Over the past decade, the European market for heat pumps has been growing at a steady pace, with an annual growth rate of 10% from 2011 to 2020, resulting in the expected installation of 1 million heat pumps per year in in the year of 2021, indicating a market growth of 39% from 20201. In the next decade, by 2030, at Daikin we do not only see a growth, but an actual acceleration of the yearly installation of heat pumps that will go up to 4 million, representing an annual growth rate of 20%. In other words, 1 out of 3 heating systems installed is going to be a heat pump, from 1 out of 10 in 2020. Although this shows a steep growth versus past years, we consider this as a minimum to move to a decarbonised residential heating market in Europe.
The key driver for growth has undoubtedly been the introduction of strengthened legislation governing new builds in many European countries, ranging from general regulations in France such as RT2012, which sets the new minimum standard of thermal insulation of dwellings, to a ban on combustion boilers in the Netherlands.
Alongside this, we have seen a number of initiatives in recent years, particularly in France, Germany and Italy, aimed at promoting heat pumps in the replacement market, accompanied by government incentives at both national and local levels. At the same time, the technology has developed to help make heat pumps an attractive option. For example, the arrival to the market of optimised ‘high temperature’ heat pumps2 enables the replacement of existing combustion boilers without the need to update or modify existing radiators.
We are pioneers in this field, having introduced our first solution back in 2008 and then delivered a completely revamped heat pump to the market in 2019, supplying unparalleled efficiency and setting the new heat pump standard.
2020 will go down as a defining year for the heat pump industry. With the introduction of the EU Green Deal3 came the firm commitment to reduce CO2 emissions and make the EU the first climate neutral bloc by 2050. It is widely accepted that the decarbonization of the heating and cooling sector, which contributes 40% of CO2 emissions4, will be key in helping to achieve this goal. The last two years have also seen a growing public awareness of the negative effects of climate change along with a willingness to do something about it.
“Fit for 55” - what does it mean for you and the heat pump market?
As an intermediate step towards climate neutrality, the EU has raised its 2030 climate ambition, committing to cutting emissions by at least 55% by 2030. “Fit for 55” is the European Commission’s ambitious plan to put the decarbonization strategy into practice and set the EU on course to slash greenhouse gas emissions by 55% by 20305.The directive maintains that a policy targeting higher energy efficiency and a switch from fossil-based heat supply to renewable sources is imperative.
The market outlook for heat pumps will be determined by the drive to decarbonise the heating sector, resulting in a monumental move to renewable heating, and a faster than expected growth of the use of heat pumps. Different drivers apply:
Daikin Europe is ready to face the net zero challenge
This obviously triggers the question; is the industry ready in terms of production capacity, logistics structures, installation capacity and follow up?
The European heat pump sector is widely spread across all countries with a mix of small, medium sized – often locally operating - businesses to large multinational companies. The latter especially will have the potential to drive the growth and secure the European-wide deployment of heat pumps.
At Daikin Europe, we installed over 750 000 heat pumps, and we have the structure and capability to face the growing challenge with confidence in Europe.
Daikin Europe is truly present on a pan-European basis from A to Z, with multiple factories, logistics capability and installer care. We are proud to be helping all our customers take the lead creating a stable climate, safer and healthier homes, and more affordable energy bills.