The transition away from gas boilers presents a major market opportunity for forward-thinking companies, writes Bill Wiggin MP.
Global sales of heat pumps grew by 11 per cent in 2022, according to the latest International Energy Agency analysis, a second consecutive year of double-digit growth for the central technology in the world's transition to secure and sustainable heating. In Europe, heat pumps enjoyed a record year, with sales growing by nearly 40 per cent. In the United States, heat pump purchases exceeded those of gas furnaces. This represents a major export opportunity for UK firms.
The future is also looking bright in the UK, with big ambitions to boost the market. Experts have identified an £11bn opportunity associated with hitting 600,000 heat pump installations per year in 2030. Meanwhile, the government predicts at least 300,000 heat pumps will be made in UK each year by 2028.
This isn't the first time the UK has undergone a heating transition. The decade to 1977 saw 13 million homes converted to use natural gas, in a nationally coordinated process. The process took 10 years to complete, with chairman of the British Gas Corporation Dennis Rooke claiming it as "perhaps the greatest peacetime operation in this nation's history".
Now, the Climate Change Committee (CCC) estimates that around 29 million houses need converting to be net zero compatible - over twice the number.
What role will boiler manufacturers play in today's heating transition? There is no doubt that if they wanted to be, current manufacturers of fossil heating appliances could shift their supply chains to focus on heat pumps. In fact, many are starting to do just that. Vaillant has opened a heat pump factory in Derby, and Ideal Heating in Hull. Meanwhile, Octopus is manufacturing heat pumps in Craigavon, Northern Ireland, and Kensa in Cornwall.
The "kodak moment" concept was popularised when camera companies failed to embrace the transition to digital. While there will continue to be a role for gas boilers for years to come, manufacturers can get on the front foot and invest in clean heat innovation - making sure that the very best consumer deals are available to make heat pumps available for everyone.
The government has already taken a number of steps to support heat pump manufacturers to invest in innovative projects, including with the Heat Pump Investment Accelerator Competition which provided grant funding of up to £15m per project for major investments in the manufacture of heat pumps and strategically important components. It is also looking to boost uptake of heat pump through grants and regulations that will help level the market.
Ask any company what's needed to drive the market, and the answer is long-term certainty of the direction of travel for industry and consumers alike. This will help attract investment and provide confidence to invest in skills and supply chains. The global direction of travel is clear - and despite what some naysayers would have you believe - there is an enormous market opportunity to be achieved for companies ramping up production.
First published by Politcs.co.uk. Stephen Hammond MP (Wimbledon) is a member of the Conservative Environment Network.
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