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Evidence for heat-pump price drop fails to add up

August 4, 2022

By Paul Homewood

h/t Jack Broughton

This article appeared in The Engineer this week:

 

 

 

 image

The Energy and Utilities Alliance (EUA) has analysed the French heat pump market where
installations average £11,000, a figure similar to installing a heat pump in the UK.
EUA point out that in 2021, 537,000 heat pumps were sold in France compared to 50,000 units
in the UK, suggesting that higher volumes do not reduce costs and presents a challenge to
current UK policy.
In Britain, the average heat pump costs around £10,000 to install compared to a combi-boiler
replacement of £1500. The Heat and Building Strategy, published in October 2021 suggests
that increasing volumes of UK heat pump installations will bring costs down.

Mike Foster, EUA chief executive, believes this new evidence renders UK heat decarbonisation plans
“useless” and calls for a government re-set.
“The French have blown a hole in UK government policy,” Foster said in a statement. “Their experience
shows that higher volumes of heat pump sales does not massively reduce their cost. The forecasted
reductions, claimed by BEIS, are simply numbers plucked from thin air. Just across the channel we have
real word experience, 537,000 heat pumps fitted last year, at a similar cost to that experienced in the
UK, with our 50,000 sales.”
Foster added: “Heat pumps are a globally traded product, why would they be cheaper in the UK than
France? It’s complete nonsense to suggest they would. Once you debunk this myth, the whole UK heat
and buildings strategy falls apart. It now needs an urgent re-set.
“Boris Johnson set a target of 600,000 heat pumps by 2028; cost reductions of 25-50 percent by 2025;
parity with a gas boiler by 2030. In doing so, he has thrown public money at subsidies, he has scrapped
VAT on heat pumps, he threatens to fine boiler manufacturers if they fail to meet his targets. But his own
advisory body have warned that heat pump running costs are higher than a gas boiler and now these
mythical costs reductions are shown to be just that, a myth.
“It’s time for the new PM, whoever that is, to press the re-set button. It’s time to admit the previous policy
was just hot air. And it’s time to urgently get our gas networks converted to hydrogen, keeping UK
homes affordably warm without damaging the climate.”

 

It is of course spot on. Heat pumps are already mass produced for the European market, and not just for France. Norway, for instance, also has large numbers installed.

Moreover, heat pumps are not “new technology”. There is no reason whatsoever to suggest that prices will fall significantly.

As I have said before, let the manufacturers put their money where there mouth is. If they think they can produce heat pumps at the cost of a gas boiler, and they believe that they are cheaper to run, then invest in a large scale manufacturing plant and prove it.

Don’t expect to rely on subsidies and bans.

46 Comments leave one →
  1. eromgiw permalink
    August 4, 2022 4:51 pm

    It’s fine up to the point where they start blathering about hydrogen. That’s a complete nonstarter.

    • August 4, 2022 5:19 pm

      Indeed. They need to explain how they’re going to produce it in vast amounts, without using gas, while keeping costs low. Good luck with that.

    • Mike Jackson permalink
      August 4, 2022 6:05 pm

      I’m with you. This idea that hydrogen should be allowed anywhere near joe public is a recipe for eventually blowing up the entire network in easy stages — or possibly even in one fell swoop. And there is no need for it. Why use one (relatively safe) fuel to manufacture another (bloody dangerous) one.
      They used to lock people up for having ideas more sane than that one!

      • Michael permalink
        August 4, 2022 6:38 pm

        Maybe hydrogen could be trialed in the houses of Parliament 1st….

      • Harry Passfield permalink
        August 4, 2022 7:29 pm

        Ooh…well said, Michael!

  2. Dr Ken Pollock permalink
    August 4, 2022 4:56 pm

    Agreed about hydrogen…You need to replace all the metal pipes in the grid – I am told 25% or so, as hydrogen leaks and embrittles the metal. So you use yellow plastic pipes, but don’t tell the Greens, as the plastic is made from oil!!!
    Plus, of course, the hydrogen has to be liberated from water, at a considerable energy cost.
    Oh, and when it burns, it produces H2O, i.e. water, and we all know that water vapour is the worst greenhouse gas there is, so much worse than CO2. Hang on…Why are we switching to hydrogen in the first place???

