In EU households, 62.8% of energy consumption is for space heating, and another 15.1% for water heating, mostly powered by fossil fuels. Heating and cooling is responsible for 52% of final energy demand in Europe. So, with REPowerEU, the EU has once again strengthened support for heat pumps to achieve energy independence and climate goals. Heat pump sales in Europe grew by an unprecedented 34% in 2021, thanks to a total 2.18m heat pump units sold. But the EU’s 16.98m installed heat pumps (around 14% of the heating market) needs another 50m installed by 2030 to meet electrification and decarbonisation targets. Helena Uhde at ECECP looks at a heat pump success story, the small village of Hallstatt in Austria, before broadening out to understand what drives purchasing decisions. It’s not just about subsidies to cover the high up-front costs. Consumers are much more likely to buy if they are educated on lifetime savings, how to use the units efficiently, easy access to advice and the options, and transparent costs. Different countries will need different strategies to encourage consumers to switch to these more efficient and sustainable heating systems.
According to the IPCC Sixth Assessment Report on how to mitigate climate change, electrification in place of fossil fuels is required in the EU-28 in order to to achieve net carbon neutrality. Heating and cooling has a special role to play on this pathway, as the sector is responsible for 52% of final energy demand in Europe.
In EU households, for example, 62.8% of energy consumption is for space heating, and another 15.1% for water heating (Fig. 1). Heat pumps can play a central role in replacing fossil fuel-based heating technologies.
According to the IEA’s ʽnet zero by 2050ʾ scenario, the number of installed heat pumps in households globally would need to increase from 180 million in 2022 to 660 million in 2030 and 1.8 billion in 2050 to reach net zero by 2050, which is consistent with efforts to limit the long-term increase in average global temperatures to 1.5 °C.
REPowerEU, the EU’s plan to reduce dependence on Russian fossil fuels and fast forward the green transition, proposes ‘doubling the use of heat pumps and measures to integrate geothermal and solar thermal energy into modernised district and local heating systems’.
In fact, heat pump sales in Europe grew by an unprecedented 34% in 2021. According to the European Heat Pump Association (EHPA), 2.18 million heat pump units were sold – almost 560,000 more than in 2020. However, overall in the EU there are about 16.98 million installed heat pumps, representing around 14% of the heating market – not enough to reach the electrification and decarbonisation targets.
The principle of the heat pump is by no means new. As early as 1852, William Thomson (also known as Lord Kelvin) describes the theory of the heat pump, and only five years later Peter von Rittinger had developed and built the first heat pump. As of today, heat pumps are widely understood to be a cost effective and sustainable space and water heating system. So how is it that this technology, which builds on the renewable energy sources and surplus energy from industrial processes, only now seems to be finding a large sales market?
Hallstatt, Austria – a model village for heat pump uptake
A village that has been benefiting from heat pumps for 40 years can be found in the Austrian Salzkammergut. About 70 km from Salzburg, Hallstatt has about 700 year-round residents who started installing heat pumps in 1983. Since then, about 130 heat pumps have been approved and installed. Almost all municipal buildings in the community, such as the community hall, culture house, primary schools and fire station have heat pumps installed. Several systems have a high heating capacity of up to 150 kW. What lies behind this success story?
First of all, Hallstatt is particularly suitable for heat pumps for several reasons. For one thing, the climate is relatively balanced. Because the nearby lake warms and cools the air, temperatures are mild in summer and winter. The moderate air temperature is particularly favourable for air-source heat pumps, while the huge groundwater deposits (Hallstatt lies in a karst landscape) make the region suitable for water-source heat pumps. The move to heat pumps has been a welcome alternative for the village: there is no natural gas or other municipal heat supply and fuel transport is problematic in the densely built-up area.
Furthermore, the village has accumulated a wealth of experience with heat pumps over the years and local experts are very approachable in a small community where everyone knows their neighbour. Heat pump expert Karl Heinz Wirobal of the World Heritage Museum in Hallstatt knows how to explain heat pumps in a simplified way so that even residents who are not interested in heating systems quickly understand the concept. ‘Every compressor refrigerator is an air heat pump. You extract the heat from the air in the room – it gets colder in the refrigerator and the heat is released again behind the refrigerator. We use the same principle for heating.’
