European Heat Pump Statistics

Transcription

1 outlook 2011 European Heat Pump Statistics ehpa.org

2 Cover pictures of the OUTLOOK 2011: In order to make the potential of heat pump technology more visible, the cover of the OUTLOOK 2011 shows five examples of successful heat pump application: Example 1 Power Tower Energie AG, Linz AT (Photo courtesy of Ochsner Corporation, Austria) Building type Passive house office building heated and cooled with two ground coupled heat pumps (vertical borehole and activated concrete foundations), PV façade, intelligent lighting and forced ventilation m 2 office space. Commissioning 2008 Service Heating & passive cooling Heat pump Two high capacity brine/water heat pumps (370 kw/337,4 kw) Capacity 700 kw heating / 800 kw cooling Energy source Geothermal energy/groundwater Example 2 Residential home in Finland heated with air/air heat pumps (Photo courtesy of Jussi Hirvonen, SULPU, Finland) Building type 250m 2 residential building; heat pumps as a replacement for previously installed direct electric heating, final energy savings: 45 % ( kwh down to less than kwh/year) Commissioning 2006 Service Heating Heat pump Three air/air heat pumps Capacity./. Energy source Ambient air Example 3 Commercial building in Berlin DE (Photo courtesy of Ochsner GmbH, Austria) Building type Commercial / Retail with optimized energy supply concept using heat pumps, peak power gas boiler, PV and solar thermal collectors Commissioning 2010 Service Heating (70 %) and cooling (100 %) Heat pump three high capacity brine/water heat pumps Heating capacity 3 x 500 kw Energy source Municipal Waste-Water Example 4 Mixed use project in Mellingen CH (Photo courtesy of Stiebel-Eltron GmbH, Germany) Building type Mixed commercial (post office, modern furniture store and new treatment center) and residential (28 housing units) built to Minergie standard Commissioning 2005 Service Heating and sanitary hot water Heat pump Six brine/water heat pumps for hot water and heating Capacity max. 90 kw (cascading application) Energy source Geothermal energy (drilling) Example 5 Office building in Törökbálint HU (Photo courtesy of HGD KFT Corporation, Hungary) Building type Office building, headquarter of mobile operator company Telenor, m 2 with about workstations Commissioning 2009 Service Heating, sanitary hot water and cooling Heat pump Three high capacity brine/water heat pumps Capacity 862,2 kw for heating and 965,7 kw for cooling Energy source Geothermal energy (180 boreholes), 2nd largest in Hungary and one of the biggest of such projects in Europe; 168 m 2 solar panels covering % of sanitary hot water needs

3 outlook 2011 European Heat Pump Statistics

4 Authors Thomas Nowak Phone: thomas.nowak@ehpa.org Peter Murphy Phone: peter.murphy@ehpa.org European Heat Pump Association Rue d Arlon B-1040 Brussels National editors Austria Gerald Lutz Bundesverband Wärmepumpen BWP Austria Phone: info@bwp.at Belgium Marc Frere phone Marc.Frere@umons.ac.be Jan Lhoëst Warmtepomp Platform Vlaanderen Phone: jan.lhoest@ode.be Czech Republic Josef Slováček Czech Heat Pump Association AVTC Phone: info@avtc.cz Estonia Jüri Miks Estonian Heat pump Association ESPEL Phone: espel@solo.delfi.ee Finland Jussi Hirvonnen Finnish Heat Pump Association SULPU Phone: jussi.hirvonen@sulpu.fi France Valérie Laplagne Uniclima Phone: valerie.laplagne@uniclima.fr Patrick Brandt AFPAC Phone : afpac.org@orange.fr Germany Gregor Dilger BWP Germany Phone: dilger@waermepumpe.de Hungary Béla Ádám Hungarian Heat Pump Association MAHŐSZ Phone: info@hoszisz.hu Ireland Paul Dykes Sustainable Energy Authority of Ireland SEAI Phone: pauld@reio.ie Italy Giampiero Colli Italian Heat Pump Association CO.Aer Phone: colli@anima-it.com Lithuania Alvydas Sakavičius Lietuvos s ilumos siurblių Asociacija Phone: info@lietssa.lt The Netherlands Peter Oostendorp Dutch Heat Pump Association DHPA Phone: info@dhpa-online.nl Norway Bård Baardsen Norsk Vaermepumpefoerening NOVAP Phone: novap@novap.no Poland Małgorzata Smuczyńska Nibe-Biawar Phone: msmuczynska@biawar.com.pl Portugal Rita Cerdeira IPS-ESTSetubal Phone: rita.cerdeira@estsetubal.ips.pt Slovakia Peter Tomlein Slovak association for cooling and air conditioning SZ CHKT Phone: zvazchkt@isternet.sk Spain José Maria Ortiz Asociacion De Fabricantes De Equipos De Climatización AFEC Phone: afec@afec.es Sweden Martin Forsén SVEP Phone: martin.forsen@ehpa.org Switzerland Stephan Peterhans Fördergemeinschaft Wärmepumpen Schweiz FWS Phone: stephan.peterhans@fws.ch United Kingdom Johannes Fritsch BSRIA Phone: Johannes.Fritsch@bsria.co.uk Japan Tokura Shogo Heat Pump & Thermal Storage Center of Japan HPTCJ Phone: tokura.shogo@hptcj.or.jp USA Francis Dietz Air-Conditioning, Heating, and Refrigeration Institute AHRI Phone: FDietz@ahrinet.org Canada Denis Tanguay Canadian GeoExchange Coalition Phone : denis.tanguay@geo-exchange.ca China Cooper Zhao China Heat Pump Alliance / International Copper Association Phone: cooperzhao@copper.org.cn Contribution thermally activated heat pumps (chapter 4.3) Luigi Tischer Robur Phone: ltischer@robur.it Karl-Heinz Backhaus Vaillant Phone: karl-heinz.backhaus@vaillant.de Editing support Fanny Rateau, EHPA 2011 The European Heat Pump Association EEIG (EHPA) Rue d Arlon B-1040 Brussels Phone: Fax: info@ehpa.org The content of this publication may not be copied, reproduced, republished, downloaded, posted, broadcast or transmitted in any way without EHPA's written permission. This report was prepared to the best of our knowledge. The opinions and interpretations presented are those of the authors and editors and do not necessarily apply to all industry actors. Neither the authors, the editors nor EHPA shall be held liable or responsible for any loss, cost damages or expenses incurred or sustained by anyone resulting from use of this report. Design by Ebmeyer & Ebmeyer GmbH, Munich

5 CONTENTS Editorial EXECUTIVE SUMMARY: THE EUROPEAN HEAP PUMP MARKET EUROPEAN ENERGY TRENDS EUROPEAN LEGISLATION AFFECTING HEAT PUMPS: 2011 UPDATE The Directive on the promotion of the use of energy from renewable sources Energy Performance of Buildings Directive The Ecodesign for energy related products-framework Directive; Lot Energy labelling Directive Commission decision on an Ecolabel for heat pumps Energy efficiency Directive (EED) INDUSTRY AND TECHNOLOGY TRENDS Market development Technology development Thermally activated heat pumps EUROPEAN HEAT PUMP MARKET STATISTICS European heat pump market development EU country overview: EU Market penetration Market segmentation A positive energy balance: efficiency and energy savings Renewable energy provided by heat pumps Greenhouse gas emission savings by heat pumps Outlook for FOCUS REPORTS ON SELECTED EUROPEAN MARKETS Austria Belgium Czech Republic Estonia Finland France Germany Hungary Ireland Italy Lithuania The Netherlands Norway Poland Portugal Slovakia Spain Sweden Switzerland United Kingdom FOCUS REPORTS ON SELECTED MARKETS Japan North America Canada China FUTURE CITIES = HEAT PUMP CITIES? List of figures and tables Annex I How do we count? EHPA data acquisition methodology Annex II EHPA heat pump statistics: questionnaire used Annex III Consolidated sales of heat pump units Glossary Contents 3

6 European Heat Pump Statistics OUTLOOK 2011 EDITORIAL Dear Reader, It is a pleasure to present the 2011 edition of EHPA s Outlook on the heat pump market and statistics. The consolidated facts lead to one clear conclusion: heat pumps are back. The severe decline in sales numbers observed in 2009 did not continue in Whilst some of the larger markets like France and Germany, did not yet manage to reverse the negative trend, several smaller markets did show considerable growth, albeit from a low base. This trend bodes well for the future with less dramatic growth or flatter sales in maturing markets being overcompensated by these new and emerging heat pump tiger states. From a policy perspective, the RES Directive has ensured that heat pumps have been placed at the top of public agendas. Since 2009 the technology has been recognized where appropriate in virtually all renewable energy, climate protection and energy efficiency related legislation. Subsequently, it will find its way into national legislation and ordinances. This should result in favourable market framework conditions for heat pumps. The ongoing efforts to finalize the accounting method for the contribution of heat pumps to EU energy statistics as well as the energy label are just two measures that will make heat pump use and benefits more visible. Heat pumps themselves are getting better and smarter. The integration of improved components is continuing, leading to higher efficiency and making systems more compact and thus easier to install. Equipped with smart controls and connected to the internet, heat pumps are poised to play a pivotal role in the future energy system. They will enable the integration of a much larger share of intermittent renewable electricity, and will contribute to a stable, secure and affordable energy supply. From a consumer perspective, the heat pump decision is easier today than it ever was in the past, with a heat pump available for nearly every type of application. At the same time however the actual purchase decision is perhaps more difficult today than it was hitherto. From a cost perspective heat pumps suffer from unfavourable relative running costs, due to cheap fossil fuels and increased electricity prices. In terms of taxation there is a disadvantage to the technology due to the fact that electricity, as a heat pump s auxiliary energy, is taxed heavily and in many countries is also subject to an additional levy to finance the transformation of the electricity mix. This leads to increased operating costs and is counterproductive in terms of speeding up market development. Overall, the European heat pump market is maturing. Despite suffering some severe shocks on the back of a very challenging economic environment, the more experienced players have remained resilient and the industry has remained strong They have now to prepare for future growth, eventually transitioning heat pumps to a mass-market product. Quality of installation will play an important role in maintaining policy support, public confidence and customer satisfaction, whilst at the same time guarding against the advancement of those less committed players who are merely focused on short term gains. It is a cooperative effort that all stakeholders need to make. If successful, heat pumps will deliver the proclaimed triple dividend to the European heating market, making it more efficient, more renewable and less polluting, in short, more sustainable. We are optimistic, that this vision will become a reality. We hope that you enjoy reading this report as much as we enjoyed producing it and hope that it will be a valuable resource for your work. Thomas Nowak Peter Murphy 4 Editorial

7 OUTLOOK 2011 EXECUTIVE SUMMARY 1 The European heat pump sector witnessed a challenging market environment in It was characterized by a multitude of factors some of which were positively and others negatively influencing heat pump sales. Overall, the market reached a total of units sold in all 20 countries covered. This reflects a slightly negative trend with 3% for EU-13 and 2,3 % for EU-18 (see figure 1-1 and table 1-1). The positive result in absolute numbers was mainly caused by adding three new countries, Spain, Poland and Portugal, to the report. Their large share of air source heat pumps overcompensated the decline in other markets. Figure 1-1: Development of heat pump sales in Europe, by category. The on-going global economic and financial crisis continues to affect the availability of credit, and negatively influences consumer confidence and sentiment regarding any discretionary new investments. The slowdown and virtual collapse of the construction sector, particularly of the new built segment in many countries has halted activity in areas which had seen significant growth in the period. sum EU-13 sum EU-18 sum EU-20 cumulated total Table 1-1: Heat pump sales in Europe, absolute numbers. Budgetary constraints, at European and national level have resulted in a tightening of incentives and support schemes. General uncertainty surrounding future developments has led consumers towards cost orientated, short term decisions Executive summary 5

8 European Heat Pump Statistics OUTLOOK 2011 Figure 1-2: Changes in heat pump sales in 20 European countries by year. 160% 140% 120% 100% 80% 60% 40% 20% 0% -20% AT BE CH CZ DE E E EE* ES* FI* F FR* HU IE E IT* * LT* LT* NL NO* PL PT* PT* * SE* SK UK K summ EU-13 EU- -40% or to deferring investment decisions to a future date. Finally the low relative price of oil and gas during much of this period has also provided a challenging environment for promoting the merits of heat pump technology s lower operating costs. From a geographic perspective a significant proportion of the decline may be attributed to a small number of (large) markets led by France, followed by the Netherlands, Germany, and Finland. In the past they have accounted for a large proportion of the overall European market (approximately 80 %). Their weak performance had a disproportionate affect on the overall picture presented and could not be overcompensated by the growth in markets such as Belgium, Czech Republic, Hungary, Ireland, Italy, Portugal, Slovakia and the UK which showed growing sales, albeit from a low base (see figure 1-2). In terms of energy source used, macro trends show a continued trend towards a shift from ground source to air source heat pumps in most markets, in some cases air alternatives exceeding ground source for the first time in The trend reflects a more cost conscious decision in favour of air-source units as a maturing technology with lower installation costs. In total, more than 3,7 mio. heat pumps have been sold since They save 36,6 TWh of final energy and 15,5 TWh of primary energy, they produce 29,1 TWh of renewable energy from air, water and ground and avoid 6,8 Mt of greenhouse gas emissions (GHG). Aggregated data for all markets covered is presented in figures 1-3 and 1-4. Looking at market developments and trends, the rapid expansion of the European heat pump sector in recent years has brought with it the typical changes and challenges of a growing market. Once a segment characterized by a large number of small manufacturers it is now being integrated into the mainstream European heating, ventilation and air-conditioning market. The large oil and gas boiler manufacturers have gradually established a position in the heat pump sector. Recent developments show both the emergence of new entrants, and continued consolidation within the sector, leading to the emergence of a number of larger European Heating and Cooling Groups. Increased competition has brought intense price competition in all markets but in particular in the lower cost and entry level segments. A notable development in the European heat pump sector is the growing presence and expansion of the air conditioning manufacturers. These companies are deploying refrigeration technology traditionally used in cooling devices in heating applications. By leveraging strong brand awareness and economies of scale they have taken positions in many of the markets which they have entered. The sector is also witnessing fundamental changes in distribution channels to the end consumer. Whilst traditional three stage distribution remains strong, some markets show clear signs of a growth in two stage distribution (through installers) and some instances of a trend towards sales via DIY chains and online. 6 Executive summary

9 9,00 8,00 7,00 6,00 Sanitary hot water Exhaust air HP Reversible HP Air-water r GSHP 5,00 4,00 3,00 2,00 1,00 0,00 AT BE CH CZ DE EE* ES* FI* FR* HU IE IT* LT* NL NO* PL PT* SE* SK UK Figure 1-3: RES from air, water, ground produced by all heat pumps sold from , in TWh (* Includes sales of reversible air/air heat pumps). New growth opportunities exist in both the commercial and industrial sectors, where heat pumps are being increasingly viewed as viable heating and cooling alternatives. The sanitary hot water segment in both residential and commercial applications also looks set to grow in the coming years assisted by favourable legislation changes. With the relative slowdown in new built activity, a switch towards the renovation sector is noticeable. High temperature heat pumps also provide a cost effective alternative in retrofit environments for existing buildings. Although not an entirely new phenomenon, the emergence and increasing popularity of Energy Supply Companies (ESCOs) is opening up new and innovative business opportunities comprising the deployment of heat pumps by organisations utilising energy contracting models. In terms of technology development, manufacturers continue the relentless drive for improved overall system performance, achieved through optimized components and more attention to the delivery of completely integrated solutions. This underlines the importance of the heat pump s interplay with the heat distribution system, and a need to focus on more intelligent and integrated controls. The emergence of hybrid systems (heat pumps deployed in conjunction with other renewable or conventional heating solutions) highlights the acceptance of the technology as part of an integrated energy efficient solution in both the retrofit and new built sectors. It also enhances possible fields of applications to nearly 100 % of the market. To meet the requirements of low energy buildings 2,00 1,80 1,60 1,40 Sanitary hot water Exhaust air HP Reversible HP Air-water GSHP 1,20 1,00 0,80 0,60 0,40 0,20 0,00 AT BE CH CZ DE EE* ES* FI* FR* HU IE IT* LT* NL NO* PL PT* SE* SK UK Figure 1-4: Greenhouse gas emissions saved by heat pumps sold from , in Mt (* Includes sales of reversible air/air heat pumps). Executive summary 7

10 European Heat Pump Statistics OUTLOOK 2011 Figure 1-5: European legislative framework impacting the heat pump market. Energy efficiency Ecodesign (ErP), Lot 1, 2, 10 (11 1 ) + Energylabel b el EPBD Use of renewable energy sources RES-Directive c RES in energy ergy statistics regulation Reduction of greenhouse gas emissions F-Gas regulation Overarching issues Regulation on energy statistics Ecolabel l for HP RoHS WEEE Energy taxation Green public procurement (efficient heating and cooling, air tightness and ventilation), systems integrating heat pumps, heat recovery and ventilation are now becoming increasingly common. In the broader context, heat pumps are seen as an enabling technology in the emerging smart grid infrastructure and smart cities initiative. Pilot programs and extensive field tests abound in many European countries, with utilities becoming convinced of the role heat pumps can play in grid balancing, supply and demand side management, and smart energy storage. The legislative framework put in place to underpin the drive for more renewables, better energy efficiency throughout the continent is now beginning to bear fruit. The key Directives (EPBD, RES Directive, Ecodesign and Energy labelling), are expected to provide a positive market impact on the inclusion and adoption of heat pumps in an emerging more energy efficient landscape (see figure 1-5). A look towards the future at this point is encouraging. For 2012 the macroeconomic environment is looking more favourable and first signs of recovery are now becoming visible in the sector. The overall market will remain challenging but an improved economic outlook, increasing awareness of the remarkable and often still untapped potential of heat pump technology, will fuel future recovery and market growth. 8 Executive summary

11 EUROPEAN ENERGY TRENDS 2 European energy consumption increasing trend to 2020 The general trend for European energy demand shows an increase over time and this increase is most likely to continue in the short to medium term. A number of reports in recent years point to the fact that there will be an increasing trend in the period to 2020, this will level out and decrease during the period between 2020 and Table 2-1 summarises the findings from a number of sources. As would be expected the contribution from renewable sources continues to increase in this timeframe and an increasing number of studies would be of the view that a lower and largely decarbonised energy supply, potentially even the use of 100 % renewable energy is possible by [1,2,3] Type (Mtoe) Present (IPTS) POLES 2006 (IEA) WEO 2007 (EC) PRIMES 2008 Baseline GHG reduction Reference Alternative policy Baseline Year Coal and Ignite Oil Gas Nuclear Renewables + industrial waste Imports-exports of electricity 2 n/a n/a n/a n/a n/a n/a n/a n/a 1 1 Total energy consumption Total energy-related CO 2 emissions (Mt CO 2 ) The impact on heating and cooling to 2050 It is forecasted that the Heating and Cooling sector will still remain the largest contributor to final energy demand in Specifically the renewable heating and cooling market, comprising residential, commercial and industrial heat pumps, biomass as well as solar thermal applications, is forecasted to grow rapidly. Together, they are forecasted to have a share of about 21 % and 45 % of total final energy consumption in 2030 and 2050 respectively. Table 2-1: Primary energy consumption in 2005 compared with 2020 and 2030 forecasts from different scenarios (values in Mtoe).[4] European energy trends 9

