The International Energy Agency (IEA) released The Future of Heat Pumps on 30 November 2022, a special report in its World Energy Outlook series1. The report sets out an outlook for heat pumps, identifies opportunities to accelerate their deployment, and examines the barriers, policy solutions and implications for energy security and climate change1.
Around 10% of space heating needs globally were met by heat pumps in 2021, and global heat pump sales rose by nearly 15% that year, led by the European Union, where they rose by around 35%1. At the energy prices prevailing at the time, the IEA's analysis put annual energy bill savings for households switching to heat pumps at between USD 300 in the United States and USD 900 in Europe1. The report states that heat pumps typically cost less over their lifetimes than fossil fuel boilers because of their higher efficiency, but that government policy support is needed to help consumers overcome higher upfront costs relative to alternatives in many countries1.
The report estimates that heat pumps could reduce global carbon dioxide emissions by at least 500 million tonnes in 2030, equal to the annual CO2 emissions of all cars in Europe today1. It compares three scenarios: the Stated Policies Scenario, based on current policy settings; the Announced Pledges Scenario (APS), in which governments' climate targets are achieved on time and in full; and the Net Zero Emissions by 2050 Scenario1. Under the APS, around 20% of heating needs will be met by heat pumps in 2030, with China, North America and Europe remaining the leading markets1.
Barriers identified in the report include high upfront purchase prices and operational costs, the legacy of the existing building stock, limited manufacturing capacity, and a shortage of workers trained to install the pumps1. Global heat pump supply and installation could require over 1.3 million workers by 2030, nearly triple the current amount1. The report also notes that heat pumps will inevitably increase electricity demand, and that energy efficiency and improved grid planning can reduce the impacts on the grid1.
"heat pumps address many of policy makers' most pressing concerns on energy affordability, supply security and the climate crisis all the pieces are in place for the heat pump market to take off, in a similar way that we have seen for other key climate technologies like solar PV and electric vehicles."
Speaking at the launch, the European Commission Director-General for Energy, Ditte Juul Jørgensen, said the EU is aligning policies to facilitate the roll-out of heat pumps, including the Energy Performance of Buildings Directive, the Energy Efficiency Directive and Ecodesign regulations, with the phasing out of stand-alone fossil boilers by 2029 as one example1. The report states that heat pumps are receiving unprecedented policy support through the EU's REPowerEU Plan and the US Inflation Reduction Act, among other initiatives1. Announced plans to invest more than USD 4 billion in expanding heat pump production and related efforts, mostly in Europe, are cited1.
Why it matters for households
The report frames heat pumps as a route to lower household bills and reduced reliance on imported fossil fuels, at a time when heating in most buildings globally still relies on fossil fuels and many European countries have imported those fuels largely from Russia1. For a household, that connects directly to heat pumps and energy independence: the running cost case rests on efficiency, while the upfront cost remains the main obstacle the report identifies. The report also notes that the technology is well proven even in the coldest climates1, and that its wider adoption depends on grid capacity, manufacturing scale and the availability of trained installers, all of which sit outside a single home's control. The IEA's scenarios describe system-level change rather than individual outcomes, and the bill savings quoted are modelled figures for the energy prices at the time, not guarantees.
What happens next
The report sets out research, development and demonstration needs, including smart and flexible features that interact with the grid and other clean energy technologies, higher efficiencies over a larger temperature range, more compact design and improved ease of installation, lower environmental footprints and refrigerant safety, reduced noise, and non-traditional compression technologies1. It also identifies industrial opportunities: in Europe alone, 15 gigawatts of heat pumps could be installed across 3 000 facilities in the paper, food and chemicals industries1. No further IEA publication dates are given in the report coverage.