Although there are some noticeable successes in the market developments, HPWH’s are still having a relatively small market share with a much larger potential.
Applying Heat Pump Water Heaters is one of the best possible technologies to reduce the energy usage and CO2 emissions for generating hot water significantly. The energy effect of switching from one technology to another is far greater than increasing the performance of existing technologies. Traditionally however policy makers are reluctant to make choices, thus except for Japan in the past with the Top Runner program, there seems to be no specific direct support for market development of heat pump water heaters.
Policies in the different countries in their overall approach have a general nominator focusing on energy conservation, renewables and energy security to reduce the greenhouse gases. As a basis, there is a number of legislative requirements described in directives, focusing on:
- Creating a challenge for individual technologies, through test procedures, standards and energy performance labelling, like European the ErP and EL regulations, TOP Runner in Japan, China Energy Label (CEL), Energy Star and Energy Guide labels in North America
- Creating a challenge for competing technologies, by setting energy targets for systems in buildings or by simply setting restrictions on certain types of technologies
Finally it is the end-user, either private or collective through housing corporation, but also the building constructor and its engineers having to comply with the Energy Efficiency demands of a building, that decide on the choice of water heating technology to be applied in a new building or a renovation project.
In general there is a strong belief that without supportive mandatory legislation that the market for HPWH cannot fully develop to its potential.
Change is coming.
Worldwide policy makers are beginning to recognize the importance of eliminating fossil fuels in newly constructed as well as renovation for buildings in a development towards an all-electric society. Some examples of local policies can be found in the City of Berkeley in California (USA) and in Denver’s Bold New Plan for Carbon-Free Buildings. At local level Low Carbon Heat: Heat Pumps in London, was already published by the Greater London Authority in September 2018. This report can be an inspiration to other governmental bodies at local level often advised by inadequate consultants
In the UK the Government has stated: We will aim for 600,000 heat pump installations per year by 2028, creating a market led incentive framework to drive growth, and will bring forward regulations to support this especially in off gas grid properties. However Without changes to policy costs on both electricity and gas, there is a far higher chance that the government will not meet its heat pump target and we will fail to decarbonise heating in the UK. A reform on the Energy Bill is an option where electricity is becoming cheaper and fossil fuels will get increased taxes. The question is if these local interesting policy developments in general do sway the developers, contractors, and housing regulators accustomed to basing their decisions on one question: what does it cost?
In May 2021 the IEA published the Report: NET Zero Energy by 2050 as a Roadmap for the Global Energy Sector. This special report is the world’s first comprehensive study of how to transition to a net zero energy system by 2050 while ensuring stable and affordable energy supplies, providing universal energy access, and enabling robust economic growth.
Heat Pumps will play an important key role, where the report has a focus on:
- Energy efficiency: Many energy efficient solutions are already available today and can be scaled up quickly;
- Electrification: Electricity generation becomes progressively cleaner, electrification will be by technologies like electric cars, heat pumps in buildings, and electric furnaces for steel production.
The EHPA together with RCH published Strategic Research and Innovation agenda for heat pump technologies, Making the technology ready for mass deployment. This report briefly presents a non-exhaustive list of the “topics” that can be included in the Strategic Research and Innovation agenda for heat pump technologies. Stopping or at least slowing down the destructive machine of climate change requires well-defined and far reaching research, innovation and implementation plans and missions.
The challenge is particularly significant for heat pump water heaters (HPWHs).
For the USA HPWHs appear poised to take a massive leap in market growth, as renewable grid penetration bolsters the carbon benefit of electrification. Over 30 municipalities in California and Massachusetts have already passed policies prohibiting gas water heaters in new buildings. In some cases, the only roadblock is the detailed cost data that developers and contractors need to come along for the ride. In Denmark gas boilers are prohibited for new buildings, while in Netherlands new housing quarters are not connected to the gas-grid and have to show an EPC=0 for the Energy Performance. The HPWH profits from these policies.
What Policymakers Can Do?