12 European Heat Pump Statistics OUTLOOK 2011 Figure 2-1: Heating and cooling technologies contribution to CO 2 emissions reduction (Blue Map and alternative scenarios). [5] Gt CO Gt CO BLUE solar 2050 BLUE heat pumps 2050 BLUE CHP Note: Excludes the impact of improved building shells on reducing heating and cooling loads. CHP water heating CHP space heating Solar thermal water heating Solar thermal space heating Heat pumps water heating Heat pumps space heating Heat pumps cooling In a recent report which looks at how the world can most effectively meet its energy efficiency and CO 2 reduction targets to 2050, the International Energy Agency cites heat pumps as the technology which can make the most significant impact in the building heating and cooling sector. In its technology roadmap report Energy Efficient Buildings: Heating and Cooling Equipment[5], heat pumps are singled out ahead of solar thermal and CHP as having the potential to impact most in the heating and cooling of buildings in the years ahead, and are also cited as a technology well suited to large scale deployment. Most interesting, heat pump technology will provide the strongest CO 2 reduction in cooling applications. A look at the three alternative scenarios developed by IEA is equally interesting. It reveals, that the technology that achieves the strongest initial support will be leading in Overall CO 2 savings are expected to be strongest if the BLUE heat pumps scenario is developed (see figure 2-1). 100 % renewables by 2050 dream or reality? Reaching a goal of 100 % renewables by 2050 either completely or to a large extent is crucial to overcoming the threats posed by the energy supply system to Europe s economy. The scenario developed by the European Technology Platform on Renewable Heating and Cooling allows two conclusions: firstly, a combination of all technologies using renewable sources can provide 100 % of the expected energy demand, secondly, heat pumps will play a significant role to achieve this goal (see figure 2-2). The implementation of this scenario would lead to a dramatic reduction in greenhouse gas emissions due to the reduced consumption of fossil fuel. Mtoe Solar thermal Aero/hydro HP Geothermal HP Geothermal deep Biomass heat TWh Figure 2-2: Heating potential by renewable energy source in the EU. [6] / European energy trends

13 The cost of renewables Three studies Roadmap 2050, ReThinking 2050 and Energy Technology Perspectives 2010 [7] underline the need for a robust policy framework with clear timetables and goals. They show the need for an immediate and substantial shift of investment decisions towards RES (renewable energy sources). They conclude, that the industrial revolution towards a different energy mix will not require new technologies, but simple political will. With regard to the cost of this transition, Roadmap 2050 found that the monetary resources required to achieve differing shares of RES by 2050 will largely be the same, the crucial difference being in the timing of when the costs are incurred and investments made. Under the various scenarios considered, in the BAU scenario, costs increase in a linear fashion over time, whereas the scenario with the largest RES share in 2050 requires an immediate channelling of investments towards renewable energy technologies. This is necessitated by the long-term nature of investments in the energy sector and the time it takes to build up both human and technical capacity. While such a bold move would be costly today, it is expected to pay off in the future by transferring financial resources spent today for energy imports to build up a more self sufficient, local, sustainable energy supply infrastructure. To be clear: this shift is rarely seen today in countries on a European and a world level and the situation is not made easier by prevailing economic uncertainty. This lack of action needs to be overcome quickly to avoid even harsher changes in the future. Momentum at European and national level The drive towards the use of more renewable energy is gathering momentum in the EU, whereby both Commission and Parliament have published their energy and climate strategy and initial steps towards their execution have been taken through various legislative acts. The key pieces of legislation address the use of energy from renewable sources, the energy demand of buildings, the energy efficiency of energy related products and the use and statistical documentation of renewable energy sources. These are dealt with in detail in chapter 3. However it is on the national level, where legislation is actually implemented and where decisions on financial and institutional support programs and schemes are made. If there is one common message from recent studies and reports, it is the need for much stronger institutional and financial support by member states governments. Governments must back political decisions to support using a larger share of renewable sources in the future, achieved through a significant and immediate shift of investment towards their use. Similarly, the proclaimed need for an increase in energy efficiency must be executed. The role of heat pumps The analysed studies illustrate that the use of all available renewable energy technologies is necessary if a goal of 100 % renewable energy use is to be achieved by Furthermore it is clear that the heating and cooling sector can and must undergo a transition towards renewable alternatives. This is reflected in the scale of the potential use of ambient energy from air, ground and water as already highlighted. European energy trends 11

14 European Heat Pump Statistics OUTLOOK 2011 Sources [1] European Climate Foundation (2010): Roadmap The Hague. Download at: [2] Eurelectric (2009): Power Choices: pathways to carbon-neutral electricity in Europe by Brussels. Download at: powerchoices2050 [3] EREC (2010): RE-thinking A 100% Renewable Energy Vision for the European Union. Brussels. Download at: [4] EEA (2008): Energy and environment report 2008, p35. Download at: publications/eea_report_2008_6 [5] IEA (2011) Technology Roadmap Energy Efficient Buildings: Heating and Cooling Equipment, Paris. [6] European Technology Platform on Renewable Heating and Cooling RHC-Platform (May 2011): Common Vision for the Renewable Heating and Cooling sector in Europe. [7] IEA (2010): Energy technology perspectives Paris. [8] Lastmanagement mit Wärmepumpen. Presentation at 9. Forum Wärmepumpe, 27./ , Nürnberg. Consequently, heat pump technology can make a significant contribution as part of Europe s future renewable energy mix. Compared with other fossil fuel energy sources heat pumps have distinct advantages:, Free and unlimited supply of energy from air, water and ground., Clean and green: as the greening of European electricity production continues. When used with green electricity or biogas, a CO2-free energy solution is available today, and current trends show the possibility to provide % (1 600 TWh) of projected electricity demand in 2020 from renewable sources [5]., Locally available: reducing transport costs as compared with oil and an expensive distribution grid in the case of gas., Smart Grid Integration: providing a thermal storage solution (tanks and underfloor heating systems) to transform intermittent green electricity into usable heat. In addition, the capacity to overcome time differences in supply and demand of heat results in a load balancing potential on the electric grid (peak shaving).[8] Achieving the 2050 goal is realistic but will require consistent government support to promote and support renewable technologies, make the necessary investments in infrastructure and create the necessary supportive business and societal environment to encourage widespread adoption. As most of these actions need to start immediately, it is high time for policy makers to acknowledge this fact and act accordingly. 12 European energy trends

15 EUROPEAN LEGISLATION AFFECTING HEAT PUMPS: 2011 UPDATE 3 While the economic crisis in different European countries prevails in the daily news, the need for a safe, secure and economically viable as well as sustainable and efficient energy supply remains of high importance. This goal, after all, cannot be reached by individual Member States (MS), but only by a group of strong, unified and dedicated governments on a European (maybe even at world) level. This section provides an update on the development of the policy framework relevant for heat pump technology. It is based on last year s documented status quo. It becomes increasingly obvious, that the framework conditions are changing. The promotion of the use of renewables can be observed more often at Member State level and legislation affecting the energy demand of buildings sets standards that make the employment of technologies using renewable sources more viable, sometimes even indespensable. From the perspective of heat pump technology, several important steps have been taken to prepare the grounds for an increased market uptake in the near future in all EU-27 and neighbouring European countries of the EEA. Legislative acts influencing heat pump technology include (but are not limited to):, Directive on the promotion of the use of energy from renewable sources (RES Directive)*,, Energy Performance of Buildings Directive (EPBD)*,, Ecodesign for Energy related Products-Framework Directive (ErP) and its implementing measures,, Regulation on energy statistics*,, Ecolabel framework Directive*, Energy labelling Directive*, and the, Energy Efficiency Directive*. Those acts marked with a (*) will be further discussed in this chapter with regard to their expected impact on heat pump market development. All of them set requirements for product and building efficiency, the use of renewables and the reduction of greenhouse gas emissions (GHG). In the future, it is expected that currently diverging requirements are integrated into a system within which, efficiency requirements are set by the implementing measures of the Regulation on Energy related Products,, information on product achievement is visualized according to the provisions of the Energy labelling and/or the Ecolabel Directives. The legal framework as it stands sets strong boundaries for the employment of technologies with higher energy efficiency and a shift in the energy mix from the use of energy from non-renewable to the use of energy from renewable sources, a situation that will most likely influence the market development for heat pumps positively. European legislation affecting heat pumps 13

16 European Heat Pump Statistics OUTLOOK The Directive on the promotion of the use of energy from renewable sources FOCUS, reducing final energy demand and related greenhouse gas emissions as well as securing a long term, stable and increasingly independent energy supply., sets the target for the overall share of renewables in total final energy consumption., presents the indicative RES targets to be reached by Member States., establishes a common framework of guidelines with regard to eligibility, statistical transfers, joint projects, guarantees of origin, administrative procedures, information and training and access to the electricity grid for energy from renewable sources that Member States have to transpose into their legislation in order to reach the defined targets. IMPACT ON HEAT PUMP TECHNOLOGY: POSITIVE, acknowledged as the technology that makes ambient energy from air, water and shallow ground useful (Art. 2 Definitions ). This applies to electrically driven and gas driven heat pumps alike., the amount of renewable energy used by heat pumps to provide heating and cooling will be calculated based on final energy., sets minimum requirements on seasonal efficiency to be reached at standard rating points. Only the contribution from those heat pumps that reach a minimum efficiency (SPF) (see Article 5 in conjunction with Annex VII) of the Directive will be counted. According to the latest EUROSTAT figures the average conversion efficiency of electricity generation (eta) in the EU-27 has reached 43,8 % this translates the required SPF to a minimum of 2,63. TIMELINE, Vote in the EP: , Published in the Official Journal of the European Union: , Came into force in all MS: , Transposition deadline: CURRENT MILESTONE Article 4 of the Directive sets the requirements towards adopting National Renewable Energy Action Plans (NREAP) by all Member States. These plans are a tool for guidance and control of the implementation status of the Member States and the Commission alike. The plans shall, set the Member States national targets for the total share of energy from renewable sources in 2020 and the contribution from the sectors transport, electricity and heating and cooling,, describe a development trajectory for the time horizon until 2020., outline adequate measures to be taken to achieve the aforementioned targets. The European Commission provided a template for the NREAP s in June 2009 and the MS had to provide a forecast document estimating the share of renewables to be reached, the distribution of contribution by the different sectors and the means on how to achieve the target by end By , the MS were obliged to provide their final versions of the plans. However only approx. 2/3 of the MS were able to fulfill this obligation in time. Since then, all MS have provided their NREAP s. All related documents are published on the Commission s Transparency Platform and will be updated bi-annually. [1] A first progress report by the Member States is due in December 2011, a Commission assessment will follow in December European legislation affecting heat pumps

17 ktoe RES-T (RES-E deducted) RES-E HP RES-HC (w-out HP) AT BE BU CY CZ DE DK EE EL ES FI FR HU IE IT LT LU LV MT NL PL PT RO SE SI SK UK Figure 3-1: The 2020 RES targets split by transport, electricity, heating/cooling and heat pumps. [2] If everything goes according to plan, the Union s 20 % RES-target will be slightly overachieved (expected RES share in 2020: 20,3 %) and only Belgium, Denmark, Italy, Luxembourg and Malta are planning to make use of the Directives Cooperation mechanisms. The contribution potential of heat pumps is largely overlooked in these plans. The low ambition Member States show for heat pumps (see figure 3-1) may become an advantage in the future. Should the target trajectories towards the MS RES targets not be achieved in the bi-annual revisions, heat pumps are an available and reliable option. Using them may be particularly tempting, as they are one of the most effective technologies when considering the target impact per Euro invested. In relation to Article 13 and the related Annex IV (implementation of several measures towards information dissemination to all interested parties and towards the establishing of an accredited education and certification system), the Commission has recently launched a stakeholder consultation on a special training initiative to support MS in implementing the RES Directive. The foreseen initiative will support projects on quality assurance, energy efficiency and renewable energy use in buildings. It will focus on the qualification and training of the building workforce with a special focus on national or regional needs. The initiative (to be executed within IEE ) is based on two pillars: 1) national platforms and roadmaps, 2) new or upgraded qualification schemes. European activities are foreseen to reinforce these two pillars and ensure mutual acceptance of results. This should include a knowledge/experience exchange and possibly even the creation of a common brand for certification. A first IEE call supporting projects towards the creating of national qualification platforms closed in June Additional calls on the second pillar are planned for 2012/2013. EHPA is operating its own certification and training program for heat pump installers (EUCERT) which complies largely with the requirements set [3]. EHPA is also participating in the IEE project QualiCert (Common quality certification & accreditation for installers of small-scale renewable energy systems) to provide input on the training and certification program for heat pumps and to learn how other associations have dealt with similar qualification requirements across MS. Initial findings show that the EHPA program is very advanced in covering the training and certification requirements and in its regional and professional scope. European legislation affecting heat pumps 15

18 European Heat Pump Statistics OUTLOOK 2011 EHPA TARGETS, EHPA and its members continuously disseminate information on heat pumps triple benefits to stakeholders, in particular to members of European and national parliaments., EHPA aims at making EUCERT known to all national governments., EHPA works closely with EUROSTAT on establishing the method for proper accounting of RES from heat pumps in energy statistics. 3.2 Energy Performance of Buildings Directive The recast of the Energy Performance of Buildings Directive (2010/31/EU EPBD) is in force since July FOCUS Improvement of the energy performance of new and existing buildings within the European Union via minimum requirements on, a framework for calculating the energy performance of buildings,, minimum requirements on energy performance of new and existing buildings, building elements and technical building systems,, the share of nearly zero energy buildings,, the energy certification of buildings (incl. a control system thereof), and, regular inspection of heating and air-conditioning systems in buildings. IMPACT ON HEAT PUMP TECHNOLOGY: POSITIVE, acknowledged as a technology that transfers heat from natural surroundings such as air, water or ground to buildings or industrial applications ( ). For reversible heat pumps, it may also move heat from the building to the natural surroundings. (Art. 2, paragraph 18 Definitions ). This applies to electrically driven and gas driven heat pumps alike and includes all types of heat pump application., Heat pumps benefit from a focus on minimum energy requirements for the building envelope., Heat pumps benefit from a requirement to consider the use of available heating alternatives prior to construction, among them heat pumps (Article 6). The comparison of different alternatives needs to be documented. This is mandatory for new building and shall be encouraged for existing ones., Heat pumps benefit from minimum requirements on the efficiency of heating, hot water, air-conditioning and ventilation systems alone or as a combination, as long as these requirements allow for a comparison of systems and energy sources used., With expected energy price developments and efficiency improvements, heat pumps will most likely benefit from the foreseen calculation of cost optimal levels for the energy performance requirements of buildings. Timeline:, Published in the Official Journal of the European Union: , Came into force: , Adoption and publishing of laws, regulations, administrative provisions related to Articles 2-18, 20 and 27. To be done by , Application of the rules must be done by:, for provisions related to Articles 2, 3, 9, 11, 12, 13, 17, 18, 20 and 27,, for all public buildings addressed in Articles 4, 5, 6, 7, 8, 14, 15 and 16 and, to other buildings., Application of Article 12(1) and (2) may be deferred to for rented units. 16 European legislation affecting heat pumps

19 , Commission: establish a methodology framework for calculating cost-optimal levels of minimum energy performance requirements for buildings and building elements by , Member States: report their results of the calculation of cost-optimal levels of minimum performance by , Member States: ensure that from , all new buildings are nearly zero energy buildings, and that from , all new public buildings (owned or occupied) are nearly zero-energy buildings. The number of nearly-energy buildings shall be developed via action plans setting measurable targets. The Directive abandons the previously valid threshold of 1 000m 2 of useful floor area and now applies to all buildings (except very small, special purpose or only temporarily used ones). The Directive is currently transposed by Member States into national law. The Commission in turn can judge the success of Member State activity via the foreseen reporting. The required reports can be included in the Energy efficiency plans (based on Directive 2006/32/EC). Member States can also ask the Commission for guidance for quicker implementation. EHPA TARGETS, EHPA and its members continuously monitor the implementation of the Directive into national law and evaluate possible impact on heat pump technology (i.e. for France, recognition of heat pumps in RT 2012, for Germany, recognition in EnEV etc. ), Give special attention to the development of the calculation methodology for the energy performance of buildings. Ideally, this method, as well as that for the minimum requirements for building technology is tied into the system of legislation and geared towards using the information provided via ErP information on heat., Evaluate the impact of a decreasing energy demand in the building stock on heat pump technology. How must products be adapted to accommodate for this change? 3.3 The Ecodesign for energy related products- Framework Directive; Lot 1 FOCUS, The Ecodesign for energy related products (ErP) Directive aims at establishing Ecodesign requirements for several product groups. Heat pumps are subject to the implementing measures of Lot 1 (boilers, kw output capacity, heating and combi-systems), Lot 2 (water heaters) and Lot 10 (air-conditioning units below 12 kw)., Energy consumption of the heating installation will become transparent to the consumer and motivate him to focus his choice on energy efficient products that use energy from renewable sources., The requirements will be set based on a common methodology for the calculation of each product s primary energy efficiency. For heat pumps this will most likely be possible based on either a low temperature (35 C) or a medium temperature (45 C) heat distribution system., The results of the calculation will be visualized in an energy label. For Lot 1 it is currently foreseen to display the primary energy demand, the efficiency class in a range from A+++ to G, the suitable heat distribution system and the variations of these values per climate zone. Other factors can be added. The energy label will advertise the performance of the product to the European legislation affecting heat pumps 17