    • Ray Sanders permalink
      August 4, 2022 10:16 pm

      Worse still the IPCC quote a “GWP” (global warming potential) for fugitive hydrogen emissions that are eleven times greater than CO2. So the Houdini of gases is also a major problem apart from explosions.

  3. 2hmp permalink
    August 4, 2022 5:04 pm

    What is more significant is the comparative heat output. So far my experience of an air source heat pump is that is just cannot match an oil fired boiler (heating oil market is very competitive) and uses vast quantities of Government controlled electricity prices. Don’t let them kid you that the electricity market is competitive.

  4. Gordon Hughes permalink
    August 4, 2022 5:10 pm

    The EUA is being far too generous. There is, indeed, a very large market for heat pumps across Europe – especially in Scandinavia. Almost all of this is for new houses or replacement of existing systems – both much easier and cheaper than retrofits. In reality average costs in the UK are likely to be 25-50% higher than in France or Scandinavia.

    Further the notable feature of these markets is that retail electricity prices are typically €20+ per MWh lower than in the UK. The economics are simple – higher capital costs and higher running costs on a like-for-like basis. Hence, no market in GB and a large market in Scandinavia.

    By and large politicians and bureaucrats have no idea how much higher electricity prices have been in Britain than in most of NW Europe. That is not true just now but this lack of basic knowledge undermines most of the plans for rapid electrification.

    • Harry Passfield permalink
      August 4, 2022 7:33 pm

      So, how are ASHPs more efficient and economical in Scandinavia? Seems counter-intuitive to me.

      • bobn permalink
        August 4, 2022 9:18 pm

        subsidies

      • It doesn't add up... permalink
        August 5, 2022 12:06 am

        In Norway, until interconnectors started importing German and UK prices wholesale power prices were extremely low. Most of an electricity bill was made up of the cost of the network to deliver the power. Even now, wholesale power in Northern Norway is often under €10/MWh.

      • Phoenix44 permalink
        August 5, 2022 8:10 am

        Because they work best when its warm and as we all know, Scandinavia is warmer than the UK, particularly in winter…

        This is the usual nonsense propounded by people who don’t look at the detail.

      • The Informed Consumer permalink
        August 5, 2022 11:44 am

        Their houses are super insulated. That’s the only way heat pumps make any sense. I was told by a Heat Pump company that they wouldn’t sell me one for my Victorian cottage, even if I covered the thing in insulation.

        He assured me it wouldn’t work and they run the risk of being sued for providing a sub standard product.

  5. John Palmer permalink
    August 4, 2022 5:11 pm

    It’s ‘deja vue’ all over again!!!
    Just how long can this charade, indeed the whole nett zero charade be maintained in the face of real life and solid, empirical evidence?

  6. Subseaeng permalink
    August 4, 2022 5:26 pm

    Spot on!

  7. Thomas Carr permalink
    August 4, 2022 5:30 pm

    An attempt at explaining capital and running costs of heat pumps and the change required for domestic heating circuits was set out on the Today programme this morning at about 08.50 hrs . What did anyone make of that?

    • Ian Magness permalink
      August 4, 2022 5:52 pm

      Thomas, couldn’t find this. Have you got the day/time correct?

  8. T Walker permalink
    August 4, 2022 5:38 pm

    The best comment in recent days, Telegraph or Spectator can’t remember which, simply asked if this government that was now desperate to hand out large cheques to stop people going broke was the same one that is demanding we spend 10’s thousands on heat pumps and EVs. The final line just asked if there was any sane person still left in Westminster.

    • Mike Jackson permalink
      August 4, 2022 6:08 pm

      Plenty sane people in Westminster. The MPs are on holiday.

  9. Coeur de Lion permalink
    August 4, 2022 5:43 pm

    Why?

  10. W Flood permalink
    August 4, 2022 5:49 pm

    Not hydrogen for God’s sake or we’ll all be blown to kingdom come. Hire a few chemists. I’m lucky I’ll be dead soon but best of luck to the rest of you. Oh, BTW, with heat pumps you need electric immersion heaters to heat your water. That costs a fortune so you’ll need water heating panels on your roof. Or you could just commit suicide as this is unaffordable.

