Gas imports could be halved in ten years if UK matched Finland on heat pumps

Scandinavian countries like Finland and Norway, which have some of the coldest winter temperatures in Europe, exceed the UK’s sales by 40 and 33 times respectively, as the UK sold just 88 heat pumps per 100,000 people in 2022, to a total of 60,000. Installing heat pumps at the same rate as Finland, at 3,537 heat pump sales per 100,000 people, out to 2032 could also lower the UK’s total demand by a third (32%). [1]

Another example is in Norway, which produces gas domestically, where heat pumps have become the main source of heating with two-thirds of homes now using one [2]. If the UK installed at the same rate as Norway to 2032, imports could be 40% lower, the equivalent of 70% of the UK’s domestic gas use could be displaced leading to total energy demand potentially being lowered by around a quarter (28%).

The trend continues outside of Scandinavia, with almost all European countries outstripping the UK on sales of heat pumps partly in response to energy security concerns and higher bills during the gas crisis and Russian war in Ukraine. A relative newcomer to the heat pump market, France sold twelve times more heat pumps per 100,000 people than in the UK [3] in 2022, a rise of 30% from the previous year. This was backed by grants and other incentives such as tax relief. Installing heat pumps at the same rate as France could see UK imports reduced by a fifth (19%) and energy demand from homes reduced by a third (33%) by 2035.

Markets that have similar heating sources to the UK include the Netherlands, which relied on gas boilers for 92% of its home heating in 2019 compared to 85% of the UK’s homes today. The Netherlands has chosen to transition to electric heat pumps despite its natural gas reserves through the introduction of a phase-out on gas boilers in new builds in 2018 and in all homes from 2026 [4]. The ban was accompanied by financial incentives such as grants to households. In 2022, the Netherlands saw 642 heat pumps sold per 100,000 people, seven times that of the UK [5].

Already replacing up to 20% of gas boilers on the continent [6], electric heat pump sales are growing as countries seek to end reliance on foreign gas imports, bolstered by a growing European heat pump manufacturing base for example in Slovakia, Germany and Sweden [7]. Additionally despite high prevalence of heat pumps sales are still increasing, by 50% and 25% in Finland and Norway respectively between 2021 and 2022 [8], with lots of well-insulated homes that can be easily converted to using a heat pump. The International Monetary Fund has identified that the UK is the worst hit by the gas crisis in Europe, as homes are not very energy efficient, meaning that our dependency on gas is very high [9].

High levels of heat pups in these countries show that heat pumps are efficient year-round, with a recent Government study showing that heat pumps are highly efficient, at 2-3x more efficient than gas boilers, in the UK to -6C [10]. An earlier study also found that “There is no property type or architectural era that is unsuitable for a heat pump”, “from Victorian mid-terraces to pre-WWII semis and a 1960s block of flats”. [11]

The analysis shows sales of heat pumps in Poland have risen from just 40,000 in 2019 to 203,000, or 537 per 100,000 people, in 2022, which is an increase of 120% from the year before [12]. The UK installed six times less than Poland. Data for Czechia and Slovakia reveals sales of heat pumps are five and three times higher per 100,000 people than in the UK due to similar sales booms last year [13].

The US’s Inflation Reduction Act and EU’s Net Zero Industries Act prioritise both the manufacture and installation of the electric heating systems as a way to reduce demand for gas whose price as increased significantly. This led to sales growing by 15% in the US in 2021, with further growth expected for 2022 [14] as a result of incentives for installing the electric heating systems

The UK Government’s Boiler Upgrade Scheme (BUS), which aims to install 90,000 heat pumps over three years by offering a £5,000 grant for air source and £6,000 for ground source heat pumps, was launched in late May 2022 and will run until April 2025 [15]. Octopus Energy and British Gas have recently announced that they will reduce the costs of fully installed heat pumps, including the Boiler Upgrade Scheme grant, to £2,500 and £2,999 respectively [16].

In February 2023, around 2,800 heat pump installations were registered by the Microgeneration Certification Scheme (MCS), with the number of installers taking part in the BUS almost doubling from around 450 to 900 since the launch of the scheme [17]. Currently, heat pump manufacturing sites in the UK include those in Cornwall, Derbyshire, Northern Ireland and Scotland [18].