20 European Heat Pump Statistics OUTLOOK 2011 Figure 3-2: Implementing measures to the ErP Directive with relevance to heat pumps. [4] prospective tenant or buyer. Lot 2 and Lot 10 have similar labels. In the case of combi-systems, this means that a single unit will have two labels, one indicating its heating efficiency, the other its hot water production efficiency. TIMELINE, 2007: preliminary studies for each product group., : Consultation forums with industry stakeholders on the content and technical details of the working document., 04/2011: Final working document provided to Member States. Commenting possible until , 9/2011: Final draft for interservice consultation and discussion in the regulatory committee., 01/2012: Vote in the regulatory committee, publication in the Official Journal of the European Union., : Regulation comes into force., : Products in efficiency class F-G banned from market., : Products in efficiency class C-E banned from market. IMPACT ON HEAT PUMP TECHNOLOGY: MOST LIKELY POSITIVE The implementing measure for Lot 1 enables the comparison of the efficiency of functionally equivalent heat generators for heating and of combi-systems for heating and hot water production independent of the energy source used (fossil fuel combustion, solar thermal-, electric or thermally driven heat pumps or cogeneration). The ErP makes the manufacturer or its representative, who places the Energy related Product on the market, responsible for the Energy Label and the CE marking. The challenge of this ECODESIGN is to eliminate disparities in the classification of performance between Energy related Products belonging to the same family. Comparison is done via the primary energy efficiency expressed as η (ETA). ETA is the ratio between the useful heat provided by the product and its annual primary energy consumption. ETA is calculated based on the performance of the heat generator, the heat distribution system, some system losses and the impact of the climate zone (3 reference climates are defined for Europe, AVERAGE, WARM and COLD). For heat pumps, efficiency is based on the climate adjusted performance (seasonal coefficient of performance scop) tested under EN and calculated based on pren Performance may be declared by the manufacturer or certified by an independent third party. Heat pump seasonal performance is determined for two heating systems i) medium temperature (usually equipped with radiators) (55 C) and ii) for new buildings with low temperature heat distribution systems (35 C). The manufacturer 18 European legislation affecting heat pumps

21 is free to declare his boiler fit for purpose for one of the two heating-systems. As ETA is based on primary energy consumption, the final energy demand is weighted with the Primary Energy Factor (PEF). PEF is the quantity of crude fossil fuel needed to produce one kw of usable energy, e.g. electricity, from extraction, refinement and transport to storage. The PEF of electricity is calculated by EUROSTAT as an average for Member States, regardless of their production facility. The PEF of 1 kwh electricity and of 1 kw fossil fuel is currently assessed at 2,5 and 1,0. It will be recalculated in the future. The manufacturer who places the heat generator on the market calculates ETA % PE and the corresponding annual PE consumption in kwh/a, for the reference European Climate AVERAGE. To simplify the understanding of the consumer ETA % PE will be rated in 10 color coded energy classes, from A+++ (ETA % PE >120 %) to G (ETA % PE < 40 %). These classes will be visualized on the energy label of the boiler. The consumer who chooses the better ETA % PE will benefit from financial and fiscal national incentives to be set-up by the EU Member States. ECODESIGN Lot 1 can also be used to calculate ETA for a heating system including several heat generators. In this case, it is currently discussed to give the responsibility for the systems label to the installing contractor. According to the ErP Directive 2007/32/CE, the installing contractor is the representative, who places the extended-boiler on the market and consequently, he is responsible to calculate and declare the new ETA on the final energy Label of the boiler. CURRENT MILESTONE After 4 years of consultation, the Commission has presented a final version of the working document, which is perceived positively by industry. This document, maintains comparability among functionally equivalent products, enables performance declaration for two different temperature distribution levels (35 C and 55 C), is applicable to three climate zones, incorporates system performance via an installer label. Once implemented, the ErP Directive will have far reaching implications for manufacturers, importers, consumers, contractors, consultants and architects. It is linked to the EPB Directive and will promote innovation in design and marketing of boilers. EHPA TARGETS, EHPA is largely pleased with the current status of the working documents and would welcome its quick implementation., Room for improvement is discussed with the European Commission based on detailed position papers (available on EHPA s website). 3.4 Energy labelling Directive FOCUS The energy label for heat pumps is part of the Directive on the indication by labelling and standard product information of the consumption of energy and other resources by energy-related products (2010/30/EU). It establishes a framework for a uniform, European wide provision of end-user information via a product label and information fiche. It applies to all new Energy related Products (ErP), with a significant direct or indirect impact on the consumption of energy and other essential resources during use. As such it also applies to heat pumps! Using this information, the consumer can make better-informed choices towards more efficient products. The Directive applies to all new products. European legislation affecting heat pumps 19

22 European Heat Pump Statistics OUTLOOK 2011 The requirements for each product (product group) will be defined through delegated acts. Once available, information on the energy efficiency (class) of a product must be brought to the attention of the end-user via the label itself and an information fiche. The performance of the product will be part of the label covering a range from A (best) to G (worst) performance with the option of adding classes A+, A++ and A+++ to accommodate for technical progress. IMPACT ON HEAT PUMP TECHNOLOGY: POSITIVE It is expected that the energy label used for heat pumps will be based on the systems efficiency determined via ErP Lot 1. In that case, the end-user can compare different, functionally identical heat generators and select the one that best suits his needs. Current knowledge of the transitional calculation method supports the opinion that heat pumps will be classified into the top classes of the label. CURRENT MILESTONE A delegate act for an energy label for heat generators is developed in parallel to the implementing measure for ErP, Lot 1 (boilers). The development is ongoing, final documents and a vote in the Council is expected for the end of 2011/beginning EHPA TARGETS, EHPA is largely pleased with the current status of the working documents and would welcome its quick implementation., Labelling classes should be maintained at currently proposed levels., The use of the efficiency class A+++ should be allowed from the start of the measure. 3.5 Commission Decision on an Ecolabel for heat pumps FOCUS The Ecolabel for electrically driven and gas driven heat pumps is based on Regulation (EC) n 66/2010 on the EU Ecolabel. The ecological criteria for heat pumps were published as Commission Decision 2007/742/EC. They cover all electrically driven, gas driven or gas absorption heat pumps up to an output capacity of 100 kw. Sanitary hot water heat pumps and exhaust air heat pumps are deliberately excluded. Requirements are stated for 1. Efficiency in heating mode (COP value at standard rating points), 2. Efficiency in cooling mode, 3. The global warming potential (GWP) of the refrigerant used (< over a 100 year period and a bonus for refrigerants with a GWP < 150), 4. the secondary refrigerant (must not be environmentally hazardous), 5. noise emission, 6. heavy metals and flame retardants (Cadmium, lead, mercury, chromium 6, PBB, PBDE) may not be used, 7. installer training, 8. documentation, 9. spare parts availability, 10. information leaflet, 11. information to appear on the label. 20 European legislation affecting heat pumps

23 These requirements do address the efficiency and environmental performance of the heat pump unit and also stress the need for proper planning (match of heat source, heat pump and building) and installation. The Ecolabel for heat pumps will be revised within the next year. One issue is its future within the set of legislative documents as mentioned before. Another issue is the limit in scope: outlined in the beginning, the Ecolabel does not cover the full product range of heat pumps. Considering, that the RES Directive makes reference to the Ecolabel in article 13, paragraph 6, (only those heat pumps shall be promoted, that fulfill the requirements of the eco-labelling for heat pumps). However Member States are free to set stricter requirements exceeding the requirements of the Ecolabel. CURRENT MILESTONE The revision process of the Ecolabel for heat pumps, has started in 2011 with an ad-hoc stakeholder meeting in Seville [5]. It is planned to extend the Ecolabel to all heat generators connected to a hydronic heating system and to connect it to Green Public Procurement criteria (GPP). The background study for a future Ecolabel is done by the Commission s research centre IPTS in Seville. At the stakeholder meeting it was acknowledged that the major environmental impact from heat generators is caused by emission related to operations. This is already covered and will most likely be meaningfully reduced by the application of the Energy label. Remaining emissions from a leakage of F-gases is governed - and will be similarly constrained in the future by the F-Gas regulation. Waste from production and dismantling can be recycled to a large extend due to the high metal content of the product. It became clear, that heat pumps (and other heat generators connected to hydronic heating systems) are nearly completely governed by legislation across their useful life which may make an Ecolabel for this product group less necessary than for others. The discussion will continue with additional stakeholder meetings in the fourth quarter of EHPA TARGETS, explain the peculiarities of heat pump technology to the stakeholders, develop an intra-industry perspective on a future Ecolabel 3.6 Energy efficiency Directive (EED) The Energy efficiency legislation will replace both the Cogeneration Directive (2004/8/EC CHP Directive ) and the Energy Services Directive (2006/32/EC ESD ) and extend to all sectors with energy saving potential. FOCUS Improvement of the energy efficiency of products and installation by setting a (initially non-binding) energy efficiency target for Execution is mainly planned via Member States by encouraging them to, set a national energy efficiency target for 2020., establish national energy efficiency obligation schemes achieving annual savings of 1,5 % (executed via energy suppliers that in turn have to encourage their clients)., establish heating / cooling map., make use of high efficiency combined heat and power plants (CHP) connected to efficient district heating and cooling. European legislation affecting heat pumps 21

24 European Heat Pump Statistics OUTLOOK 2011, adopt authorization criteria for new electricity production taking CHP and district heating into consideration. Criteria should include requirements on urban and rural spatial planning requirements., establish precautions that make a connection of these installations to district heating and cooling networks mandatory., establish priority or guaranteed access of high-efficiency cogeneration to the electricity grid., create certification schemes for the providers of energy services, energy audits and other energy efficiency improvement measures including for installers of building elements such as for heating, cooling and hot water., promote the energy services market (ESCOs) and its access for SMEs., remove barriers to energy efficiency, notably the split of incentives between the owner and tenant of a building or among owners. IMPACT ON HEAT PUMP TECHNOLOGY: UNCLEAR, CURRENTLY NEGATIVE, In its current draft, the Directive gives too much focus on large scale installations. It seems that the Commission believes that an increased efficiency of these installations, connected to district heating grids will be sufficient to solve the lack of achievement towards the energy efficiency target., The draft does not mention the efficiency potential of buildings and of distributed energy (heat and electricity) production therein. This is seen as a major shortcoming., The draft focuses largely on a mandatory prerogative on the combination of CHP/district heating. While this combination has its merits, it is unlikely that it is always the most cost efficient solution. Instead, technology neutral, least lifecycle cost orientated planning should be encouraged. Sources [1] EC (2010): Renewable energy transparency platform. renewables/transparency_ platform/transparency_ platform_en.htm [2] NREAPs and own calculations. [3] See for a detailed description of the program [4] Baert, E. (2011): Ecodesign for Energy related products challenges for heatpumps. European Heat Pump summit 2011, , Nürnberg [5] heating/stakeholders.html [6] efficiency/eed/eed_en.htm TIMELINE, Draft: , First reading procedure on-going in the EP and the Council., First reading in the EP: (tentative) EHPA TARGETS, Make the Directive applicable to the whole heating sector in order to awake the potential of this sleeping giant, establish special recognition for heat pumps as an energy efficiency technology for heating and cooling., Integration of distributed heating and cooling systems, in particular those using RES; acknowledgment and support of their efficiency potential., Technology neutral approach based on a least lifecycle cost approach., Ensure recognition of the links between different already existing legislation and the EED. 22 European legislation affecting heat pumps

25 INDUSTRY AND TECHNOLOGY TRENDS 4 This section will examine key developments within the European heat pump sector from both market and technology perspectives. 4.1 Market development The rapid expansion of the European heat pump sector in recent years brought with it many changes and challenges that typify a growing and more complex market. The heat pump segment was once only a small part of the much larger Heating, Ventilation and Cooling (HVAC) market. At that time, a fragmented market saw many small manufacturers focusing on local consumers, with the technology for the main part being ignored by the large heating companies. With increasing sales numbers the situation started to change around the year Today nearly all manufacturers for both heating and cooling equipment offer heat pumps as part of their product portfolios. Where internal development was judged to be too slow or not economically feasible, several larger players have simply acquired know-how, production capacity or access to markets. As economies of scale apply not only to production, but also to financing, sourcing and distribution, smaller manufacturers are now finding it increasingly difficult to compete with multinational giants. This development is part of an overarching trend towards the provision of a comfortable living environment in increasingly energy efficient houses. The needs of the market no longer revolve just around the product be it for heating, cooling or hot water production. Instead a more complex, better educated and discerning consumer base is demanding solutions that include planning, installation and servicing and require a change in the way markets are addressed by manufacturers alone or in cooperation with others. Traditional Oil/Gas Boiler Heating Only Heat Pumps Reversible Heat Pumps Traditional A/C Systems Heating Extending Current Product Range Towards Cooling Extending Current Technology Towards Heating (Reversible) Cooling A/C Price Pressure Technology Shifts Crowded Market New Distribution Channels New Low Cost Entrants Figure 4-1: The changing landscape of the European heat pump market. Industry and technology trends 23

26 European Heat Pump Statistics OUTLOOK 2011 Figure 4.1 illustrates the changing landscape of the market. Traditional European heat pump manufacturers are seeing a squeeze of their market segment from the traditional boiler manufacturers on one side and the air-conditioning suppliers on the other. The boiler group, recognizing the future limitation of their gas or oil offering have extended their product portfolios to include heat pumps. The air conditioning group, principally dominated by well known Asian brands have migrated into the heating space, offering cost effective, predominantly split systems to the market. The end result is the emergence of a relatively crowded highly competitive new landscape best described as a battle ground. This has led to intense price pressure in some markets, technology shifts, and the emergence of new distribution channels. CONSOLIDATION OF MARKETS Although the market has seen many new entrants in recent years, at the same time there is evidence of some consolidation. Where in the past the heating market was dominated by a number of large heating groups, these are expected to develop after some reconfiguration into a similar number of large European Heating and Cooling Groups. These groups, seeing the emerging heat pump opportunity have either acquired a heat pump manufacturer or developed the technology themselves. Examples include:, BDR Thermia, comprising De Dietrich (FR), Baxi (UK), Brotje (DE) and Sofath (FR), Bosch Thermotechnik, comprising IVT (SE) and Florida Heat Pump (USA), Daikin Europe, comprising Rotex (DE) and Airfel (TR), Danfoss, comprising Thermia (SE), Steinmann (CH), Avenir Energie (FR) Nomann Etek (NO), KH Nordtherm (DK), Nibe Industrie, comprising Schultess Group (CH), including Alpha Innotec (DE), KNV (AT) and ABK (NO), Vaillant Group, Viessmann, comprising SATAG Thermotechnik (CH) and KWT (CH) The most notable recent development is the acquisition of Schultess Group by Nibe which gives the Scandinavian manufacturer access to additional distribution channels, namely in the German speaking countries and also provides complementary technology and expertise. The consolidated power of both companies will surely have an impact on the heat pump market. INCREASED COMPETITION & PRICE PRESSURE As with any market that shows rapid growth over a short period ( ), the European market has seen many new market entrants, keen to capitalise on the opportunity. One of the positive effects of the current economic crisis has been the demise of many of those who entered the market opportunistically, primarily for short term gains. What remains now is a good number of larger companies, who show an ongoing interest in the technology and recognize the future opportunity of heat pumps. Many of them now offer complete product ranges, often also integrating heat pumps into a new product group of hybrid systems. Further consolidation may be expected in the years ahead, driven by the cost advantages that large scale mass production can deliver, coupled with the increasing requirements for quality in planning, installation and maintenance that can best be delivered by larger players. Increased competition coupled with the recent worldwide financial and economic crises, has brought more intense price competition in all markets, and in particular in the lower cost and entry-level segments. However the majority of heat pumps are still sold as a premium product. A mass market for heat pumps with a wide recognition of the technology on all levels of society has only developed in a few countries, namely Sweden and Switzerland. 24 Industry and technology trends

27 Figure 4-2: Changing trends in European distribution. GROWING PRESENCE OF AIR-CONDITIONING MANUFACTURERS A notable development in the European heat pump sector is the growing presence and expansion of established manufacturers of air conditioning systems. They include the well-known Japanese Brands such as Daikin, Mitsubishi, Panasonic, Sanyo, and Hitachi. Korean suppliers Samsung and LG are currently establishing a presence. In a first instance, many of these companies have simply deployed their traditional reversible cooling products in heating mode. The next step has involved optimizing the technology specifically for heating applications. By leveraging their strong brand awareness and technology they have already taken positions in many of the markets in which they have entered. They focus on promoting the advantages of their variable speed systems, in compact footprints offering good performance at competitive prices. The challenge that many of the air conditioning players continue to face however is establishing distribution channels in the heating sector, outside of their traditional cooling channels. This is particularly acute in well established heat pump markets such as Scandinavia and the German speaking countries, where long established brand names dominate and control the heating channel. CHANGING DISTRIBUTION CHANNELS The sector is also witnessing fundamental changes to how products are distributed to the end consumer. Traditionally a product has predominantly been moved through 3 step channels: from manufacturer to distributor / wholesaler, on to installer and then to the end consumer. Many manufacturers have also had OEM arrangements with some of the larger boiler manufacturers and this has also accounted for a substantial proportion of the market to date. Current trends are seeing an increase in business directly to installers (2 step) and possibly in the future systems could be sold directly to DIY outlets or online to end consumers. The emergence of sector specific solutions providers is yet another trend. Specific applications comprise solutions for retail companies or datacentres, or to other commercial sectors. Much of the change in distribution channels is driven by the need to maintain profit margins and hence this disintermediation. It is however expected that traditional distribution channels will remain in place in the coming years. Many of the new entrants to the market, including the air-conditioning manufacturers have followed a strategy of supplying installers directly and whilst providing a price advantage on the one hand, it also raises the need for increased support and the associated costs thereof. Figure 4-2 illustrates how the emergence of new channels is expected to alter European Distribution in the years ahead. Industry and technology trends 25

28 European Heat Pump Statistics OUTLOOK 2011 Table 4-1: Standard components and improvement potential. 4.2 Technology development OPTIMISED COMPONENTS By and large, heat pumps consist of a limited number of component types. Table 4-1 shows these components and also those types, which can offer various levels of performance: Standard component Highly efficient/ improved component Compressor Standard compressor Optimized compressor for heat pump application Valves Mechanical expansion valve Electronic expansion valve Heat exchanger: evaporator Standard brazed plate HE Micro-channel HE large evaporator surface Heat exchanger: condenser (Brazed) plate heat exchanger Microchannel heat exchanger. Circulators ( pumps ) Standard pump High efficiency pump Controls Simple controls Adaptive controls, connection to house grid, Internet Fans and motors Standard fan Optimized blade, high efficiency motor Refrigerant R410a, R407c dominate Reduced refrigerant charge, low GWP refrigerant (parallel work on efficiency improvements necessary) Storage tank Storage tank optimized for the Optimized insulation, (External to the unit, heating demand of the building, storage solutions optimized but equally important) different solutions for insulation for larger share of RES integration in smart grids Heat distribution Floor/wall heating, fan coil units, Low temperature heating standard radiators radiators, mini-hydronic heating with fan coils, more energy efficient fan coil units Proper component choice is very important for heat pump performance. Individual improvement can be achieved by better compressors, electronic expansion valves, larger or optimised heat exchangers, optimised controls and energy efficient pumps and fans. All need to be adjusted towards the refrigerant used. The relentless drive for better performing systems is driven in part by the policy framework at European and National level. As result of current policy action, future requirements demand, the use of highly efficient circulators (from ),, the use of highly efficient fans (ErP, Lot 11),, minimum performance (based on seasonal primary energy efficiency eta) as a barrier to market entry for low efficiency products,, more ambitious performance requirements for grants, subsidies and support measures, and, labelling of heat pump units and systems based on primary energy efficiency. Heat pump design needs to accommodate for efficiency and cost requirements under demand side conditions. It would be insufficient to just optimise the heat pump unit in isolation. Instead the impact of components in terms of their system impact (including heat source and heat distribution) must be considered already at the design stage. Market success is the result of balancing efficiency and cost vs. an achievable price for the comfort level required by the consumer. It also depends on applying to the feeling of the consumer doing good with heat pumps is a message not yet fully developed in the industry. Figure 4-3 shows a simplified schematic diagram of a compression heat pump with its main components. 26 Industry and technology trends

