Reducing heat pump installed costs: Reviewing historic trends and assessing future prospects
File(s)
Published version
Author(s)
Winskel, Mark
Heptonstall, Philip
Gross, Robert
Type
Journal Article
Abstract
Residential heat pumps are a critical energy transition technology, but their installed costs are often much higher than incumbent technologies – imposing a policy imperative, in the UK and elsewhere, to reduce deployment costs. Here, we systematically review historic and forecast UK and international data on heat pump installed costs.
Installed costs are reported using three main metrics: Single Point Cost, Experience Rates and Percentage Cost Reduction. Experience Rates offer the highest quality metric, but there are few available studies, particularly for non-equipment costs. Single Point Cost is the most widely reported metric, but conflates diverse technologies and contexts. Percentage Cost Reduction is a relatively common forecasting metric, but may lack rigour.
Historic data suggests that there has been no significant reduction in the average installed cost of heat pumps over the past decade in the UK, while modest cost reductions were seen internationally. At times, particular countries have aligned deployment growth with significant cost reduction.
Forecast data suggests reductions in installed costs of 20–25 % between 2020 and 2030 in the UK – significant, but relatively modest compared to current UK policy goals. We conclude that heat pump deployment policy support should be resilient to fluctuations in installed costs, as the market grows.
Installed costs are reported using three main metrics: Single Point Cost, Experience Rates and Percentage Cost Reduction. Experience Rates offer the highest quality metric, but there are few available studies, particularly for non-equipment costs. Single Point Cost is the most widely reported metric, but conflates diverse technologies and contexts. Percentage Cost Reduction is a relatively common forecasting metric, but may lack rigour.
Historic data suggests that there has been no significant reduction in the average installed cost of heat pumps over the past decade in the UK, while modest cost reductions were seen internationally. At times, particular countries have aligned deployment growth with significant cost reduction.
Forecast data suggests reductions in installed costs of 20–25 % between 2020 and 2030 in the UK – significant, but relatively modest compared to current UK policy goals. We conclude that heat pump deployment policy support should be resilient to fluctuations in installed costs, as the market grows.
Date Issued
2024-12-01
Date Acceptance
2024-07-22
Citation
Applied Energy, 2024, 375
ISSN
0306-2619
Publisher
Elsevier
Journal / Book Title
Applied Energy
Volume
375
Copyright Statement
© 2024 The Authors. Published by Elsevier Ltd. This is an open access article under the CC BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/).
Identifier
10.1016/j.apenergy.2024.124014
Subjects
Energy & Fuels
Energy policy
Engineering
Engineering, Chemical
Heat pump
Installed costs
Science & Technology
Technology
Technology assessment
UK
Publication Status
Published
Article Number
124014
Date Publish Online
2024-08-10