Heat pumps: hot and cold?

Some policymakers now aspire to ban gas boilers and ramp heat pumps 10x by 2050. In theory, the heat pump technology is superior. But in practice, there are ten challenges. Outright gas boiler bans could become a political disaster. The most likely outcome is a 0-2% pullback in European gas by 2030. We have also screened leading heat pump manufacturers in this 18-page note.


The opportunity for heat pumps in the energy transition is laid out on pages 2-3, as the IEA now advises that “bans on new fossil fuel boilers need to start being introduced globally in 2025, driving up sales of electric heat pumps”.

But are they ready for prime time? We have reviewed technical specifications, costs and consumer feedback on pages 4-13. The work suggests large heat pumps may not feasibly substitute for gas boilers in every context. There are ten crucial challenges for the industry to overcome.

Gas market impacts are quantified on pages 14-17. Our base case is that trebling heat pump capacity in Europe by 2030 will erode 2% of total gas demand. But rebound effects and under-performance could cut the net benefits to nil.

The best placed companies are explored in our detailed screening work (which we have used to select a heat pump provider for our own GSHP project in Europe). One company stands out in particular, having built-up an industry leading portfolio through acquisitions.