29 Compressor air high efficiency cy brine pump hot water tank space heatig buffer tank expansion valve building ground heat source heat pump p heat distribution Figure 4-3: Main components of a compression heat pump. MODULATING SYSTEMS / CAPACITY CONTROL The increasing success of air/water units has made capacity modulating heat pumps more and more popular. This is due to three reasons: 1. Capacity modulation provides an efficiency advantage compared to fixed capacity solutions over the operating range, due to advantages in part load operation. 2. Capacity modulation allows for the installation of smaller units, while at the same time allowing coverage of a significant proportion of the total heat demand of a building. 3. Capacity modulating units bridge the gap between the high capacity needed at low outside (air) temperatures and potential overcapacity at high outside temperatures. A direct relation exists between the temperature of the energy source and the capacity provided by the heat pump: the lower the source-temperature, the smaller the capacity provided and vice versa (see figure 4-4). A heat pump designed to cover a large part (if not 100 %) of the energy demand at design conditions ( 10 C in average climate) will consequently be overdimensioned at warmer ambient temperatures. Fixed speed units overcome this limitation by onoff operation. In this mode overall system efficiency decreases due to losses incurred following successive compressor starts. Capacity modulating units change the compressor speed (and thus the capacity provided). While this leads to capacity (kw) Heat demand fixed speed unit capacity modulating unit temperature C Figure 4-4: Capacity as a function of outside temperature for fixed and capacity modulating units (this figure applies to geothermal units, curves are similar for air-source heat pumps). Industry and technology trends 27

30 European Heat Pump Statistics OUTLOOK 2011 a lower efficiency at full load operation, it results in superior performance under part load conditions. As heat pumps operate most of the time at approx. 2 C outside temperature (covered by part load operation) capacity modulation bridge the gap between proper sizing and efficiency over the full operating range, especially when using air as the energy source. Capacity modulation is most often achieved by using frequency controlled inverters, a technology that originated in the (reversible) air conditioning market. Whilst these units are now optimized for heating, they still offer the benefits of compact size, attractive price points and flexibility. They have thus made inroads in some of the emerging growth markets with milder climatic conditions, such as the United Kingdom. Their use is becoming increasingly popular as part of a hybrid system in combination with existing (fossil fuel) boilers, particularly in the renovation segment. In addition, the currently set minimum efficiency requirements for air-source heat pumps (ErP, Lot 10) are difficult to reach with fixed speed compressors, supporting an already existing trend towards capacity modulating units in the future. IMPROVED CONTROLS Controls are at the heart of the heat pump system and can have a significant impact on its performance. As they manage the integrated operation of various components, vendors are therefore faced with a number of challenges. Firstly, they need to combine the different components in their system in the most efficient manner. Secondly, as many installations are climate, environment, and application specific, the system has to allow the flexibility for the system to be configured to meet individual requirements. Thirdly vendors are challenged with making their control architecture both intelligent and user friendly, so it can adapt to changing conditions and requirements, and also be used in as intuitive a manner as possibly by installers and end consumers. In more recent times a new challenge has emerged involving the requirement to integrate and communicate with other controls and heating sources, for example solar or traditional gas boilers in the case of bivalent or hybrid heating systems or home energy management systems and smart grids. More work will be necessary to establish a communication standard to allow this kind of information interchange. Making use of a heat pump systems storage capacity for intermittent electricity sets more ambitious requirements in terms of a better understanding of user behaviour and requires the integration of weather data into the control strategy. This will continue to present challenges and opportunities for heat pump manufacturers. HYBRID SYSTEMS Innovation continues apace around the integration of different heat sources into hybrid systems (see figure 4-5). They address limitations connected to single source/single technology applications and usually provide advantages in terms of, energy source flexibility,, energy use efficiency,, reliability, reduced emissions, and (or), better economics. As advantages related to one of the aforementioned points are often connected to disadvantages in the other, additional research is needed to deliver cost optimal solutions. Many manufacturers are now offering complete systems that may be used in bivalent or tri-valent mode, mainly combining heat pumps with boilers (fossil or biomass), solar thermal collectors or PV panels. Such systems are becoming particularly relevant in the retrofit/renovation market segment whereby renewable components may be added to existing heating systems. This is also developing to a point whereby heat pumps are being integrated with Solar PV and CHP installations, indicating that heat pumps not only provide a suitable 28 Industry and technology trends

31 regional planning / architecture / systemss design thermal storage aerothermal hydrothermal geothermal solarthermal rmal biomass Photovoltaics (roof/wall) green electricity small scale heating grids district heating smart electric grids Figure 4-5: Combination options for different energy sources into heat pump based hybrid systems. [1] alternative to other conventional and renewable heating options, but also complement the other range of renewable technologies in both new built and renovation situations. THE YEAR OF THE APP When reviewing this year's industry show, ISH in Frankfurt, facilitating the integration of heat pumps into the household information infrastructure and even connecting them to the internet was one of the most important and noticeable trends. The majority of manufacturers are now offering some form of connectivity either via the user s local internet access point or via a GSM modem. The primary application area is the provision of access to live data from the unit enabling easier performance checks and maintenance. This data is generally presented via a standard PC and, also in an appealing visual form via specific user interfaces such as several smartphone applications in common use. For the future, connected heat pumps offer two major benefits:, they provide performance data to the manufacturer and allow a better understanding of real seasonal efficiency as well as on influencing factors, bottle necks and improvement potential. This knowledge may enable manufacturers to identify and correct errors early, thus improving consumer satisfaction. It will also present new options for products and services to be offered. Especially so-called performance warranties will become possible based on experience gained from a large number of available life performance datasets., in combination with better controls, they enable learning processes on user behaviour. In combination with weather (forecast) data, a demand side optimization is possible. This functionality will in particular contribute to the integration of more RES into the grids. Ironing out technical obstacles to a more widespread use of smart grid ready heat pumps and smart electric grids is the focus of several projects and project applications. Next to the hardware, a standard communication protocol is required to allow for data exchange between components, units and the grid. As an example: If the heat pump knows, that Monday to Friday, between 7:00 and 16:00, there is no tap water draw off, it can adjust loading times of the sanitary hot water storage accordingly. For summer times, this usually means, that all sanitary hot water can be prepared during daytime using PV electricity, which is usually available in abundance. This not only avoids problems in the stability of the electric grid but also provides sanitary hot water from nearly 100 % of renewable energy. Industry and technology trends 29

32 European Heat Pump Statistics OUTLOOK 2011 HIGH TEMPERATURE SYSTEMS Increasing maturity of technology has led to an extension of its operating boundaries and application fields beyond low temperature heat distribution via floor/wall heating. Heat pumps with one or two compressors can efficiently achieve 55 C and increasingly often even 65 C. This enlarges their market potential to that part of the renovation segment, where medium temperature radiator system (45 55 C) are employed. This enables heat pumps to replace gas or oil boilers, without necessarily incurring the expense involved in replacing the existing heat distribution system (e.g. radiators). Nearly all manufacturers are now offering such products in their portfolio. A word of cautions seems however necessary: efficient heat pump operation requires proper dimensioning by an expert. Simply exchanging the existing boiler with a heat pump, in particular when connected to high temperature heat distribution systems (65 C and more) is currently not recommended. SANITARY HOT WATER SYSTEMS Heat pumps always played a prominent role in the provision of (sanitary) hot water. During the 1980s, sales in this product category already reached many tens of thousands of units per year. It is now on an upward trajectory once again with these products establishing significant positions in European markets such as the German speaking countries and France. Proposed changes under the energy efficiency and building efficiency legislation will create opportunities as smaller and in particular wall-hung air source heat pumps are being proposed as an alternative to meet this new regulatory environment. They may be deployed in new built or renovation situations as a direct replacement or alternative to electric water heaters. Many manufacturers are currently introducing products to the market targeted at this segment. It will be challenging to hit the correct price point and form factors to be a viable replacement offering. The new European Norm for testing these units (EN 16147) will put pressure on manufacturers to further increase performance. A strengthening of this effect is expected to be caused by the minimum efficiency requirements set by ErP, Lot 2 and the related mandatory efficiency label. Table 4-2: Properties of different refrigerant options.[2] ENVIRONMENTAL FRIENDLY / NATURAL REFRIGERANTS The use of many refrigerants is highly regulated due to their global warming potential (GWP). Refrigerants covered by the F-Gas Regulation can only be treated by experts and according to the RES Directive only those heat pumps that fulfill the requirements of the EU-Ecolabel shall be supported by Member States. The latter limits the use of refrigerants to those with a global warming potential Non-HFC HFC Refrigerant physical properties Cond. Press. ODP GWP Life Flamm Toxicity MPa (IPCC4) Year -ability R410A Azeotrope No Low R407C Zeotrope No Low R32 Single Low* Low HFO1234ze Single days Low* Low*** HFO1234yf Single days Low* Low*** HFO mixture Under investigation Low Propane (R290) Single <3 Some days High Low CO 2 (R744) Single No Low** Ammonia (R717) Single Low High * According to ISO817 draft ** Practical limit is 0.1 kg/m 3 according to EN378 *** Based on currently available data 30 Industry and technology trends

33 (GWP) below (based on the IPCC 3rd assessment report). In addition, a phase down of the use of established F-Gases is currently discussed by the European Commission as part of the revision of the F-Gas Regulation. The industry strongly supports a cautious approach towards the use of F-Gases and has made considerable efforts to reduce losses in production, operation and dismantling. The total emission of a product does not only depend on the GWP, but also on the refrigerant charge per unit and the systems operating efficiency. Thus the total environmental impact of heat pump systems is more appropriately identified by using a lifecycle approach that includes the total emissions of the product (as used in the TEWI method). Within such a boundary condition, the industry should be allowed a choice of refrigerants. Such a choice is particularly important as no single refrigerant exists, that can be used with the same economic and environmental efficiency accross all application requirements (see table 4-2). The ongoing revision process of the F-Gas Regulation has triggered considerable research and development to explore the efficient use of natural refrigerants (CO2, Ammonia and hydrocarbons) and the development of new synthetic refrigerants. Known replacements (HFO1234yf, HFO1234ze, blends of these refrigerants and other HFCs) show a much lower GWP than the typical HFCs currently in use. Both development pathways have their disadvantages: the use of natural refrigerants comes at the cost of reduced efficiency, flammability or toxicity, while new synthetic refrigerants are not yet completely understood with regard to safety and their impact on the environment. An ideal replacement is not yet available. The industry s approach is to use HFCs with care, to reduce refrigerant charge as much as possible, and to recover refrigerant from heat pumps that have reached the end of their useful life. 4.3 Thermally activated heat pumps Thermally driven heat pumps are a small yet promising segment of the heat pump market. They proof useful for several fields of application and contribute to the claim that heat pump technology can meet nearly all requirements in the market place for heating, cooling and DHW. TECHNOLOGY OVERVIEW The major difference between the two types of heat pump technology is their approach towards compression: where compression heat pumps employ a mechanical compressor (driven by an electric motor or combustion engine), thermally activated heat pumps achieve its compression by thermal means. Thermally driven heat pumps (sorption heat pumps) can further be differentiated into absorption and adsorption heat pumps. In an absorption heat pump, the evaporated refrigerant is absorbed in a liquid solution (e.g. ammonia/water). The necessary drive energy for the gas absorption heat pump is provided by a modulating gas burner (see figure 4-6). A special type of absorption heat pump, the diffusion-absorption heat pump, replaces the solvent by a bubble pump and requires no electrical drive energy. Absorption technology is mature and reliable. It has been used in refrigeration applications for decades. Its application for heating is merely a refrigeration cycle in reverse mode. Adsorption heat pumps use water as a refrigerant. Transfer for ambient energy to the system is achieved by evaporating the water. The water vapour is adsorbed at the surface of a solid (e.g. granulated zeolite). This reaction releases heat at a higher temperature level. Once the zeolite is saturated, the water is expelled in a desorption phase using the heat of a gas burner (see figure 4-7). This process runs in a vacuum. Energy to drive the heat pump is necessary during sorption and desorption phase and it is usually provided by a modulating gas burner. Whereas Industry and technology trends 31

34 European Heat Pump Statistics OUTLOOK 2011 Figure 4-6: Operating principle of an absorption heat pump. absorption functions continuously, adsorption technology is a cyclic process (adsorption/desorption), which appears to be continuous due to the response time of the heating circuit. Possible ambient heat sources are air, water and ground as well as waste heat. For technological reasons (thermal compressor), a sorption heat pump uses a smaller amount of renewable energy than an electric heat pump (based on final energy). Considering the primary energy, the performance is commonly declared as the gas utilisation efficiency (GUE). A typical GUE of 1,3 (gas driven heat pump) is comparable to an SPF of 3,3 (compression heat pump) in terms of energy use and CO2 emission reduction (assumption: primary energy factor of 2,5). Key performance factors of thermally activated heat pumps are:, Contribution to EU energy and climate targets: CO2-emissions reduction of 30 to 40 % compared with traditional heating technologies, primary energy savings and efficient use of energy, diversification of energy sources., Application in areas with insufficient electric grid (extra load on the grid is negligible) and in areas with rough climates (and available gas supply)., Lower cost for drilling (GSHP) due to the need for a smaller heat source and reduced need for back-up/bivalent systems due to stable output power., Feed-in temperature up to 70 C: compatible with retrofit applications and DHW requirements., Environmentally friendly refrigerants (H2O/NH3 or H2O/Zeolite): non-fluorinated substances, no global warming potential., Reversible heating & cooling possible. Figure 4-7: Operating principle of a gas adsorption heat pump. 32 Industry and technology trends

35 APPLICATION FIELD High output temperatures of thermally activated heat pumps allow their direct use with existing heating systems. Due to their design for use with (very often based on radiators) hydronic systems, thermal heat pumps easily integrate with other heating technologies (solar energy systems, condensing boilers or electrical heat pumps). Thermal heat pumps are receiving increased interest in the market place due to the mentioned advantages leading to high growth rates of sales numbers in all market segments and geographic areas that are currently addressed, however this growth is developing from a small starting base. MARKET DEVELOPMENT The sale of high quality, reliable absorption heat pumps is increasing [3]. In the light commercial market segment more than systems are in operation across Europe by the end of 2010[4]. Higher technology awareness and market availability are expected to create additional demand in several European markets. While still characterized by non uniform sales volumes across Europe, the technology is developing even faster than the average heat pump market in Europe and is experiencing a double digit growth rate. Current estimates (primarily based on growth rate in light commercial market) are summarized in figure e 2012e 2013e 2014e Figure 4-8: Gas sorption heat pumps: Total sales in DE, NL, UK, IT. (Source: Robur/BSRIA) Europe is the most active area in the development and construction of sorption heat pumps, both large (light commercial applications) and small-capacity systems (residential applications). Several major players (Bosch Thermotechnik, Robur, Thermea Group, Vaillant and Viessmann) are by now active in the market segment of gas sorption heat pump solutions. Other European utilities are developing their own programs for accelerating the introduction of this technology and offer their customers an additional option to best suit their needs for comfort and reduction of environmental foot print. Gas Terra (NL) in particular has created a comprehensive and informative book about thermally activated heat pumps (available on their website). POLITICAL SUPPORT European countries have defined concrete targets to reduce carbon emissions in order to protect the climate. Thermally activated heat pumps benefit from these requirements, as they use renewable energy, reduce primary energy demand and significantly reduce CO2 emissions. They are especially suited to be used in the renovation segment of existing buildings, where they can be employed without an impact on the electricity grid. In several European countries, thermally activated heat pump technology is being promoted through financial incentives positively supporting consumer decisions towards adopting new technology in the market. The European commission treats thermally driven heat pumps like electrical ones and includes them in the same pieces of legislation. Performance requirements are adapted accordingly. Sources [1] Nowak, T. (2010): 100% renewable energy from hybrid systems incl. heat pumps. Presentation at the 1st conference of the renewable heating and cooling platform. Bilbao [2] Dieryckx, M. (2011): New refrigerants in heat pumps: perspectives of a leading equipment manufacturer. Presentation at the 4th EHPA European Heat Pump Conference. London, [3] BSRIA Ltd - Worldwide Market Intelligence: HVAC Overlapping Study report 52093/1 - June 2009 [4] Ecodesign of Boilers - Market Analysis Task 2; Task 4 September 2007 [5] Renewable Energy Sources Directive (2009/28/EC) Industry and technology trends 33

36 European Heat Pump Statistics OUTLOOK EUROPEAN HEAT PUMP MARKET STATISTICS While heat pumps are by now largely recognized in all Member States, numbers are still collected in only a few official energy statistics. This is partly caused by the fact that a standard data collection approach for heat pumps is still missing across Europe, partly by the fact, that Member States have not found heat pumps important enough to count their numbers separately. Thus, the EHPA Outlook 2011 statistics and marked report can still be considered the most comprehensive document on the European Heat Pump market. For the future, accurate statistics are indispensable to guide governments in setting incentives, in channelling supportive resources both institutionally and economically and in measuring the success of such activity. The European Heat Pump Outlook 2011 analyses the sales statistics and market development for twenty (20) European countries: Austria, Belgium, Czech Republic, Estonia, Finland, France, Germany, Hungary, Ireland, Italy, Lithuania, Norway, Poland, Portugal, Slovakia, Slovenia, Spain, Sweden, Switzerland and the UK. Chapter 5 gives a general outline describing framework conditions, while chapter 6 describes the national market conditions. Chapter 7 widens the horizon with country profiles for Canada, China, Japan and USA. The numbers presented here are based on industry sales figures accumulated from the information provided by the different national heat pump associations. The number of countries covered has increased again from 17 to 20. Portugal was added for the first time, but as available data ranges back to 2005, the past years tables were updated, enhancing the number of countries included in the longitudinal data series to 13. For the future, the report is expected to include even more countries, as interest to prepare national sales figures according to the EHPA questionnaire (Annex II) is increasing. More markets are expected to reach a size in the future, where future development is perceived to be in need of an overarching infrastructure. This requirement is usually met by the establishment of an industry association to address issues of information dissemination and (often also) quality assurance. It is most often these associations that also collect statistical data. A major change over last year s edition is an increased level of detail: The category of reversible heat pumps now shows more sub-categories and the category of thermally driven heat pumps was added to the questionnaire. For the first time, an evaluation was also made by installed capacity (<20 kw and >20 kw). These steps allow for a more accurate description of the heat pump market and its development trends. More details on how we count can be found in Annex I. This report maintains the focus on heat pumps that provide a heating function and/or produce sanitary hot water. It includes air/air units in those countries where they provide a significant amount of heating. The underlying rule follows the assumption that air/air units used in cold climates are dominantly used for heating. This applies to the Scandinavian markets and this reasoning has now been extended to the Baltic States. For the first time, parts of the air/air heat pumps sold in Italy, France, Portugal and Spain were also included. This is based on a study performed in Italy, showing that 21 % of all reversible air/air heat pumps sold in Italy are part of a hybrid system whereas 9,5 % are the only heat generator 34 European heat pump market statistics

