United Kingdom Heat Pumps Market Size

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.