  11. Michael permalink
    August 4, 2022 6:39 pm

    One reason heat pumps are still expensive here (France) is because there are large grants available

  12. August 4, 2022 6:59 pm

    It is interesting that the number of heat pumps is 10x higher in France (537,000) as it is in the UK (50,000). I think this might reflect that a heat pump is also an air conditioning unit and in southern France in particular, AC makes the hot days much more bearable. The UK being further north and a bit colder with more moderate summers means the heat pumps need is primarily for heating so that 11,000 pound unit would only operate about half as much as it might in France.

    • Ray Sanders permalink
      August 4, 2022 10:23 pm

      In addition, the UK has the highest proportion of households connected to the mains gas network of any EU country hence cheap to run gas boilers prevail. France has a very low mains gas penetration and heating is generally much more expensive when required.

      • Ben Vorlich permalink
        August 5, 2022 8:06 am

        In rural France heating is by wood and to a lesser extent gas with a large tank in the garden and electricity

      • Phoenix44 permalink
        August 5, 2022 8:18 am

        Exactly. Many French houses replaced oil heating with new equipment when oil hit $100/bbl some years ago. New builds and renovations outside of major towns can only have gas if you are willing to spend a fair bit digging a big hole for a tank and putting in place pipes, so you have cost whatever you do. People in the UK think French houses are cheap, but they ignore the often £40-60,000 or more you have to spend on getting decent heating and replacing the ancient fosse septique!

  13. Gamecock permalink
    August 4, 2022 7:32 pm

    Government direction of the home heating market fails. Solution? Government try directing the market elsewhere.

    Common denominator? Government. New PM should say, “Y’all do what you want to.”

    “In the current crisis, government is not the solution. Government is the problem.” – Ronald Reagan

    • John Palmer permalink
      August 4, 2022 8:12 pm

      👍👍👍

    • Gerry, England permalink
      August 5, 2022 11:28 am

      Ronald Reagan on the most scary words people can hear – ‘I am from the government and I am here to help’.

  14. Up2snuff permalink
    August 4, 2022 8:00 pm

    I initially thought that an air source heat pump was about four to six times the size of a GCH combi boiler. Looking at the above photo it looks like they are about ten times the size of a GCH combi boiler. No CO2 savings made on manufacture, then. What is the likely CO2 emissions ‘payback’ period? It looks as though it might be more than a decade. That is assuming 100% reliability and no maintenance visits required after installation.

    This might be a typical gun:foot Political Incident as far as CO2 emissions are concerned.

    • John Hultquist permalink
      August 4, 2022 8:54 pm

      ” and no maintenance visits required after installation.”

      I have had one for 15 years — see comment below. I have an inspection at least every 2 years. There are fluids, moving parts, and electricity. Reliability has been fine but going without maintenance is a poor choice.

    • John Hultquist permalink
      August 4, 2022 9:02 pm

      Regarding the one in the photo:
      Mine, and many, are more cube-like and that one has two side fans; mine goes up. I put mine higher off the ground — ’cause male dogs do not discriminate.
      A search for ‘residential heat pumps’ will show the wide selection of shapes and sizes.

      • Up2snuff permalink
        August 7, 2022 2:19 pm

        John, agree that regular maintenance is wise. At least you have a saving on my annual maintenance visit for a gas boiler. Does your maintenance contractor visit your home in a fossil fuel burning (diesel?) vehicle? You can add that to the payback period. Very wise, your moving the heat pump out of dogs and harms way. I will not ask about the installation work, number of visits, power consumed for tools, because all that has to be added to the payback period as well.

        Then there is the ecological and environmental question of what is done with 25,000,000 redundant GCH boilers. that will require some shifting. Your share will be added to the already growing payback period.

        A friend reckons that a future shift to hydrogen fuel will be OK. Wishful thinking, I’m afraid, as its creation is energy intensive, even for just a small country like the UK.

  15. August 4, 2022 8:16 pm

    Fining boiler manufacturers?????