37 in the respective building. As heating is a necessity in wide parts of the Mediterranean, 9,5 % of all reversible air/air heat pumps were included. Similarly, industry data shows that all VRF systems provide heating and cooling alike a fact that led to the decision to include them throughout Europe with 80 % of the reported numbers. A 20 % discount was taken on the numbers presented to avoid an overestimation of their contribution. Past years statistics were adjusted accordingly to allow for a proper comparison of growth rates. 5.1 European heat pump market development The European market is (still) influenced by three major factors: 1. The price relation of the different energy sources and technologies (in conjunction with the investment cost of the respective heating system) expressed in /kwh th. 2. The European building markets, in particular the market for new buildings and for renovations. 3. A policy framework consisting of institutional and (even more important) financial subsidy schemes on a European and on a national level favouring energy efficiency both for buildings and products and renewable energy sources. Policy measures are fuelled by increasing recognition of risks in supply security, price development and environmental impact of non-renewable sources. PRICE RELATIONS OF ENERGY SOURCES Heat pumps are a possible replacement to standard fossil-fuel based burners. Functionally equivalent, they provide heating and sanitary hot water. Reversible units have the ability to provide also cooling, which improves competitiveness and adds additional comfort for the user. In a rational world, consumers would base their purchasing decision on a mix of cost and comfort criteria. Thus, they would calculate the total cost of ownership (TCO) over the expected useful life of each alternative and choose their heating system accordingly. In a TCO perspective higher initial investment of a system, can be overcompensated by lower operating cost. Obviously, the outcome of such a calculation depends on the difference in initial investment, on the difference in energy demand and on the difference in energy cost (prices at the time of decision and their expected development trajectories over the useful life). In reality, investors are more often guided by a short term focus on investment cost only, ignoring the TCO perspective. In the past, a TCO perspective revealed a cost advantage for heat pumps due to much lower operating cost, this advantage shrunk significantly as a result of a parallel reduction of fuel prices and an increase in cost for electricity. This leads to a less favourable energy price ratio for heat pumps. To overcome the resulting negative impact to sales developments, manufacturers need to focus more strongly on a reduction cost across the value chain to trigger a lower end consumer price. Learning curve effects are expected to materialize in the (near) future as a result of a steadily increasing heat pump stock. Both cost and efficiency improvements can be expected from dedicated developments on the component level. Compressors may serve as an example: while in the past heat pump manufacturers had to use what was available on the shelves from standard applications, some manufacturers now produce compressor series especially optimized for heat pumps. Heat pumps with a higher integration level of components will allow for an easier, faster installation and limiting the options for installation quality issues. Subsidy schemes and other incentive programs by government and industry stakeholders can in principal also help to overcome a cost disadvantage. They need to be designed with a long term perspective, ideally independent of government budgets. A good example is the UK Renewable Heat Incentive. Unfortunately, the European heat pump market statistics 35

38 European Heat Pump Statistics OUTLOOK 2011 starting point and future of this and other subsidy schemes is more and more uncertain. Many of the existing programs are scaled down or stopped completely. In the majority of countries, heat pumps are sold as a premium product today. A strong increase in sales numbers can thus be expected, once this product enters the mass market. This has been the case in Sweden and Switzerland, both countries with a 30 + year history of continuous market development. These pioneering markets can be followed by others, if investing in a heat pump system is not only environmentally friendly, but also economically sensible. In the consumer perspective, this means lower system prices and low operating cost either via low prices for electricity (possibly as part of favourable tariffs within smart grids), via much more improved system efficiency or both. The relation in price levels can be illustrated via energy prices. Table 5-1 shows the cost per kwth of thermal energy for different energy sources. In countries where electric utilities are supporting the use of heat pumps by offering special heat pump tariffs, these tariffs have been used for the price of electricity. AT BE CZ FI FR*9 DE IR NL PL SE*9 Electricity* 12, , , ,8 heat pumps (SFP=3,5) 3,69 5,14 3,43 3,13 4,57 4,61 4,86 3,43 3,94 Heating oil 9,53 6,90 11,00 5,77 7,00 7,18 8,50 10,50 Gas 6,22 5,30 7,81 6,00 5,00 8,10 4,80 Pellets (bulk delivery) 4,90 5,30 4,00 4,51 3,40 5,00 5,50 Pellets (sack delivery) 5,40 5,20 6,50 6,00 6,71 3,80 5,00 6,30 District heating 8,81 7,20 6,51 8,00 9,00 7,00 8,10 Table 5-1: Energy prices for selected countries 2010 (average end consumer prices including VAT and distribution 2009; *if heat pump tariff is available, its price is used here) The energy price ratio (calculation based on data from table 5-1) is the ratio between the price of electricity and the price of 1 kwh of useful heating energy delivered by the competing technologies. It is based on the use cost of energy (excluding annual fees, meter readings etc) and includes efficiency losses of the fossil fuel boiler. The energy price ratio visualizes the operating cost of heating systems using different types of fuel vs. the cost of electricity: a heat pump system has a comparative advantage over competing technologies whenever the seasonal performance factor (SPF) in the location of application is higher than the energy price ratio. In general, the larger the difference between SPF and energy price ratio, the bigger the advantage in terms of operating cost. A primary energy ratio of 2 indicates, that a heat pump with an SPF of 4 would save 50 % of the operating cost vs. the compared alternative. Figure 5-1 shows energy price ratios for 10 European countries. Efficiency for the performance of oil, pellets and gas burners is assumed to be 85 %, and efficiency for district heating is assumed to be 100 %. As long as the given price ratios are found within the orange boundary, the relevant energy price ratio is below 2,0. This would indicate an area where electric heat pumps are seen as an attractive alternative because their SPF is usually (much) higher than 2,0 and thus their operating cost are lower than those of the compared heating solution. In 2009 and 2010 the price ratio of electricity vs. gas, oil and pellets deteriorated resulting in higher relative operating cost for heat pumps. Experts believed this to be a temporary phenomenon. As this situation prevails for nearly two years now it becomes even more important to focus on more competitive investment cost for heat pump systems. Lastly it should be noted that the energy price ratio provides a reliable guidance but due to the volatility of energy prices, this guidance must be interpreted with care. THE BUILDING MARKET The sale of heat generators in general is heavily influenced by construction activity. The buildings sector has seen several years of decline, a trend that was further supported by the impact of the economic crisis. In consequence sales of heat generators have declined, too. While heat pumps were less affected by this development in the past - due to favourable energy price ratios and a general 36 European heat pump market statistics

39 HP oil 3,50 poor market potential 3,00 2,50 2,00 1,50 1,00 HP pellets 0,50 0 good market potential HP gas Austria Belgium Czech Republic Finland France Germany Ireland Netherlands Poland Sweden HP DH Figure 5-1: Energy price ratios trend towards the use of renewable energy sources in buildings the year 2010 was the second year in a row that was different. An even weaker building sector, an exceptionally low price level for oil and gas and a low incentive to invest in new construction and renovation harmed the marked considerably in many countries is deemed to show a silver liner on the horizon. POLICY FRAMEWORK A direct link between official recognition of heat pumps and financial subsidies on the one hand and market success on the other exists. The package of Directives and Regulations (see chapter 3) targeting the use of renewable energy, the reduction of emissions and the increase of buildings and products energy efficiency is currently in the process of finalization and/or transposition into Member States legislation. It does not only recognize heat pumps but makes them a tool to achieve the defined targets. Faster market development is helpful to achieving or even overachieving these targets could ease the efforts necessary in the Member States. While heat pumps are acknowledged, Member States ambition on using them to achieve the energy and climate targets is still low. Thus its contribution potential is largely unused. The example of the National Renewable Energy Action plans (NREAPs), developed by the Member States to outline their development paths towards reaching the 2020 target, illustrates this. The NREAPs are part of the system of checks and balances established between the Commission and the Members States to appropriately monitor the implementation of the RES Directive. Figure 5-2 shows the relative contribution of transport, electricity, heating/cooling and heat pumps (orange) to the national targets. While the share of heat pumps is low with only the UK and Italy giving it a more important role most Member States favor biomass to provide renewable heating/cooling and electricity. Even the expectations for renewable transport fuels are higher than those set for heat pumps. Governments have not yet realized their full potential as a cost efficient solution for the use of RES, let alone for improving the energy efficiency in the heating sector. In case the technologies deemed to contribute to the 2020 targets fail to materialize to the full extent planned (achievements along the target trajectories will be reviewed bi-annually, starting in 2011), this may serve beneficial to heat pumps. The technology is available and reliable making it an ideal tool for governments seeking a quick fix. Using heat pumps may be particularly tempting, as they are one of the most efficient technologies when considering total cost of ownership. As consumers are still rather orientated towards short term gains and the heat pump technology is still new to many markets, government support will help to speed up market development and to unearth the technology s contribution European heat pump market statistics 37

40 European Heat Pump Statistics OUTLOOK 2011 Figure 5-2: Recognition of heat pump technology in the Renewable Energy Action Plans (NREAP) of selected Member States of the European Union. [3] 100% 90% 80% RES-T in total RES-E in total 70% RES-HC rest HP in RES-HC 60% 50% 40% 30% 20% 10% 0% AT BE BU CY CZ DE DK EE EL ES FI FR HU IE IT LT LU LV MT NL PL PT RO SE SI SK UK potential. It will require institutional and financial support over a prolonged period of time. This is of particular importance for those countries, which face difficulties in meeting the binding targets for the use of renewables by In an economic perspective, the early investment in and the support of heat pump technology is one of the cheapest ways of achieving these targets. Besides, every Euro spent on subsidies encourages extra investment and paves the way towards a sustainable energy future. While several options to achieve this exist (grants, preferred interest, tax incentives, feed-in tariffs for heat e.g. the UK Renewable Heat Incentive), key success factor for any support is a long-term, transparent, technology neutral, budget independent approach that supports quality installations. This should be kept in mind by governments willing to develop the heat pump market. A MARKET IN TRANSITION In summary, the future for heat pumps is still positive! However the current situation is characterized by transition with many of the foreseen benefits not yet unfolding:, on a government level, in particular on the EU level, the precautions for a sustainable, efficient and affordable future energy supply were taken in the form of the energy savings and climate package and subsequent legislation. Their implementation is currently underway both on the European, but even more so on the Member State level. This process will take some additional time 2 to 5 years to be fully completed., on the industry level, stakeholders are aware of government action and requirements, but are still missing the market draw for the related products. In particular some big players in the heating industry are waiting for the change to surface in demand structures. Until then, they continue to provide and to support fossil fuel technologies., on the individual level, stakeholders understand the requirements of governments, but sometimes feel that they can do little by themselves. A statement often heard reflects this: heat pumps are good for the environment, but they must also make economic sense : market studies show that the consumer group that makes purchasing decisions because the product is good for the environment is very limited (max. 10 %). If builders/owners decide for technologies that help governments to reach their national and EU targets, than they should be rewarded for this activity. As long as the individual is the only one that bears the extra initial cost for sustainable technologies, he often makes the wrong decision. Here, governments should be the ones strongly interfering to change the speed and direction of market developments. Industry should contribute by focus an future cost reductions. In conjunction they can bring heat pumps to the mass-market. 38 European heat pump market statistics

41 5.2 EU country overview: EU-20 Over the past five years, the number of countries covered in the EHPA reports has increased constantly. Today, 20 European countries are covered. To maintain a balance between the trend derived from longitudinal data and the broader market overview based on today s numbers, the 9 countries covered in previous reports (data available since 2005, see Annex I for details) plus the Czech Republic, Estonia, the Netherlands and Portugal will be illustrated separately in selected graphs. After the severe decline in 2009, sales were stabilized and only slightly decreased in Heat pump sales are still strongly affected by, the low price level for oil, gas and coal,, uncertainty caused by the general economic development (and the continuous reporting about it), and, the ongoing weakness in the construction sector. In 2010, units where sold across Europe. This number includes sales for Poland, Portugal and Spain. These countries enhance the representative footprint of the EHPA outlook. Spain and Portugal add another large Mediterranean market and Spain completes the Outlook with regard to the number of larger European markets covered. A closer look at the Polish heat pump market (assumed to be one of the strong future growth markets) will be useful in assessing the peculiarities of Eastern European markets. The EU-market fell by 3 % for EU-13 and 2,28 % for EU-18 over 2009 data. This is widely seen as the bottom of the downward trend that started in Depending on the number of countries included, sales reached between (EU-13) and (EU-20) units (see figure 5-3). The accumulated number of heat pumps sold from including 20 countries from 2010 onwards has now reached units. A detailed overview of sales data can be found in Table 5-2 and Annex III. The ranking in absolute numbers was led by Sweden, followed by Italy and France, all of them exceeding annual sales of units. Runners up are Norway and for the first time Spain. Finland and Germany complete the seven markets with more than units sold (see figure 5-4). For the future, much stronger contribution to both the overall market and its relative growth is expected from the new entrants, namely the UK, Belgium and Poland. Strongest growth was seen in small (Belgium +111 %) and smallest (Czech Republic +78%, Portugal +61%, Slovakia, +54%) markets, followed by Ireland (+43%), Hungary (+20%), the UK (+12%) and Sweden (+9%) (see figure 5-5). It is remarkable to see Sweden grow continously. With sales largely exceeding the new construction rate, this market is the first, together with Switzerland, that is seeing a switch towards the use of heat pumps in renovation. In absolute numbers only, sales in Italy and Sweden were increasing by more than units EU-13 EU-18 EU Figure 5-3: European heat pump market development in 10/18 and 20 countries from 2005 to Total accumulated sales: units (* Includes sales of reversible air/air heat pumps). European heat pump market statistics 39

42 European Heat Pump Statistics OUTLOOK 2011 Accumulated sales figures AT BE CH CZ DE EE* ES* FI* FR* Heating only Hydronic distribution system air / water water / water brine / water direct expansion / water others Exhaust air air / air air/air with heating function VRF (80%) air / water brine-water / water others Heating and cooling (reversible) Sanitary hot water (SHW) District heating Industrial heat pumps Thermally driven heat pumps Total Total Change ,09 % 111,29 % -4,73 % 77,97 % -11,22 % 2,46 % -11,61 % -27,97 % Change 09 10, absolute numbers Table 5-2: Heat pump sales in EU-20 countries (numbers in brown color listed for information only, data from countries marked with an asterisk (*) includes reversible air/air heat pumps). It can be observed, that markets with a long heat pump history and higher market shares (AT, CH, SE) seem to be less affected by more difficult economic conditions than those followers that saw strong growth (connected to many new players and a focus on air/water units) over the past years (DE, FR). On the other hand, a quick rebound is observed in countries with a significant share of air/water or air/air units that also provide heating. The easy installation and the comparatively low price combined with today s improved efficiency contribute to an increasing market share of air source heat pumps. The combination of adding Poland and Spain to the Outlook and of including a share of air-air units to the statistics results in an additional number of heat pumps. Sales growth in this category overcompensated the rather weak performance of ground-source and traditional air/water units and led to an overall increase of numbers reported for the EU market. Analysing the market for changes in the energy source predominantly chosen, it becomes obvious that the air-source segment, including reversible heat pumps and exhaust air heat pumps is still the largest, but was also affected the most (see figure 5-6). Figure 5-4: European 2010 heat pump market in 20 countries by country (* Includes sales of reversible air/air heat pumps). SE* IT* FR* NO* ES* FI* DE CH PT* UK AT EE* PL BE NL CZ IE HU SK LT* European heat pump market statistics

43 HU IE IT* LT* NL NO* PL PT* SE* SK UK sum EU ,65 % 42,84 % 15,31 % -6,68 % -15,05 % 0,00 % 60,75 % 9,13 % 53,57 % 12,31 % The EU-20 market is dominated by air/air (with heating functionality) and air/water units followed by a solid base of geothermal units used for heating. The latter segment remained largely stable compared to Figure 5-7 illustrates this trend and shows the difference between heat pump based systems using air (light blue) and water (darker blue) as heat distribution system. For the future, sales numbers for ground-coupled heat pumps are expected to stay stable, however due to an overall increase in the marked driven by the employment of aerothermal solutions, their share will decline even further. Figure 5-8 shows the share of the units using air and ground (including hydrothermal = water sources) by country. It supports the trend towards air as energy source, but shows also regional differences. Figure 5-9 presents a split by country and product category: where in warm climates reversible air/air units are used, colder climates demand a more stable source temperature and lead to a larger share of ground coupled units. This is true, unless we talk about Scandinavia where cheap electricity and a huge replacement market for direct electric heating has led to an inroad of comparatively price worthy air/air units. 120% 111% 100% 80% 60% 40% 20% 0% -20% -40% 78% 61% 54% 43% 20% 15% 9% 12% 0% 0% 0% 2% FR* NL FI* DE LT* CH AT ES* NO* PL EE* SE* UK IT* HU IE SK PT* CZ BE -12% -11% -7% -5% -3% -15% -28% Figure 5-5: Annual change of heat pump sales, (EU-20); (* Includes sales of reversible air/air heat pumps). European legislation affecting heat pumps 41

44 European Heat Pump Statistics OUTLOOK 2011 Figure 5-6: Development of sales by product category, 2010 (EU-20). H-air/water H-ground/water Exhaust air Reversible air/air Reversible other Sanitary hot water Industrial application Reversible other 9% Sanitary hot water 3% Reversible air/air 51% H-air/water 19% Exhaust air 4% H-ground/water 14% air-air air (excl. air-air; 2009/10) ground coupled Figure 5-7: Development of sales by energy source, (EU-20) With regard to the categories covered, air as an energy carrier dominates the system choice in most countries. Looking at the distribution side, hydronic systems (radiators, floor heating, wall heating) are often favoured for their comfort in central Europe. Due to the change in calculation base from 2009 to 2010, the increase in air/air reversible units is largely due to the inclusion of additional countries and can not (yet) be seen as a change in market share. It is increasingly obvious that the market share of special solutions like water/water or direct expansion units is declining (this is true both in absolute and in relative terms). This may indicate, that a growing market favours standard solutions. Sanitary hot water (SHW) heat pumps are an old acquaintance having been very popular in the 1980s. Back then, they were seen as an entry level heat pump to be combined with existing boiler technology. They are experiencing a revival today and are (again) mostly used in the renovation segment where they complement existing boilers. In 2010 they have seen considerable growth. One reason for this popularity is the fact that their combination with a fossil fuel boiler is in many countries sufficient to fulfill the requirements of the RES Directive or other national building regulation (implementation of EPBD, i.e. RT 2012 in France). Sanitary hot water heaters are mainly sold in France, Germany and Austria. In addition, the use of a heat pump for hot water production includes renewables in the heating system and at the same time leaves the roof untouched allowing 42 European heat pump market statistics