Utilities, municipal governments, and other regulating bodies can do more to ensure that developers install cost-competitive and carbon-superior HPWH’s or Multi-Function Heat Pumps and replace that for their traditional the fossil fuel heating systems that they have installed for decades. But not only the developer or installer must be convinced, also the end user. Governments and local Municipalities have the power to adopt all-electric building policies today. Municipalities and other authorities can also aggressively incentivize HPWHs for the same reasons they should aggressively incentivize heat pump for space heating options. And they have multiple reasons to do that.
The IEA TCP – 4E Mapping and Benchmarking has made extensive study on water heaters for domestic applications. The Final Report states that switching from technology gives a huge potential in energy conservation far greater than increasing the performance of existing technologies. As an example, a switch from the worst performing gas storage water heater to the best heat pump model would reduce annual energy consumption by almost 7 MWh per water heater. However, traditionally, policy makers have been reticent in pursuing policies that would drive switching of product type, even where technology neutral policy measures have been deployed. This 4E Mapping study encompasses a number of countries which have been analysed and reported upon, being Canada, China, Japan, Korea, Sweden and USA.
There is a number of opportunities for local policy to support the deployment of Heat Pump Water Heaters further, ranging from:
- Adjusting building permit processes for new buildings as well as for deep renovation;
- Requiring a comprehensive cost comparison between options as part of project planning;
At the Governmental policy level of Countries or Regions the relevant authorities:
- Need to develop objective calculation models for local authorities to work with, including training;
- Providing training, education, and technical assistance services to developers, contractors and installers, convincing these parties of these new business opportunities.
- Prohibiting inefficient water heaters from sale by setting clear efficiency standards;
- requiring certain high efficiency technologies, such as solar water heaters, to be installed.
As the market for HPWH’s will not independently some mandatory policy measures will have to be developed. The blog by Michael Gartman The Future of Hot Water Is Heat Pumps gives some more ideas on this.
Every new gas connection represents a missed opportunity to accelerate and simplify our clean energy transition. HPWH systems can serve as a keystone technology in this transition, giving us better-performing buildings, cleaner air, and an opportunity to create a bigger and more diverse workforce.
Opportunities
From the market analyses and analysing example projects a number of market opportunities for short term as well as long term can be described as:
- Installing in new single family and multifamily buildings to meet building regulation requirements;
- Retrofit of existing gas or oil boiler in single family buildings or terraced houses, with a new boiler and a heat pump water heater or a heat pump for both space and hot water heating;
- Replacement of direct electrical heating of hot water in existing buildings, individual domestic buildings, terraced houses, driven by customer need for energy cost savings;
- Retrofit of collective distribution systems for hot water in domestic multifamily buildings with individual heat pump water heaters, either a booster type or an air source HPWH;
- Homes where space is at a premium, with compact wall-hung systems with < 100 litre tanks or split HPWH;
- Ability for smart operation with PV integration and/or connection to smart grid;
- Low temperature distribution systems of the 4th Generation District Heating, with booster HPWHs.
The report by on Heat Pump retrofit Strategies for Multi Family Buildings for the Natural Resources Defense Council gives some interesting leads for this type of challenges.
Need for Examples
Micheal Gartman in his blog notices that HPWH’s have been sold in the United States for over 40 years but have historically struggled to penetrate the market, leaving the industry with relatively few case studies, best practices, and expert practitioners to learn from. During the work under the Annex 46 it was generally noticed that some information is available on Multi Family Buildings but rarely on single family buildings. Next to data on performance the economic data are of importance to convince end users, i.e. installed costs, maintenance costs and energy use in both single-family and multifamily homes for new buildings and retrofit.
The cost-benefit of these systems will only improve over time as design and installation best practices further reduce installed costs, technological progress and new grid services improve cost savings, and the grid gets cleaner.
The available data from monitoring is scarce for individual buildings. The HPWH Model Validation Study by the Northwest Energy Efficiency Alliance and the monitoring project on HPWH’s by the Fraunhofer-Institute for Solar Energy Systems ISE presented at the 12th IEA Heat Pump Conference are examples.