The global energy crisis is driving an increase in demand for heat pumps, thereby bringing energy security and climate benefits. As per IEA, global heat pump sales grew by 15% in 2021, twice the average of the past decade, led by the European Union, where they rose by around 35%. Sales in 2022 are further expected to hit a record level, especially in Europe, as some countries have witnessed double sales growth in the first half of 2022 as compared to the first half of 2021.
- The government is taking various initiatives to boost the deployment of heat pumps in the country. For instance, with an aim to reduce household use of greenhouse gases to net zero by 2050, the UK government has announced to encourage the installation of 600,000 heat pumps a year by 2028.
- Moreover, to support the transition of households to low-carbon heating, the government is planning to boost the funding of different schemes around the United Kingdom from 2022/23 to 2024/25. The government has planned to invest GBP 450 million (~553.28 million) into the new Boiler Upgrade Scheme, which will provide a grant of GBP 5000 (~ USD 6,147.52) for the installation of an air-source heat pump and GBP 6000 (~USD 7377) for ground source heat pumps. Such initiatives taken by the government are fueling the demand for the heat pump market in the country.
- Despite the growing inclination to heat pumps, the UK currently depends on gas systems to heat their homes. Estimations suggest that 85% of heating systems operating in the UK are gas boilers, and 1.5 million gas boilers are installed yearly. There are many factors restraining the purchase and distribution of heat pumps in the UK, including low running cost savings, high upfront costs, distribution network inadequacy, etc.
- The COVID-19 pandemic outbreak created economic turmoil for small, medium, and large-scale industries globally. Adding to the woes, a country-wise lockdown inflicted by governments across the world (to minimize the spread of COVID-19) further resulted in industries taking a hit and disruption in supply chain and manufacturing operations, as a large part of manufacturing includes work on the factory floor, where people are in tight contact as they collaborate to boost the productivity.
- The lockdown restrictions and closure of manufacturing plants, including the components, have further fueled the supply shortage trend. These effects were also reflected in the heat pump manufacturing market. However, many of these effects are short-term. Moreover, government precautions in the country to support industrial sectors are helping to revive industry growth.
United Kingdom Heat Pumps Market Trends
Air-Source Heat Pumps to Hold Significant Market Share
- The air source heat pump takes the electricity input, extracts the heat from the air, and gives hot water up to 90 degrees Celsius. Because of the extraction of heat from the ambient air, the ambient gets cooler. Resultantly, the need for hot water and cold air drives the growth of air-source heat pumps.
- There are two primary types of ASHP, air-to-water and air-to-air. An air-to-air heat pump absorbs heat from the outside air and transfers it into houses through a fan system to heat a room. The air-to-water heat pumps absorb heat from the outside air and transfer it via the central heating system to supply hot water heating, underfloor heating in an indoor space, or a radiator (or all three). Hence, choosing the type of ASHP determines the type of heat distribution system one necessitates.
- By 2035, all new boiler installations will be phased out in the country, and heat pumps will be in a prime position to fill the void. Around a quarter of a million UK homes are using heat pumps, and further, with initiatives like Boiler Upgrade Scheme, heat pumps are getting easier to afford by people in the country. For instance, homeowners in England or Wales can claim a GBP 5000 (~ USD 6,147.52)grant to help with the costs.
- The market is witnessing a lot of developments as researchers are trying to build a heat pump that is more efficient and cost-saving. For instance, in Dec 2022, Imperial College London scientists developed an air-source heat pump system to provide space heating and domestic hot water for single-family dwellings powered by solar. The system could facilitate cost savings of up to 39%.
- According to Energy and Industrial Strategy, electricity consumption in the United Kingdom has varied annually and seasonally, with demand consistently higher in the winter months, peaking each year in January. In November 2022, electricity consumption in the UK amounted to 24.3 terawatt hours.
Residential End-user Vertical to Hold Significant Market Share
- According to an extensive survey of more than 13,000 adults in Great Britain by the Office for National Statistics (ONS), titled 'Impact of the increased cost of living on adults across Great Britain: November 2021 to March 2022, with over 8 in 10 (83%) adults reported an increase in cost of living in March 2022 (3 to 13 March 2022) compared with 6 in 10 (62%) adults in November 2021 (3 to 14 November 2021).
- As utility bills and weekly shopping became expensive, the ONS conveyed that 34% of those reporting rising living costs said they were using less gas and electricity at home. In comparison, 31% said they were spending less on food.
- In a 2022 survey by the UK Department for Business Energy & Industrial Strategy found that 78% of the respondents use gas (central heating) to heat their property during the winter. While only 5% use electric (storage) heating and 5% employ oil (central heating).
- Currently, a significant percentage of UK households use gas boilers, making it one of the most carbon-intensive sectors of the economy. For instance, according to a 2021 study by the Institution of Gas Engineers and Managers (IGEM), the UK's home gas boilers emit twice as much CO2 as all power stations. The stat shows that home gas boilers collectively produce eight times as much nitrogen dioxide as the power plants in the nation.
- Given the situation, switching out fossil fuel heating with electric heat pumps and other low-carbon heating systems is key to the UK's plans to achieve net zero by the turn of the century.