45 100% 90% 80% Share Air-Source Share Ground-Source 70% 60% 50% 40% 30% 20% 10% 0% AT BE CH CZ DE EE* ES* FI* FR* HU IE IT* LT* NL NO* PL PT* SE* SK UK Figure 5-8: Share of energy used per country, Reversible air-air Reversible w/out air-air Sanitary hot water HP (SHW) Exhaust air HP Air/water Ground/water AT BE CH CZ DE EE* ES* FI* FR* HU IE IT* LT* NL NO* PL PT* SE* SK UK Figure 5-9: Sales by category in 2010 (EU-20); (* Includes sales of reversible air/air heat pumps) Figure 5-10: Development of sanitary hot water heat pump sales (EU-20). Total: units. European heat pump market statistics 43

46 European Heat Pump Statistics OUTLOOK 2011 the often profitable installation of photovoltaic panels. The combination of PV electricity and (at least) a sanitary hot water heat pump in the basement ensures nearly emission free sanitary hot water all year round. In countries, where a requirement on the maximum energy demand of the building must be met, this can be done by improving the building envelope or by improving the technology installed (or both). Sanitary hot water heat pumps sometimes provide an opportunity to save in refurbishment cost. In combination, demand for sanitary hot water heat pumps is increasing and sales numbers, too (see figure 5-10). Just recently, the EN was published to allow for a standard measurement of efficiency of this type of heat pumps. On a legislation level (see chapter 3) minimum efficiency requirements are developed under ErP, Lot 2 and efficiency will be displayed with an energy label in the future. Most sanitary hot water heat pumps use indoor or outdoor air as an energy source. 5.3 Market penetration Sources [1] Nowak, T. (2011): Heat pumps in Europe a smart future? Welcome address to the 10th IEA heat pump conference, , [2] see for a list of products whose quality is third party certified. [3] Part of the reason for declining markets is a lack of quality caused by many new entrants to the market, that hoped to benefit from short term gains and fast growth, but are not equipped to deliver quality and provide sufficient service. These are the first to disappear again, when times get rough and sales drop. The past two years with their considerable decline in sales numbers (yet on a rather high overall level) are considered helpful for future growth as they purge the markets and stress the importance of dedicated manufacturers with quality products [2] and knowledgeable installers with the economic foundations to provide installation quality and service also in economically demanding times. Most industry experts strongly believe that the regulatory framework for heat pumps is beneficial to future growth, leading to the expectation, that the majority of units is yet to be sold. Better training and certification is key to efficient systems with a positive environmental impact. The need for certification programs for small scale RES installers (incl. heat pump installers) is foreseen by the RES Directive and currently implemented by the Member States. The EHPA has acknowledged this requirement and operates the most developed training and certification program (EUCERT) since 2007 and by participating in the Qualicert project. [3] While the technology s achievements can be shown analysing the number of units sold in a market, its potential is more visible when looking at market penetration. In figure 5-11 the number of heat pumps sold is presented as a function of households. Not surprising, the Scandinavian countries are still outstanding. The low penetration for all other countries indicates that all markets in Europe have a large growth potential HP per households o s HP (05-10) per households s Figure 5-11: Heat pump sales per households 2010 (dark blue) and per households based on accumulated sales (light blue) ,91 1,91 0,49 0,17 0,67 0,15 0,15 0,42 2,41 3,82 0,39 0,50 0,61 0,03 0,10 0,04 0,10 0,06 3,19 0,05 0,07 AT BE CH CZ DE EE* ES* FI* FR* HU IE IT* LT* NL NO* PL PT* SE* SK UK 44 European heat pump market statistics

47 5.4 Market segmentation Heat pumps are an increasingly important sub-market in the much larger but stagnating market for Heating, Ventilation and Air Conditioning (HVAC). This market can be distinguished into the segment of new buildings and that of renovation. In turn, both segments can be split into residential and non-residential building classes (see table 5-3). All segments are characterised by differences in development status and potential: 1. The sub-segment for new residential one/two family houses is best developed. Markets like Sweden and Switzerland show a market penetration of 95 % and 80 % respectively. In developing markets like Austria, Finland, France, Germany or Norway, heat pumps have reached a share greater than 25 % (compared to the total sale of heating sytems). 2. The sub-segment for renovation of one/two family houses is currently gaining importance and is perceived as the most promising in the long run. Heat pumps have reached a share greater 10 % compared to all heat generators sold in several EU markets, namely Switzerland and Sweden, and notable market shares (but smaller 10 %) in Austria, France, and Germany. An increasing number of heat pumps is now designed to provide up to 65 C to enable an easy replacement with existing boilers. However if the user requires higher performance, the use of heat pumps in this segment still requires extra investments in new windows, heat distribution system or insulation. 3. The sub-segment for residential multi-family buildings is only slowly developing. Approx. 10 % of all heat pumps sold have a capacity of more than 20 kw thermal output, thus being suitable for this segment. 4. The sub-segment for non-residential buildings is characterized by individual projects and is gaining in importance. As large buildings often have a demand for heating and cooling alike, heat pump systems are increasingly used in an optimized comfort design approach providing both functions. Thus heat pumps help to reduce investment cost, as one system provides two functions, a fact that is increasingly recognized and asked for by investors sensitive to low total operating costs. New building Renovation Residential: Mass market Increasingly recognized market single/double currently developing (France, Germany, Sweden, family house Switzerland), importance of sanitary hot water units increasing Residential: Small; market developing Initial steps are made Multi-family residency Non-residential Minority share in currently sold Increasingly important (commercial) heat pumps. Several demonstration with owners that value projects available, potential for low operating cost. Special heating and cooling projects application in sewage systems, by far not exploited. subways and tunnels. Table 5-3: Market segments for smaller units. Within each sub-segment, heat pumps compete directly with established technologies. Depending on the required functionality (heating, cooling, sanitary hot water) competitors are gas and coal fired burners, direct electric heaters, or biomass burners. Solar thermal collectors are increasingly integrated into heat pump systems. In markets requiring cooling functionality heat pumps do also compete with electric air-conditioning and cooling devices. In these markets a clear distinction between heat pumps used for heating and air-conditioning devices that also use heat pump technology, but are optimized for cooling, is less and less appropriate, as reversible air-air units (and other heat pump types) are optimized for a broader temperature range to efficiently provide both functionalities. Exhaust air/heat recovery heat pumps complement the heat sources used by providing an efficient way of heat recovery to reduce energy losses in building ventilation system thus increasing overall energy efficiency. European heat pump market statistics 45

48 European Heat Pump Statistics OUTLOOK 2011 Figure 5-12: Heat pump sales by capacity class 2010 (* Includes sales of reversible air/air heat pumps). 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% units >20kW units < 20kW AT BE CH CZ DE EE* ES* FI* FR* HU IE IT* LT* NL NO* PL PT* SE* SK UK The general development trend for most countries is based on an early adoption of heat pumps in the segment for new residential one family buildings followed by the segment for renovation. Part of the reason for this development comes from the fact, that it is easier to convince individual investors of the benefits of heat pumps than to convince project developers. This is however changing due to increasing sensitivity for affordable heating and cooling, both in the private owner and the (public) investor perspective. Especially in the Netherlands, there are several examples of large building companies and ESCO's using heat pumps as part of their heating strategy. As well, it is easier (and often cheaper) to integrate heat pump technology into the planning of a new house than to make the necessary adjustments to an existing building. A rough assignment of sales numbers to the above mentioned classes can be achieved by an evaluation of sales by installed capacity, EHPA statistics distinguishes two capacity classes: above and below 20 kwth. The majority of markets still show a strong dominance in smaller heat pumps. A larger share of 20 kwth heat pumps indicates the use of heat pumps in industrial applications or larger (residential) buildings. It is expected, that a shift towards larger heat pumps is an indicator for a developing market. Figure 5-12 shows data for 13 countries. In addition, experience from different countries shows that on average approx. 80 to 85% of all heat pumps are used in new buildings and 15 to 20% in the renovation segment. 5.5 A positive energy balance: efficiency and energy savings Heat pumps replace primary non-renewable sources by ambient energy. Their use leads to considerable savings of CO2 emissions. Actual savings is calculated by comparing the emissions from a heat pump to those of a (replaced) gas condensing boiler. For the heat pump, different efficiency assumptions are taken by category, gas boiler efficiency is set at 85 % (upper heating value). As a result, the total amount of heat pumps installed in 2010 saves on average more than 75 % in final energy and nearly 40 % in primary energy. For the transformation, a primary energy factor (kwhth/kwhel) of 2,5 (eta = 0,4) is used. The latest available factor applies to the EU power mix in It was calculated by Eurostat approx. 2,3 (eta = 0,438). EHPA recommends to use the official Eurostat value in the future and to foresee regular re-calculation. Using this factor, the primary energy savings from the number of heat pumps installed in 2010 increases to nearly 45 %. In absolute numbers, 6,8 TWh of final and 3,2 TWh of primary energy were saved. For all heat pumps installed between 2005 and 2010, the numbers are 36,6 TWh of final and 15,5 TWh of primary energy. 46 European heat pump market statistics

49 2,00 1,80 1,60 Final energy savings (in TWh) Primary ry energy savings (in TWh) 1,40 1,20 1,00 0,80 0,60 0,40 0,20 0,00 AT BE CH CZ DE EE* ES* FI* FR* HU IE IT* LT* NL NO* PL PT* SE* SK UK Figure 5-13: Final and primary energy savings from heat pumps (2010, in TWh); EU-20 (* Includes sales of reversible air/air heat pumps). 5.6 Renewable energy provided by heat pumps The methods and procedures for calculating the RES share of the energy used for heating and hot water production are still under development. Thus, the calculations presented here give a first indication, but final results can deviate. The calculations results will become part of the national energy statistics and the different national renewable energy action plans. EHPA is using the same method like in the previous reports (2009 and 2010) with some adjustments based on a Commission s position paper. In parallel to an extended report, the calculation is now applied to all 20 countries. The calculation represents 2010 installations and assumes a general installed capacity for residential installations. This is a cautious approach taking into consideration that approx. 10 % of all installed units have a capacity larger 20 kw and both industrial and commercial applications usually have much larger capacity and often a better efficiency. As a result, the calculated contribution is at the lower margin of the possible development trajectory. The previously used distinction by Members States has been dropped due to the fact that their impact is rather small and that in the future installed capacity will be recorded for all markets. For simplicity of calculation it has been replaced by a general assumption based on climate zones. This is given for the installed capacity (Table 5-4), average operating hours Qusablefactor (Table 5-5) and SPF values (Table 5-6). A special precaution has been taken for exhaust air heat pumps and for reversible air/air heat pumps installed in France, Portugal, Spain and Italy. Installed cap. Warm Average* Cold Air/water Water/water Brine/water Dir. expansion/water or dir. condensation Exhaust air HP Currently not counted Sanitary hot water Reversible HP Calculation is based on the following assumptions: (1) Calculation formula: ERES = Q usable * (1 1/SPF). (2) SPF > 1.15 * 1/eta with eta (2007) of 0,438 for the efficiency of electricity conversion in the EU in This is the most recent Eurostat value and results in a minimum SPF of 2,62. (3) Q usable = Installed capacity (kw) x Q usablefactor (hrs). (4) Assumed capacity as listed in table table 5-4. (5) assumed full load hours (Q usablefactor ) as listed in table 5-5. (6) assumed SPF values as listed in table 5-6. Table 5-4: Installed capacity per buildings for different types of heat pumps, distinguished by climate zone. European heat pump market statistics 47

50 European Heat Pump Statistics OUTLOOK 2011 Table 5-5: Q usablefactor (hours) for different types of heat pumps, distinguished by climate zone. Table 5-6: SPF assumptions for Europe, distinguished by climate zone. Qusablefactor Cold Average Warm Air/water Water/water Brine/water Dir. expansion/water or dir. condensation Exhaust air HP Sanitary hot water (SHW) Reversible HP SPF values Cold Average Warm Air/water 3,00 3,00 3,00 Water/water 3,50 3,50 3,50 Brine/water 3,70 3,70 3,70 Dir. expansion/water or dir. condensation 3,70 3,70 3,70 Exhaust air HP 3,00 3,00 3,00 Sanitary hot water (SHW) 3,00 3,00 3,00 Reversible HP 3,00 3,00 3,00 EXHAUST AIR HEAT PUMPS Exhaust-air heat pumps use aerothermal energy. Part of the energy used comes from a re-use (via heat exchangers) of indoor air, part of it comes from outdoor air that is drawn into the building. Initial analysis shows that 30 % to 50 % of the energy used comes from outdoor air. In order to provide (yet again) a cautious estimate, EHPA suggests to count 30 % of the energy provided by exhaust air as renewable. As long as there is no official statement by the EU, this category is not counted towards RES from heat pumps in this statistics. Further elaboration is necessary. Table 5-7: Distribution of heat pumps and contribution to heating in France, Italy, Portugal and Spain. REVERSIBLE AIR/AIR HEAT PUMPS INSTALLED IN WARM CLIMATES As described earlier, a large number of reversible air-air heat pumps is installed in Europe. In Scandinavian and Baltic climates, their use for heating is simply assumed on the basis of the prevailing climate. For France, Italy, Portugal and Spain, a different approach has been taken. It is based on a study done for the Italian market to determine the type of heating systems used. This study has revealed that in 9,5 % of the cases, heat pumps were the only installed heat generator. This figure has been applied to the number of reversible heat pumps sold. Additional information from the sales statistics show that roughly 50 % of all heat pumps are sold in Southern Italy and 50 % in the Northern part. Based on field data it is assumed that in Northern Italy, 50 % of the energy provided by a heat pump is used for heating and 50 % for cooling. In Southern Italy, an 90 % (cooling)/10 % (heating) is assumed. Northern Southern Central/ Southern Spain, Italy, Southern Italy Northern Spain, Southern Portugal France Northern Portugal Costal areas Heat pumps 9,5 % 9,5 % 9,5 % 9,5 % as only heat generator Share of installed units* 50 % 50 % 50 % 50 % Energy used for heating 50 % 10 % 50 % 10 % * (based on sales per country) The values presented in table 5-7 are applied to the calculations for RES and GHG emissions savings for France, Italy, Portugal and Spain. Reversible heat pumps connected to hydronic systems are always counted. VRF systems are counted, as they are specifically designed for heating and cooling. 80 % of the declared sales numbers are included in the EHPA statistics to allow for deviations from declared use. For RES contribution and GHG savings, they are weighted with a factor of 50% assumed to be the share of energy provided for heating. 48 European heat pump market statistics

51 1,60 1,40 1,20 1,00 Reversible air-air Reversible w/out air-air Sanitary hot water HP (SHW) Exhaust air HP Air-water r GSHP 0,80 0,60 0,40 0,20 0,00 AT BE CH CZ DE EE* ES* FI* FR* HU IE IT* LT* NL NO* PL PT* SE* SK UK Figure 5-14: Renewable contribution from heat pumps, by energy source (2010, in TWh); EU-20 (* Includes sales of reversible air/air heat pumps). Figure 5-14 shows based on the presented assumptions all heat pumps installed in 2010 (for the EU-20 area) provide a total of 5,47 TWh of renewable thermal energy. In terms of accumulated data, a total of 3,77 mio. heat pumps installed in 20 European countries from 2005 to 2010 contribute 29,14 TWh of renewable energy to the overall final energy demand for heating (table 5-8). Figure 5-14 also shows that the major part of the contribution results from units using air as heat source. This is still true, when only analysing those heat pumps that were designed for heating. However the contribution from GSHP is as stable as its sales data. Table 5-8: Renewable energy provided by heat pumps installed in 2010 and cumulated value for all units installed from (in TWh). AT BE CH CZ DE EE* ES* FI* FR* HU IE IT* LT* NL NO* PL PT* SE* SK UK Total RES ,17 0,09 0,27 0,09 0,68 0,09 0,07 0,55 0,79 0,01 0,02 0,13 0,01 0,08 0,65 0,08 0,02 1,46 0,01 0,20 5,47 RES ,91 0,12 1,45 0,26 3,68 0,34 0,07 2,93 6,01 0,01 0,03 0,70 0,02 0,36 3,20 0,08 0,08 8,11 0,02 0,56 29, Greenhouse gas emission savings by heat pumps Heat pumps replace primary non-renewable sources by ambient energy. Even on a primary energy basis, their use leads to considerable savings of CO2 emissions. Actual savings is calculated by comparing the emissions from a heat pump to those of a (replaced) gas condensing boiler. Parameters used are: eta for gas: 85 %, emission value for gas: 242g/kWhth and emission value for electricity: 400 g/kwh, a value that represents the EU-25 average for 2010 (Source: Gemis 4.6). For heat pump seasonal efficiency, the values from table 5-6 were used. The results must be considered (again) a cautious estimate, as in reality, not only gas but also oil boilers and coal ovens are replaced. All of them have higher emissions than a gas boiler and thus the calculation results presented here are lower than to be expected in reality. The replacement speed of oil boilers is most likely higher than that of gas boilers, as the cost advantage of heat pumps is higher, when oil boilers are replaced. The total contribution from all heat pumps installed in the EU-20 region has reached 1,27 Mt in 2010 (see table 5-9 and figure 5-15). All heat pumps installed from contribute 6,8 Mt. In summary, table 5-10 shows the savings achieved by all heat pumps sold from The table illustrates the contribution to the different EU targets. As this time period is much shorter than the expected average life time of a heat pump, no corrections for heat pump replacement were made. Table 5-9: Greenhouse gas emission savings by heat pumps installed in 2010 and cumulated value for all units installed from (in Mt). AT BE CH CZ DE EE* ES* FI* FR* HU IE IT* LT* NL NO* PL PT* SE* SK UK Total ,04 0,02 0,06 0,02 0,16 0,02 0,02 0,13 0,18 0,00 0,00 0,03 0,00 0,02 0,15 0,02 0,00 0,34 0,00 0,05 1, ,22 0,03 0,34 0,06 0,91 0,08 0,02 0,68 1,38 0,00 0,01 0,16 0,01 0,08 0,73 0,02 0,02 1,91 0,00 0,13 6,79 European heat pump market statistics 49