  16. John Hultquist permalink
    August 4, 2022 8:47 pm

    I live near the Columbia River in Washington State. There are 4 large dams within 50 miles and several more within 100. Electricity is reliable and inexpensive compared to most other places. I have a yearly rate set each fall. The nearest gas line is 6 miles away. I would need to have a tank of Propane that I don’t want. Although I’ve seen some nicely painted ones (search: painted propane tanks), most just have the standard white.
    To complicate the issues, winter temperature can go to -27°C. Thus, I also have a modern catalytic wood burning stove, my own trees for fire wood, and a chainsaw.
    Heat pumps are not a solution for most people. Period.

    • Devoncamel permalink
      August 4, 2022 11:02 pm

      I’m off grid here in South West England. Nothing like as cold and my new build house has a heat pump. It works well but electricity prices are going north at a fair lick. For a normal sized house I’m paying over £200 per month for electricity. There is no other fuel source unless I install a log burner.

    • Up2snuff permalink
      August 7, 2022 2:21 pm

      John, hydro power is a blessing ummmhh, er, a bit like abundant fossil fuels.

  17. Devoncamel permalink
    August 4, 2022 10:57 pm

    If heating homes was left to the vagaries of the market, gas boilers would trump heat pumps, unless off the gas grid like I am in Devon. The other option is propane tanks or oil fired boilers. Nonsensical green ideology has been universally adopted by our esteemed political class. This dominates and informs our energy policy which is why it’s all gone tits up.

  18. August 5, 2022 1:51 am

    I wonder if some on here are worrying too much about the effect of hydrogen on infrastructure. Coal gas used to contain a lot of hydrogen. It was a mixture of hydrogen and carbon monoxide.

    • Dave Andrews permalink
      August 5, 2022 5:37 pm

      A blend of 80% gas and 20% hydrogen is compatible with existing infrastructure. Higher concentrations of hydrogen would require not only significant network and infrastructure upgrades but also hydrogen specific appliances and boilers.

      The village of Winlaton in NE England is being trialled with the 80/20 mix since August 2021

  19. StephenP permalink
    August 5, 2022 7:59 am

    The HoP and Whitehall already use natural gas to run their combined heating/electricity generating system, si it would be an easy task to switch over to hydrogen.
    What the effect on total CO2 emissions would be I await with interest.

    CARBON EMISSIONS – WHITEHALL POWERPLANT SWITCHED ON
    25 Oct 2005 04:00

    http://Www.wired-gov.net/wg/wg-news-1.nsf/54e6de9e0c383719802572b9005141ed/c1d44625f1836e9b802572ab004bc007?OpenDocument

    • StephenP permalink
      August 5, 2022 8:03 am

      A thought comes to mind, what is the life of a CHP plant before it needs to be replaced?
      The Whitehall plant is already 17 years old.

  20. Ben Vorlich permalink
    August 5, 2022 8:14 am

    Heat pumps use HFCs – Hydrofluorocarbons as the gas to do the evapourating-codensing to transfer heat, This leaks out, car aircon often require “recharging” I imagine that over a couple of decades being out in all weathers Heat Pumps will suffer similar issues. In cheaper versions leaks will be more likely I would guess.
    Capturing HFCs at end of life will require specialist handling,

    The most abundant HFC is 3,790 times more damaging to the climate than carbon dioxide over a 20-year period.
    https://www.ccacoalition.org/en/slcps/hydrofluorocarbons-hfcs

  21. Phoenix44 permalink
    August 5, 2022 8:23 am

    The claims about substantial reductions in cost are all over Net Zero. If you remove them, the costs are mammoth and clearly economically crippling. EVs are the worst – there’s no way the £10-15,000 price gap with ICEs will be bridged by “mass production” as EVs are already mass produced, as are all the components. These reductions are deliberate fudges by the CCC which knows that otherwise their lunacy will be rejected. A simple adjustment of the CCC’s own absurdly non-comprehensive costs figures, removing the wildly optimistic assumptions would show that Net Zero is madness.

  22. avro607 permalink
    August 5, 2022 4:11 pm

    To Ben Vorlich:how does CO2 damage the climate???

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