The UK heat pump market is experiencing unprecedented growth, spurred on by government incentives, technological advancements and an increasing awareness of the need for sustainable heating solutions. Heat pumps – air-source and ground-source, though perhaps with an emphasis on the former owing to its easier and lower-cost installation – are widely regarded as a key component in the transition away from fossil fuels for home heating.
Heat pump market growth
In 2024, nearly 100,000 heat pumps were sold in the UK, marking a 63% increase from the previous year.* While this is a positive trend, the UK still lags behind other European nations in terms of adoption – the UK currently has approximately 412 heat pumps per 100,000 people, whereas the European average stands at 3,068 per 100,000.** To address this disparity, the government has set an ambitious target of installing 600,000 heat pumps annually by 2028.
Financial incentives have been pivotal in this growth. The Boiler Upgrade Scheme (BUS) offers grants of up to £7,500 to encourage homeowners to replace gas boilers with heat pumps; the government has increased the available funding under the BUS by £30 million this year and plans to double it to £295 million by 2025/26. Additionally, regulatory changes have made heat pump installations easier by removing the need for planning permission, which had previously been a requirement if installed within a one-metre distance of neighbouring properties.
Larger-scale installations are being supported, too. The Green Heat Network Fund (GHNF) is a UK government capital grant programme that supports the development of low and zero carbon heat networks by providing funding to public, private and third-sector organisations in England for the commercialisation and construction of new heat networks, as well as the retrofitting and expansion of existing ones.
To further support the industry, the government is also backing UK heat pump manufacturers with targeted funding and initiatives. The Heat Pump Investment Accelerator aims to increase domestic manufacturing capabilities, reducing reliance on imports and driving innovation, by providing financial support to manufacturers investing in new production facilities, research and development. Additionally, tax incentives and grants are being introduced to encourage companies to scale up production and lower costs, making heat pumps more affordable for consumers in the long term.
Challenges for the industry
One of the main challenges in the heat pump market is the shortage of qualified installers. The rapid expansion of the industry means that there is an urgent need for more trained professionals. The government has introduced training schemes to address this gap, but further investment in skills development will be necessary to meet demand.
For developers, the expansion of the heat pump market signals a shift towards integrating low-carbon heating systems into new builds. Future regulatory changes, including the Future Homes Standard, mean that developers must begin adapting now. Under this legislation new-build properties will be required to be ‘zero carbon ready’, meaning they will not need retrofitting to meet future net-zero targets. This regulation will effectively mandate the phasing out of gas boilers in new homes, making heat pumps the primary heating solution for residential developments (although despite reports, this will not involve a ‘boiler ban’).
There will be some consternation amongst homeowners: a well-designed heat pump system is more expensive to run than a well-designed gas boiler system, and that’s really the reason why the government heat pump push hasn’t quite worked as hoped – it’s more expensive to install, more expensive to run and maintain, and less flexible overall. In fact, due to the higher running costs, heat pumps can perform worse in EPC ratings than the same house with a gas boiler. But of course the main objective of decarbonising heating is to try to mitigate climate change, so cost savings were never really part of the rationale; householders trying to navigate the cost of living crisis will of course find this a difficult circle to square, however.
We will need to design homes with enhanced insulation, improved ventilation and optimised heat distribution systems to maximise the efficiency of heat pumps – and for the first time, under the Future Homes Standard, it will be necessary to test and verify the thermal performance of new homes after construction, ensuring they perform as designed. Contractors and installers must also ensure that heat pumps are specified and installed correctly for optimal performance:
- Sizing
The heat pump unit must be appropriately sized for the property to ensure sufficient heating without excessive energy use. - Noise levels
Modern heat pumps are quieter than older models, but careful placement is still crucial to avoid noise disturbance. - Electricity supply
Homes with single-phase electricity may need an upgrade for larger heat pump installations. - Insulation
Homes with high insulation levels retain heat more effectively, reducing the workload on the heat pump and improving efficiency. - Low flow temperatures
Heat pumps work most efficiently at lower flow temperatures. This means they are best paired with underfloor heating or larger radiators that can operate effectively at lower temperatures. - Outdoor temperature
Air-source heat pumps extract heat from the air and can still function in sub-zero temperatures, but their efficiency decreases as temperatures drop. In colder regions, hybrid systems (pairing a heat pump with a backup boiler) may be required. - Educating users
Unlike gas boilers, heat pumps operate differently, and users must be aware of the best practices for maximising efficiency – including how they work best running at a steady temperature and require regular maintenance.
Cleaner, greener heating systems
The heat pump market in the UK is set for continued expansion, buoyed by a combination of government support, regulatory changes and increased consumer awareness, which is creating a strong foundation for growth. However, challenges remain, including the need for more skilled installers, and better public understanding of how heat pumps operate.
As we move towards 2028 and beyond, the role of heat pumps in reducing carbon emissions and improving energy security will only become more significant. Homeowners, developers, and installers must all play their part in embracing and optimising heat pump technology to ensure a successful transition to a low-carbon future – for further insights and support in taking this step, call us on 01206 266755 or email mail@ajenergy.com.
* https://www.heatpumps.org.uk/resources/statistics/
**https://www.heatpumps.london/blog/everything-you-need-to-know-about-heat-pumps