52 European Heat Pump Statistics OUTLOOK 2011 Figure 5-15: Greenhouse gas emissions savings (2010, in Mt); EU-20 (* Includes sales of reversible air/air heat pumps). 0,40 0,35 0,30 0,25 0,20 0,15 0,10 0,05 0,00 Reversible air-air Reversible w/out air-air Sanitary ary hot water HP (SHW) Exhaust air HP Air-water GSHP AT BE CH CZ DE EE* ES* FI* FR* HU IE IT* LT* NL NO* PL PT* SE* SK UK Table 5-10: Consolidated contribution of heat pumps to RES use, primary and final energy savings as well as GHG emissions reduction Sales numbers presented here deviate slightly from the gross total due to a category mismatch in some country data sets. Accumulated values RES integration (TWh) 23,67 5,47 109,93 139,06 GHG emission savings (Mt) 5,52 1,27 25,48 32,27 Final energy saved (TWh) 29,71 6,87 138,09 174,67 Primary energy saved (TWh) 12,30 3,17 63,58 79,05 Number of units sold (#) Table 5-10 also shows a simple forecast of the current trends in heat pump sales. Using an 11 % average growth rate, the contribution potential for the time from 2011 to 2020 is determined. The total amount of RES is then very close to the amount planned for in the Member States National Renewable Energy Action Plans (141 TWh). The total number of units sold shown in this graph is slightly lower than the number of heat pumps sold due to corrections made for units that could not be included in the impact calculation on RES, GHG and energy savings. 5.8 Outlook for 2011 The heat pump industry looks slightly optimistic for The first two quarters have shown an increase in demand with the majority of players being able to record a plus over 2010 figures. For the full year an increase of roughly 10 % is expected (see figure 5-16) sum EU-13 sum EU-18 sum EU Figure 5-16: Sales outlook * 1* 50 European heat pump market statistics

53 6 Chapter FOCUS REPORTS ON SELECTED EUROPEAN MARKETS 300 km 6 provides an in-depth coverage of selected markets in Europe. The individual country reports aim at giving the reader 300 mi information on the framework conditions of the heating market in each country in general and on the develop ments in the market segment for heat pumps in particular. The focus reports have been provided by the national editors. 51

54 European Heat Pump Statistics OUTLOOK AUSTRIA Population [1] Area km 2 GDP/capita [2] Capital Vienna Number of single/two-family houses/ multi-dwelling buildings [3] Number of dwellings in multi-dwelling buildings [4] Number of non-residential buildings [5] New construction of single/two family houses 5 dwellings / inhabitants in 2002 Average heat demand single/two family house MWh/year Share of RES in final consumption of energy 2009 [6] 30,1 % Binding target for the use of renewable sources by % National emission factor (CO 2 /kwh electricity) [7] 195,16 g Table 6.1-1: Electricity mix for Austria [8] Gross electricity generation Fuel TWh Share TWh Share Gas 12,58 18,8 % 13,61 19,7 % Petroleum products 1,24 1,9 % 1,14 1,7 % Solid fuels 5,52 8,3 % 3,76 5,5 % Nuclear 0,00-0,00 - Renewables 44,24 66,2 % 46,60 67,5 % Other 3,29 4,9 % 3,88 5,6 % Total 66, % 68, % Table 6.1-2: Energy prices in Austria. Energy prices Average end consumer prices including distribution and taxes: Electricity (July 2010) [9] Electricity for heating purposes (Jan 2011) [10] Heating oil (April 2011) [11] Domestic gas (July 2010) [12] Pellets (sack delivery) (April 2011) [13] Pellets (bulk delivery) (April 2011) [14] District heating (2nd qu. 2011) [15] 0,01956 Euro/kWh 0,01292 Euro/kWh 0,0953 Euro/kWh 0,0622 Euro/kWh 0,054 Euro/kWh 0,049 Euro/kWh 0,0881 Euro/kWh Market trends In Austria the strong growth of the heat pump sector, which had commenced its recent run in 2000, came to an end in 2009 and continued to decline in Last year units were sold in the domestic market (Heat pumps for space heating: units and sanitary hot water heat pumps: units). It marked a decline of 3,1 % compared with 2009, where units were sold. The following figure shows the growth in heat pumps for water and for space heating from 1975 to 2010: 52 Focus reports on selected European markets Austria

55 Space heating Water heating Figure 6.1-1: Austrian heat pump market development The historic development is characterised by the change from sanitary hot water heat pumps to heat pumps for heating. The background for this development can be explained by the ongoing enhancement and improvement of the technology, the suitability of heat pumps when installed in energy-efficient buildings because of its low heating demand and flow temperature, and the effective energy policy instruments. Heat pumps for space heating are divided into three performance classes. During 2010 the class up to 20 kw (used in private buildings) showed a very small downward trend of 0,6 %, heat pumps from 20 80kW and above 80 kw exhibited downward trends of 12,2 % and 28,2 % respectively. Sanitary hot water heat pumps decreased by 5,8 %. Heat pump type /2010 evolution Air/water ,7 % Water/water ,3 % Brine/water ,4 % Direct expansion/water ,0 % Exhaust air/air ,9 % Sanitary hot water ,8 % Total ,1 % Table 6.1-3: Sales of heat pumps in Austria The domestic market segmentation by energy source is shown in the following figure: ,8% 32,3% 31,3% 2,6% 3,2% 3,2% 22,9% 24,8% 28,4% 8% 6,3% 6,6% 6,4% 5,2% 4,5% 30,4% 28% 26,2% Sanitary hot water Exhaust air/air Air/water Water/water Direct expansion/water Brine/water Figure 6.1-2: Austrian heat pump market, , by type of heat pump. Focus reports on selected European markets Austria 53

56 European Heat Pump Statistics OUTLOOK Figure : Heat pumps in operation in Austria. 0 Space heating Water heating Sources [1] Statistik Austria: 1. Quarter [2] 2010 GDP at current prices per inhabitant, Eurostat: [3] Statistik Austria: Gebäudeund Wohnungszählung [4] Statistik Austria: Wohnbau - tätigkeit 2002, Wien [5] Statistik Austria: Gebäudeund Wohnungszählung [6] Ministry for Environment. [7] E-Control, Bericht über die Stromkennzeichnung, [8] EU energy observatory: publications/statistics/ statistics_en.htm. [9] BMWFJ, Strompreismonitor. [10] Energie AG, tarif for heat pumps, average Jan [11] BMWFJ, Treibstoffpreismonitor. [12] BMWFJ, Gaspreismonitor. [13] Verein propellets Austria. [14] Verein propellets Austria. [15] IWO Österreich. Heat pumps are assumed to have a life span of about 20 years. With this in mind it can be estimated that the current installed base in Austria is of the order of units. With a view to export activity from Austrian manufacturers, total exports in 2010 were units. The export ratio was highest in the performance class above 80 kw, and showed its highest increase in the performance class between 20 kw 80 kw at 27,4 % (space heating heat pumps). 54 Focus reports on selected European markets Austria

57 6.2 BELGIUM Key facts Population (2010) Area km 2 GDP/capita [1] Capital Brussels Number of family houses [2] Number of multi-dwelling houses [2] Number of dwellings in multi-dwelling buildings [2] Number of newly-built non-residential buildings in 2010 [2] Total number of non-residential buildings in Belgium [2] Number of new dwellings finished in 2010 [2] Average heat demand single/two family house 21 MWh/year Share of RES in final consumption of energy ,3 % Binding target for the use of renewable sources by % Flemish Region emission factor (CO 2/kWh electricity) 600 g [3] Walloon Region emission factor (CO 2/kWh electricity) 350 g [3] 2008 TWh Share Gas 172,73 26,01 % Oil 278,64 41,96 % Nuclear 136,76 20,59 % Solid fuels 50,75 7,64 % Renewables 25,26 3,80 % Total 664, % Table 6.2-1: Gross Inland Consumption of energy in Belgium [4] Gross electricity generation Fuel TWh Share TWh Share Gas 26,33 31,0 % 30,29 33,2 % Petroleum products 0,41 0,5 % 0,28 0,3 % Solid fuels 5,55 6,5 % 5,17 5,7 % Nuclear 45,57 53,7 % 47,22 51,8 % Renewables 4,42 5,2 % 5,44 6,0 % Other 2,65 3,1 % 2,83 3,1 % Total 84, % 91, % Table 6.2-2: Electricity mix for Belgium [4] Energy prices Average end consumer prices including distribution and taxes during 2010: Electricity 0,18 Euro/kWh Heating oil 0,069 Euro/kWh Gas 0,053 Euro/kWh Pellets (sack delivery) 0,052 Euro/kWh Table 6.2-3: Energy prices in Belgium [5] It should be noted that Belgian consumers have the possibility to obtain reduced electricity prices during off-peak hours. Focus reports on selected European markets Belgium 55

58 European Heat Pump Statistics OUTLOOK 2011 Present market situation Air/air heat pumps, mainly in non-residential buildings, dominate the Belgian market. The use of heat pumps for space heating in new residential buildings (ground coupled and air/water heat pumps) is becoming more and more popular even if the heat pump market share remains low (10 %). The renovation market is emerging as a promising sector, although obtaining subsidies is governed by strict criteria in terms of energy performance, which are set by the authorities. The main barriers which hinder market development for heat pumps in Belgium are the relatively high electricity prices and investment costs on the one hand, and relatively conservative behaviour on behalf of consumers on the other. The high electricity prices limit the potential economic gains for end users, especially in low energy buildings, and as a consequence the market remains very sensitive to changing oil and gas prices. Market trends Table 6.2-4: Sales of heat pumps in Belgium Heat pump type Evolution Air/water ,4 % Water/water ,6 % Brine/water ,7 % Direct expansion/water ,0 % Exhaust air ,9 % Sanitary hot water ,5 % Total ,3 % Sanitary hot water Exhaust air Air/water Water/water Direct expansion/water Brine/water 13,2% ,5% 70% Figure 6.2-1: Belgian heat pump market, , by type of heat pump % 4,5% 11% 11,7% 11,7% Table 6.2-5: Average heat pump unit prices (price for end user, installation costs included, heat distribution excluded). Costs Prices of heat pump units (for an average family house with heat losses around 10 kw): Air/air Air/water Ground source Euro Brand names Ground source heat pumps: Aermec, Climapac, Daikin, Gea-Happel, Masser, Ochsner, Stiebel Eltron, Vaillant, Viessmann, Nibe, Buderus, Heliotherm, Alpha- InnoTec. 56 Focus reports on selected European markets Belgium

59 Air/water heat pumps: Aermec, Airwell, Ajtech, Daikin, Ese, Ess, Gea-Happel, Mitsubishi, Ochsner, Stiebel Eltron, Viessmann, Nibe, Buderus, Heliotherm, Alpha- Innotec, General. Air/air heat pumps: Airwell, Carrier, Climapac, Daikin, Gea-Happel, Mitsubishi, General. Distribution channels The main heat pump manufacturers have their own distribution facilities in Belgium. They generally offer education programs for installers. Some brands are distributed to installers by HVAC systems wholesalers, while in some cases installers propose tailor-made solutions that are configured on site. Industry infrastructure All the key heat pump actors are present in Belgium (heat pump producers, heat pump component manufacturers, distributors, engineering companies, installers, drillers). However, there is no indigenous Belgian heat pump brand. In some cases, collaboration between foreign heat pump producers and Belgian component manufacturers or exclusivity contracts lead to the creation of specific products or integrated services sold under a Belgian brand. Some installers also offer tailormade heat pump systems and solutions. Up until now, there has been no test centre offering standard performance measurement and certification services. Some universities and high schools are involved in research activities and quality procedure settlements. National industry associations The heat pump sector is organised in two regional heat pump platforms (Warmtepomp Platform WPP Flanders, Plateforme Pompes à Chaleur Wallonia). The total number of members is approximately 120 (installers, importers, distributors, drillers, engineering companies). Each platform is integrated into a regional Renewable Energy Association (ODE Flanders, RBF Wallonia). Both plaforms collaborate together at national level. The two platforms have set up national working groups dealing with product quality and education matters. Training and certification Education centres offer specific education programs for heat pump installers and designers. Up until now, there has been no regional or national co-ordination for education programs. This should change during 2011 thanks to the creation of a National Working Group and to the participation of Belgium in EHPA s EUCERT program for the training and certification of heat pump installers. A certification program is under development and should come into force at the end of Incentive schemes Geothermal heat pumps are eligible to be written off against tax (new buildings). Tax reduction on investments for boiler replacement also relates to heat pumps (all types). In all cases, the tax reduction rate is 40 % (maximum Euro 2 770); where the seasonal performance factor reaches a minimum of 3. Heat pumps are also supported by direct or indirect subsidies. In new buildings, the trend is to relate the subsidies to the building energy performance index (in terms of primary energy consumption). In existing buildings, the subsidies are related to the energy performance of the system on the one hand (minimum EcoLabel criteria), and to the insulation level of the building on the other hand. Sources [1] 2010 GDP at current prices per inhabitant, Eurostat: [2] Statbel nl/statistieken/cijfers/ economie/bouw_industrie/ gebouwenpark [3] Evaluatie van de REG-rapporten van de distributienetbeheerders in Vlaanderen voor de jaren (VITO) [4] EU energy observatory for Belgium: energy/observatory/ eu_27_info/eu_27_info_en.htm [5] Renouvelle November 2009: Focus reports on selected European markets Belgium 57

60 European Heat Pump Statistics OUTLOOK Key facts [1] CZECH REPUBLIC Population Area km 2 GDP/capita [2] Capital Prague Number of family houses [3] * Number of multi-dwelling houses [3] * Number of dwellings in multi-dwelling buildings [3] Number of newly-built non-residential buildings in Total number of non-residential buildings not available Number of new dwellings finished in (decrease of 5,3%) Average heat demand single/two family house MWh/year Share of RES in final consumption of energy 2008 [4] 7,2 % Binding target for the use of renewable sources by % National emission factor (CO 2/kWh electricity) g Table 6.3-1: Electricity mix for the Czech Republic [4] Gross electricity generation Fuel TWh Share TWh Share Gas 3,96 4,7 % 3,72 4,5 % Petroleum products 0,13 0,2 % 0,16 0,2 % Solid fuels 48,78 58,4 % 45,96 55,9 % Nuclear 26,55 31,8 % 27,21 33,1 % Renewables 3,73 4,5 % 4,65 5,7 % Other 0,37 0,4 % 0,55 0,7 % Total 83, % 82, % Coal-fired power plants still provide the largest share of energy produced in the Czech Republic with almost 60 % share of production. An additional 33 % of energy comes from two nuclear power plants. The significant percentage of renewable sources comes from hydro electric plants other RES do not make any significant contribution. As solar PV is subsidised, installations have grown in recent times, however this has had some negative influence on the Czech distribution grid. Table 6.3-2: Average end consumer prices including distribution and taxes during Energy prices CZK/kWh Euro/kWh Electricity 2,9 0,112 Heating oil 26,11 1,0042 Gas 1,157 0,0445 Pellets 0,7977 0,0307 District heating n/a n/a Special tariffs for heat pumps exist that reduce the price for electricity to approx. 0,09 Euro/kWh. The price of energy remained more or less the same as last year prices for kwh decreased but monthly standing charges increased. The outlook for 2011 suggests an increase in energy prices of approximately 18 %. 58 Focus reports on selected European markets Czech Republic

61 Present market situation Heat pump installations are rising annually in the Czech Republic. The first modern day heat pumps were installed during the 1990s, and reliable market information and data has been available since Although the Czech market is primarily based on other heating sources, consumers in general are beginning to become more and more aware of the benefits of heat pumps. Today they are installed primarily in family houses. Industry forecasts would suggest that the number of heat pumps will grow in the coming years, with indicators suggesting a market with high potential. Some new brands have come to the Czech market in many cases unknown brands that are not very reliable and have exhibited quality and performance issues post installation. In many cases they are of Asian origin and are not suited to the specific climatic conditions of the Czech market. These products do present an attractive commercial proposition to customers at the expense of quality and performance. Their level of sales is difficult to quantify, however despite their shortcomings volumes are increasing annually. Market trends Heat pump /2010 type evolution Air/water ,0 % Water/water ,8 % Brine/water ,4 % Others ,7 % Total ,4 % Table 6.3-3: Sales of heat pumps in the Czech Republic Others Air/water Water/water Brine/water Figure 6.3-1: Czech heat pump market, , by type of heat pump (statistics based on approx. 80 % of the market) Costs Air/air Air/water Brine/water Euro Table 6.3-4: Average heat pump unit prices including installation for an average family house with heat losses around 10 kw. Focus reports on selected European markets Czech Republic 59

62 European Heat Pump Statistics OUTLOOK 2011 Brand names The names listed below are the main players on the Czech market. The other unknown brands usually from Asia are not listed. Ground source heat pumps: IVT, Nibe, Thermia, Stiebel-Eltron, Alpha-InnoTec, Dimplex, Viessmann, Vaillant, PZP komplet, Mastertherm. Air/water heat pumps: PZP komplet, Stiebel-Eltron, Dimplex, Alpha-InnoTec, Viessmann, Vaillant, AC heating. Air/air heat pumps: Sharp, Toshiba, Daikin, LG, IVT. Distribution channels Heat pumps are generally distributed by firms that specialise in the sale and installation of heat pumps. It is also possible to buy a heat pump from distributors, however they do not provide any installation or other support services. Sources [1] Czech Statistical Office [2] 2010 GDP at current prices per inhabitant, Eurostat: [3] The only available data dates from 2001 last census. Data concerning the number of dwellings, especially family houses, are difficult to provide as the Czech Statistical Office does not gather such data every year, only once in ten years during census. [4] EU energy observatory: publications/statistics/ statistics_en.htm Industry infrastructure The Czech Heat Pump association CHPA (Asociace pro využití tepelných čerpadel AVTČ) was established in 2000 and includes 70 members comprising of third level institutions and companies dealing with installation, distribution, maintenance, and the import of heat pumps. The main goal of the CHPA is to maintain installation standards and quality and to ensure the technical expertise of its members. It also supports networking activities in the renewables sector and with industry. Training and certification Two different types of courses are provided by CHPA. The first is tailored towards heating engineers as an introductory course for heat pump installation. The second is the EUCERT course, which takes place once a year, is more advanced and is geared towards installers. This course has been delivered since In addition, individual companies provide their own introductory and more advanced training courses and workshops for potential installers. All figures are based on an Exchange rate of 1 Euro = 25 CZK 60 Focus reports on selected European markets Czech Republic

63 6.4 ESTONIA Key facts Population Area km 2 GDP/capita [1] Capital Tallin Number of family houses Number of multi-dwelling houses Number of dwellings in multi-dwelling buildings Number of newly built non-residential buildings in Total number of non-residential buildings Number of new dwellings finished in Average heat demand single/two family house MWh/year Share of RES in final consumption of energy ,1 % [2] Binding target for the use of renewable sources by % National emission factor (CO 2/kWh electricity) g TWh Share TWh Share TWh Share Gas 9,0 14 % 6,2 11% 6,5 9,6 % Petroleum products 7,0 11 % 5,8 11% 6,2 9,2 % Solid fuels 39,9 64 % 35,4 64% 45,6 67,6 % Nuclear 0,0-0,0-0,0 - Renewables 7,0 11 % 7,8 14% 9,2 13,6 % Total 62,9 100 % 55,2 100% 67,5 100 % Table 6.4-1: Gross inland consumption of energy in Estonia Gross electricity generation Fuel TWh Share TWh Share TWh Share Gas 0,70 6,6 % 0,51 5,8 % 0,30 2,3 % Petroleum products 0,04 0,4 % 0,05 0,6 % 0,04 0,3 % Solid fuels 9,65 91,1 % 7,69 87,5 % 11,20 86,6 % Nuclear 0,00 0,0 % 0,00 0,0 % 0,00 0,0 % Renewables 0,20 1,9 % 0,54 6,1 % 1,00 7,7 % Others 0,00 0,0 % 0,00 0,0 % 0,40 3,1 % Total 10, % 8, % 12, % Table 6.4-2: Electricity mix for Estonia [2]. Energy prices Average end consumer prices including distribution and taxes during 2009 and 2010: Electricity 0,081 Euro/kWh 0,094 Euro/kWh Heating oil 0,09 Euro/kWh 0,095 Euro/kWh Pellets 0,045 Euro/kWh 0,046 Euro/kWh District heating 0,058 Euro/kWh 0,062 Euro/kWh Table 6.4-3: Energy prices in Estonia Focus reports on selected European markets Estonia 61

