High heat pump costs could hinder UK adoption

The high cost of installing heat pumps for home heating could slow down people widely adopting the technology and leave government targets missed, research suggests.

There has been little to no reduction in the average installation cost of green heating systems over the past decade in the UK, a study shows.

Although projections suggest a reduction of 20 to 25 percent 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. 

The UK forecasts suggest a reduction in total installed costs by 2030 of around 20-25 percent, 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 play 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.”