Wirobal himself has had a heat pump in his home since 1986: ‘I have known about the principle of the heat pump for a long time, but until the beginning of the 1980s I didn’t do the calculations. I originally used wood for heating, then coal. And why should you be interested in something that requires new investment? But then I had to change my heating system and I started doing the maths.’
Thus, heat pump systems have proven their worth and the cost analysis has so far confirmed the economic advantage of the heating system. ‘I can only recommend cost-checking a heat pump and comparing it with other energy sources,’ clarifies Wirobal. ‘Until recently, we benefited from low energy prices, yet heat pumps were cheaper than most other energy sources. How it will be in the future, when electricity becomes very expensive, is another question. But other energy sources are also becoming more expensive, so you have to calculate that carefully. The heat pump itself also costs something, of course. Nevertheless, I believe that the heat pump will also be cost-effective in the near future.’
As a newspaper clipping from Hallstatt’s local news shows (Fig. 2), the municipality published a cost comparison of four different heat pump installations back in the 1990s. The two water heat pumps, one ground source heat pump and one air source heat pump were installed locally for heating and hot water, including the water heat pump installed in Wirobal’s house. Although the thermal insulation of the house was described as ‘poor’ at the time, resulting in higher energy consumption, the heat pump does not perform badly.
The successful track record with heatpumps, availability of approachable experts and transparent information on the different technologies and costs seem to have convinced the whole village. In relation to the number of inhabitants, Hallstatt is today probably the municipality with the highest proportion of heat pumps in Austria.
Access to information plays a decisive role
Several studies have shown that easy access to information plays a decisive role in switching behaviour to energy efficient heating applicances. Objective information may even be considered more important than price.
Outside Hallstatt, however, it seems difficult to persuade customers to change their heating system. A study commissioned by Denmark based pump manufacturer Grundfos found that as many as 33.3% of respondents who bought a boiler had considered a heat pump. The main considerations when deciding on a heating system were energy consumption, running costs, energy class/efficiency and purchase and installation costs. 74.3% of respondents stated that energy labels played a role in the decision-making process.
Energy efficiency labelling
A Spanish study has also identified energy efficiency labelling as a core factor that significantly influences behaviour when switching to an energy efficient heating appliance. In addition, potential savings, operation and maintenance costs as well as green self-image are decisive factors. The authors recommend facilitating access to information, as well as highlighting the energy classification of the appliance, offering information about energy and cost savings to the public as well, and also encouraging a switch to an energy-efficient heating appliance by providing initial subsidies. Furthermore, the population as whole needs to have a strong sense of green self-identity..
The importance of information not only before installing a heat pump, but also during its operation is shown by a survey of heat pump users in England. While most users were satisfied with the reliability, heating, hot water, warmth and comfort of their system, the study also showed that a better understanding of their heat pump system was linked to higher system efficiency. Conversely, a lack of consumer understanding of heat pumps led to complaints about under- or overheating, slow heating and/or high fuel bills.
Marketing strategy depends on where you live
However, what kind of information should be focused on when signalling the benefits of heat pumps to consumers may vary in different EU Member States. A 2017 study on the uptake of energy efficiency solutions in eight different EU Member States found that the most efficient appliances had a lower market share in France, the UK and Sweden, compared to other countries. Additionally, households in these countries were less likely to be aware of alternative energy efficient technology.
Large variations between countries were detected for several purchase criteria, such as design, recommendations by friends and family, financial support measures and recommendations by professionals. The study indicates that there may not be a one-size-fits-all solution for the whole of the EU, but that different EU Member States will need different stimuli to encourage consumers to switch to more efficient and sustainable heating systems.
Even though sales of heat pumps in Europe increased by 34% to over 2 million in 2021, the EU is still a long way from meeting its heat pump target. According to RePowerEU, that number of new heat pumps needs to double to 4 million by 2026. This means a cumulative installation of 50 million heat pumps by 2030, tripling the 2021 stock.
In order to continue to convince consumers to buy, transparent information on the different technologies and costs is essential. While it may be too late for the winter of 2022, the energy price increases in the wake of the Russian invasion of Ukraine will provide a crucial incentive for many customers to switch to this more sustainable heating system.
Helena Uhde is a Junior Postgraduate Fellow at the EU-China Energy Cooperation Platform
This article was first published in the EU-China Energy Magazine – 2022 Christmas Double Issue, available in English and Chinese, and is published here with permission
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