United Kingdom Heat Pumps Industry Overview
The United Kingdom Heat Pumps Market is highly competitive. An increase in the need for energy-efficient solutions and technological advancements across the country provides lucrative opportunities in the market. Overall, the competitive rivalry among competitors is high. The major vendors operating in the market look for strategic investments to expand their market share. Some of the strategies adopted by them are as follows:
In Nov 2022, Kensa, a UK-based heat pump manufacturer, is upgrading its existing heat pump technology, which may be critical for the country's electricity infrastructure. The company has received funding from the UK Government funding from the Department for Business, Energy and Industrial Strategy (BEIS) to accelerate its development for mass market deployment.
In July 2022, FutraHeat, a UK-based startup, designed a high-temperature heat pump that uses waste heat from industrial processes to generate steam. The heat pump is electrically powered and can operate with zero CO2 emissions when powered by renewable sources.
United Kingdom Heat Pumps Market Leaders
IMS Heat pumps
Vaillant Group
Baxi Heating UK
Worcestor Bosch Group
Viessmann Group
*Disclaimer: Major Players sorted in no particular order
United Kingdom Heat Pumps Market News
- Aug 2022: Taurus Investment Holdings, LLC announced its new UK subsidiary, with the intent to invest up to GBP 50 million ( ~USD 62 million) of equity in 2022. The Project will be a sustainable development incorporating energy-efficient measures that target significantly reduced carbon emissions, including the use of cross-laminated timber, air-source heat pumps, and solar PV panels.
- April 2022: The Heat Pump Association received funding of GBP 30 million (~USD 37 million) from UK Energy Security Strategy to accelerate the production of heat pumps. The funding will be used to make the technology widely available across the UK.
Table of Contents
1. INTRODUCTION
1.1 Study Deliverables
1.2 Study Assumptions
2. RESEARCH METHODOLOGY
3. EXECUTIVE SUMMARY
4. MARKET INSIGHTS
4.1 Market Overview
4.2 Industry Attractiveness - Porter's Five Forces Analysis
4.2.1 Threat of New Entrants
4.2.2 Bargaining Power of Buyers/Consumers
4.2.3 Bargaining Power of Suppliers
4.2.4 Threat of Substitute Products
4.2.5 Intensity of Competitive Rivalry
4.3 Industry Value Chain Analysis
4.4 Assessment of Impact of COVID-19 on the market
5. MARKET DYNAMICS
5.1 Market Drivers
5.1.1 Recovering Office Space Demand and HVAC Retrofits
5.1.2 Government Regulations and Initiatives
5.2 Market Restraints
5.2.1 Presence of Cheaper Legacy Technologies
5.2.2 Semiconductor Industry Shortages
6. MARKET SEGMENTATION
6.1 Product Type
6.1.1 Air-source Heat Pump
6.1.2 Ground/Water-source Heat Pump
6.2 Installation Type
6.2.1 Retrofits
6.2.2 New Buildings
6.3 End-User Vertical
6.3.1 Commercial
6.3.2 Residential
6.3.3 Industrial
7. COMPETITIVE LANDSCAPE
7.1 Company Profiles
7.1.1 IMS Heat pumps
7.1.2 Vaillant Group
7.1.3 Baxi Heating UK
7.1.4 Viessmann Group
7.1.5 Worcestor Bosch Group
7.1.6 Ideal Boilers
7.1.7 Zehnder Group
7.1.8 Daikin Airconditioning UK Ltd
7.1.9 Danfoss
7.1.10 Kensa Heat Pumps
- *List Not Exhaustive
8. INVESTMENT ANALYSIS
9. MARKET OPPORTUNITIES AND FUTURE TRENDS
United Kingdom Heat Pumps Industry Segmentation
Heat pumps are machines that transfer heat energy from a heat source to a thermal reservoir, moving heat energy in the opposite direction of spontaneous heat transfer by absorbing heat from a cold space and releasing it into a warmer space. The market for the study defines the revenues generated from the sale of Heat Pumps. Moreover, various end-user industries tracked for market estimations include industrial, commercial, and residential, among others. The market also covers the major factors impacting the growth of the Heat Pumps market in terms of drivers and restraints. The market sizes and forecasts are provided in terms of value (USD million) for all the above segments.
| Product Type | |
| Air-source Heat Pump | |
| Ground/Water-source Heat Pump |
| Installation Type | |
| Retrofits | |
| New Buildings |
| End-User Vertical | |
| Commercial | |
| Residential | |
| Industrial |
Frequently Asked Questions
What is the current United Kingdom Heat Pumps Market size?
The United Kingdom Heat Pumps Market is projected to register a CAGR of 11.10% during the forecast period (2024-2029)
Who are the key players in United Kingdom Heat Pumps Market?
IMS Heat pumps, Vaillant Group, Baxi Heating UK, Worcestor Bosch Group and Viessmann Group are the major companies operating in the United Kingdom Heat Pumps Market.
What years does this United Kingdom Heat Pumps Market cover?
The report covers the United Kingdom Heat Pumps Market historical market size for years: 2019, 2020, 2021, 2022 and 2023. The report also forecasts the United Kingdom Heat Pumps Market size for years: 2024, 2025, 2026, 2027, 2028 and 2029.
United Kingdom Heat Pumps Industry Report
Statistics for the 2024 United Kingdom Heat Pumps market share, size and revenue growth rate, created by Mordor Intelligence™ Industry Reports. United Kingdom Heat Pumps analysis includes a market forecast outlook to for 2024 to 2029) and historical overview. Get a sample of this industry analysis as a free report PDF download.