64 European Heat Pump Statistics OUTLOOK 2011 Present market situation During 2010 a small but noticeable upturn in the market occurred, compared with 2009 and this is expected to continue through The heat pump market is linked closely to the building sector, both new built and renovation. The retrofit segment is one of growing importance for heat pumps, namely in the area of large infrastructural projects, where this technology continues to make solid advances. Despite the recession, the interest in heat pumps remains undiminished in Estonia. However the challenging environment has also led to stiff price competition, and, in some cases, downward pressure as much as 25 % has been experienced. Market trends Economic growth is expected to be of the order of 4 % in Estonia during The early signs of recovery were signaled by increasing new car sales (up 57 % year on year) coupled with a healthier property market. Despite some signs of recovery, and an improved credit environment amongst the financial institutions, people are in general proceeding conservatively. The knock-on effect to heat pumps is therefore one of caution. The technical advancements with heat pump technology enabling broader application of the systems in both new and retrofit environments, in addition to larger scale applications will drive the ongoing growth in the market. The most growth in the coming years is expected to come from the air source product category. The following table shows the sale of heat pumps in Estonia between based on the estimation of ESPEL. Table 6.4-4: Sale of heat pumps in Estonia based on estimation of ESPEL. Heat pump /2010 type evolution Air/water ,4 % Brine/water ,9 % Exhaust air/water ,0 % Air/air (reversible) ,1 % Total ,5 % Air/air (reversible) Exhaust air/water Air/water Brine/water Figure 6.4-1: Estonian heat pump market, , by type of heat pump Table 6.4-5: Average end consumer prices in Estonia. Air/air Air/water Ground source Euro Focus reports on selected European markets Estonia

65 Brand names Some of the most common brand names available in the Estonian market are listed below. Ground source heat pumps: Thermia, NIBE, Junkers, Buderus, Vaillant, Viessmann, IVT, Lämpöässä, Carrier, Alpha-InnoTec, Dimplex, Terra, Stiebel-Eltron. Air/water heat pumps: Mitsubishi, NIBE, Sanyo, Alpha-InnoTec, Daikin, Viessmann, Carrier, IVT, Thermia, Vaillant. Air/air heat pumps: Mitsubishi, Sanyo, Fujitsu, LG, IVT, Daikin, Panasonic, Sharp, Toshiba. Exhaust air heat pumps: NIBE, IVT, Carrier, Buderus. Distribution channels Wholesalers and larger companies dominate the heat pump market. The last number of years has seen heat pumps offered by construction material stores and web-stores. National industry associations Estonian Heat Pump Union (Eesti Soojuspumba Liit or ESPEL), formed 2001 and is since 2002 a member of EHPA. At present ESPEL has 25 members. Members comprise importers, installers, distributors and others with interests in the heat pump sector. The Union serves as the official voice for the heat pump area on a national level. This year ESPEL is celebrating its 10th year in existence. Training and certification Since 2008 ESPEL is responsible for organizing training with the cooperation of Tallinn Engineering University for the members of the Union and other heat pump sector actors throughout Estonia. Those who pass the training courses are awarded ESPEL s certificate. Incentive schemes In Estonia there are currently no incentive schemes for heat pumps. Sources [1] 2010 GDP at current prices per inhabitant, Eurostat: [2] EU energy observatory: publications/statistics/ statistics_en.htm Focus reports on selected European markets Estonia 63

66 European Heat Pump Statistics OUTLOOK FINLAND Key facts Population Area km 2 GDP/capita [1] Capital Helsinki Number of single/two-family houses and holiday homes Number of dwellings in multi-dwelling buildings Number of non-residential buildings Rate of new construction single family houses Average heat demand per single/two family house MWh/year Average heat consumption for all residential buildings kwh/m 2 /year Average heat consumption in new residential buildings 75 kwh/m 2 /year Average heat consumption in the building stock (residential) kwh/m 2 /year Share of RES in final consumption of energy 2008 [2] 30,5 % Binding target for the use of renewable sources by % National emission factor (CO 2/kWh electricity) 2008 [3] 168 g Table 6.5-1: Electricity mix for Finland [2] Gross electricity generation Fuel TWh Share TWh Share Gas 11,85 15,3 % 10,19 14,1 % Petroleum products 0,43 0,6 % 0,53 0,7 % Solid fuels 13,71 17,7 % 15,52 21,5 % Nuclear 22,96 29,6 % 23,53 32,7 % Renewables 27,82 35,9 % 21,69 30,1 % Others 0,67 0,9 % 0,60 0,8 % Total 77, % 72, % The emissions from power generation from coal, natural gas and peat were 16,9 million tonnes of carbon dioxide in 2010, one-third more than the previous year. The growth is explained firstly due to increased CHP power generation, secondly due to an increase in overall energy demand, and thirdly due to the fact that reduced electricity imports from the west had to be replaced mainly by coal and other fossil fuels. Nevertheless, electricity generated in Finland in 2010 was still 59 % greenhouse gas emissions-free. The share of renewable energy sources was 31 % of all power production. The use of domestic wood and other bioenergy increased by one quarter in Table 6.5-2: Energy prices in Finland 2010 (December). [3] Energy prices Average end consumer prices including distribution and taxes during 2010: Electricity (Direct electricity heated house) 0,124 Euro/kWh Heating oil 0,095 Euro/kWh Pellets 0,053 Euro/kWh District heating 0,072 Euro/kWh 64 Focus reports on selected European markets Finland

67 Present market situation The market for domestic heat pumps in Finland started to recover in Partly because of the hard winter, air-air heat pump sales did not reach 2009 levels, however ground source heat pump sales were 32 % ahead of 2009 figures. The technology is gradually reaching good recognition levels and acceptance amongst the general public. Heat pumps are the preferred choice in new construction as well as for retrofitting existing building stock. In addition to the new single family house segment, interest for heat pumps in the replacement market is also increasing. Heat pumps are now in use in nearly 30 % of Finnish single family houses. Heat Pump penetration in new small houses is almost 50 %. The subsidy scheme, which was introduced for renovation and extension works in private homes in 2010 should ensure an ongoing positive trend in the heat pump market. The real competitor to heat pumps is the status quo and inertia towards making any changes in heating systems. Market trends 2010 also saw a recovery in the heat pump sector following the period of decline caused primarily by the global economic recession and slowdown in the construction of new houses. Both the new built and replacement market for brine/water heat pumps grew last year. A good forecast for the future would suggest a growing share of brine/water heat pumps in all market segments Air/air (reversible) Exhaust air Air/water Brine/water Figure 6.5-1: Finnish heat pump market, , by type of heat pump. [4] Heat pump /2010 type evolution Air/water ,8 % Brine/water ,8 % Exhaust air ,3 % Air/air (reversible) ,2 % Total ,0 % Table 6.5-3: Sales of heat pumps in Finland, [4] Air/air heat pumps are predominantly installed in existing homes currently using direct electric heating. This is currently the most cost effective solution for these types of houses, but there are increasingly cases where electrically heated homes are being retrofitted with water based heat distribution systems comprising a ground source heat pump. A recent trend is to install air/air heat pumps in holiday homes. Several products offer new features enabling defrost mode to avoid freezing during wintertime, and remote monitoring and control via GSM-modem. Air/air heat pumps are often installed to complement direct electric heating. Focus reports on selected European markets Finland 65

68 European Heat Pump Statistics OUTLOOK 2011 Air/water heat pumps are new phenomena in the Finnish heat pump market. Their adoption has been slow due to the challenging cold climatic conditions. Air/water heat pumps are generally replacing or complementing existing oil or electric boilers. Due to the limitations of electricity supply at times of peak demand, it is likely that air/water heat pumps will remain a complementary solution for existing houses. The sale of exhaust air heat pumps is expected to continue to fall in the future. This is due to the fact that the regular types of exhaust air heat pumps are now having difficulties complying with the new building regulations. An interesting subject will be the heat pump heating solution that emerges to address the low energy / passive house segment in Finland, given the challenging climatic conditions. Because of the low number of passive houses built to date, it has not been a sector addressed by the heat pump actors. The ground source heat pump segment is dominated by vertical indirect systems. Horizontal systems do exist but are restricted in use due to the significant space requirements. The main reasons that vertical systems have become so successful are:, Liberal regulations regarding drilling, Favourable crystalline bedrock of high thermal conductivity, Reasonable costs for drilling (25 35 Euro/meter including VAT and collectors) Costs The table below illustrates average end consumer prices, including VAT, for turnkey installation in single family houses. The turnkey solutions includes everything to commission the system, i.e. the heat pump, auxiliary equipment, material and labour costs. Table 6.5-4: Average heat pump unit prices. Air/air Air/water Exhaust air Ground source Euro Brand names Some of the most significant brand names existing on the Finnish market are listed in alphabetical order below. Ground source heat pumps: Carrier, CTC, Gebwell, Danfoss, Dimplex, Innova, IVT, Karhu, Lämpöässä, NIBE, Oilon Home, Stiebel-Eltron, Thermia, Vaillant, Viessmann. Air/water heat pumps: Carrier, CTC, Daikin, Danfoss, Dimplex, Fujitsu, Innova, IVT, Mitsubishi, NIBE, Panasonic, Sanyo, Stiebel-Eltron, Thermia, Vaillant, Viessmann, Ultimate. Air/air heat pumps: Daikin, Electrolux, Fujitsu, Gree, Hitachi, IVT, LG, Mitsubishi, Panasonic, Sharp, Sanyo, Toshiba, Ultimate. Exhaust air heat pumps: Carrier, Enervent, IVT, NIBE, Nilan, Meptek ComfortZone. Distribution channels Dedicated retail networks and wholesalers dominate the heat pump market. Nonetheless, during the last couple of years, air/air heat pumps have been offered at construction materials outlets, mail-order firms, and web-stores. Industry infrastructure The following sections highlight some of the existing industry organisations and schemes that serve as part of the industry s infrastructure. 66 Focus reports on selected European markets Finland

69 National industry association The Finnish Heat Pump Association (Suomen Lämpöpumppuyhdistys ry or SULPU), formed in 1999, represents approximately 130 members. They comprise manufacturers and importers of heat pumps, installers and other companies with an interest in the industry. The Association serves as the official voice for the heat pump industry on a national level. It handles all proposals for new national regulation and legislation as well as international standards that are sent for circulation. Training according to the European Certified Heat Pump Installer scheme has been offered since 2009 by SULPU. Finland is a member of the EHPA Quality label program and joined the IEA HP Program in Incentive schemes Heat pump installations qualify for the tax reduction scheme that applies to renovation and extension works in private households. Based on the scheme, up to 60 % of the labour costs related to renovation and extension may be applied for tax reduction purposes to each owner of a private property. The maximum amount that may be deducted for each owner is Euro In the case of the replacement of oil and electric heating systems by a heat pump, biomass or district heating system, a Euro 30 million subsidy program was launched at the beginning of The subsidy can be maximum 20 % of the investment (less labour costs). Sources [1] 2010 GDP at current prices per inhabitant, Eurostat: [2] EU energy observatory: publications/statistics/ statistics_en.htm [3] Energiateollisuus [4] Sales of air/air heat pumps are based on an estimation made by SULPU. Focus reports on selected European markets Finland 67

70 European Heat Pump Statistics OUTLOOK FRANCE Key facts Population Area km 2 GDP/capita [1] Capital Paris Number of single/two family houses (2009) Number of dwellings in multi-dwelling buildings Number of non-residential buildings Rate of new construction of single/two family houses 1 % Average heat consumption for all residential buildings Average heat consumption in new residential buildings 240 kwh/m 2 /year 75 kwh/m 2 /year Share of energy from RES in final consumption of energy (2009) 12 % Binding target for the use of renewables 23 % National emission factor (CO 2/kWh electricity) g Table 6.6-1: Electricity mix for France [2] Gross electricity generation Fuel TWh Share TWh Share Gas 25,26 4,4 % 23,83 4,4 % Petroleum products 5,86 1,0 % 6,17 1,1 % Solid fuels 23,06 4,0 % 25,89 4,8 % Nuclear 439,45 76,4 % 409,74 75,5 % Renewables 74,59 13,0 % 69,96 12,9 % Others 6,65 1,2 % 6,76 1,2 % Total 574, % 542, % Table 6.6-2: Energy prices in France Energy prices Average end consumer prices during 2009: Electricity 0,1096 Euro/kWh Heating oil 0,0577 Euro/kWh Gas 0,0781 Euro/kWh District heating 0,0651 Euro/kWh 68 Focus reports on selected European markets France

71 Present market situation Since the middle of 2010, for the first time, sales of all categories of heat pumps are included in the national sales statistics for France. Heat pump /2010 type evolution Air/water ,5 % Water/water ,3 % Brine/water ,4 % Direct expansion/ ,8 % water or dir. condensation Others ,8 % Exhaust air/air Reversible ,5 % Air/air ,9 % Air/water ,0 % Brine/water ,0 % VRF Sanitary hot water ,9 % Total ,0 % Table 6.6-3: Sale of heat pumps in France Air source heat pumps: Air/air heat pumps: With approximately reversible air/air units comprising splits and multi-splits sold in 2010, the market posted an increase of 14,9 % compared with 2009 and this marks a return to 2008 levels. Year-on-year comparisons show a very robust period from May-August (up 30 % on the same period in 2009), with the period September-December seeing more measured increases, with 5 % growth compared with the same period in Air/water heat pumps: The market dropped by about 50 % in 2010, on the back of a decrease of 18 % in Monobloc heat pumps: The market for monobloc units declined by 56 % in 2010 following a decrease of 35 % in Splits: They didn t fare as badly as monoblocs. After a fall of 16 % in 2009, the decrease in 2010 was 34 %. It can be observed that during 2010 monobloc units accounted for only 25 % of the total air/water heat pumps market, compared with 34 % in Ground source heat pumps: This market segment has traditionally been much less volatile than the air/water segment. For example in the years 2007 and 2008, the total GSHP market grew 0,8 % and 4,5 % respectively. However, in 2009 and 2010, this segment suffered declines of 26 % and 57 %. The high temperature category accounts for 28 % of the total GSHP segment. Sanitary hot water heat pumps: This market has exhibited rapid growth in the last year, in no small way due to a tax relief incentive of 40 % introduced in During 2010, hot water heat pumps were installed, representing a growth of 59 % in this market. Focus reports on selected European markets France 69

72 European Heat Pump Statistics OUTLOOK Figure 6.6-1: French heat pump market, , by type of heat pump. 0 Sanitary hot water Reversible Exhaust air/air Others Air/water Water/water Direct expansion/water or dir. condensation Brine/water External influencing factors The economic crisis was a key factor impacting negatively on the sale of heat pumps during Since 2009, households have postponed or cancelled indefinitely many planned renovations or discretionary spending such as upgrades to heating systems. The price of fossil fuels has remained comparatively low making oil and gas alternatives more attractive to consumers at the expense of heat pumps. The success of solar photovoltaic impacted strongly on the market for heat pumps, as the target market of both technologies is the same one. Marketed and sold pretty much as an investment opportunity, many private individuals viewed solar PV and heat pumps purely in terms of their investment return potential (RoI), and opted for the more favorable option. Ongoing reductions in the tax credit also contributed in no small way to the decline in the sales of heat pumps in The consecutive tax credit reductions have served only to make consumers generally less likely to opt for heat pumps, and encouraged installers for their part to propose the boiler replacement option. The reduction in building permits is another key reason for the 2010 reduction. Even though consumers are enthusiastic about installing heat pumps in new building scenarios, they are much less likely to replace the heating system in their existing dwelling. There is therefore a direct link between building permits issued and the sales of heat pumps. Market trends Medium term trends After a dramatic decrease in the period May August 2010, all product categories saw some degree of recovery towards the end of the year. The perceived impressive performance of products in the sector in delivering comfort to consumers and the climatic conditions of the summer in 2010 all contributed to an earlier than usual start to the heating season. Allied to this was the increase of 10 % in the number of the building permits issued at the end of 2010, which added a boost to planned construction activity in the residential and tertiary sectors. Finally there now appear to be signs once again of renewed investment activity, with forecasts suggesting 2011 should be on a par with 2010 for the tertiary sector. 70 Focus reports on selected European markets France

73 Costs Air/air Air/air Air/water Ground source Ground source (Multi-split) (Ducted (Horizontal) (Vertical) systems) Euro Table 6.6-4: Typical end consumer prices for France. Brand names Ground source heat pumps: Airwell, Ajtech, Alpha Innotec France, Atlantic, Auer, Baxi France, Bosch Thermotechnik, Carrier SCS, Ciat, Daikin, De Dietrich Thermique, Dimplex,France Air, France Géothermie, MTS Group, Oertli, Saunier Duval, Sofath, Stiebel Eltron, Viessmann, Wavin-Climasol, Weishaupt, Zaegel Held. Air/water heat pumps: Airwell, Ajtech, Alpha InnoTec France, Atlantic, Auer, Baxi France, Bosch Thermotechnik, Carrier SCS, Ciat, Daikin, De Dietrich, Dimplex, Eurofred Groupe, France Air, France Géothermie, Hitachi, LG Electronics France, Mitsubishi Electrics, MTS Group, Oertli, Panasonic France, Samsung, Sanyo Airconditioners Europe, Saunier Duval, Sofath, Stiebel Eltron, Technibel, Viessmann, Wavin-Climasol, Weishaupt, Yack, Zaegel Held, Zhendre. Air/air heat pumps: Airwell, Atlantic, Carrier SCS, Daikin, Eurofred Groupe, France Air, Hitachi, LG Electronics France, Midea France, Mitsubishi Electric, Panasonic France, Samsung, Sanyo Airconditioners Europe, Saunier Duval, Technibel, Yack, Zhendre. Distribution channels As in many other European countries, there are two principal distribution channels. The first one is direct sales by manufacturers to installers. The second one is indirect sales via wholesalers. Ground source heat pumps tend to be more often sold via the direct channel, whereas air/air heat pumps are mainly sold indirectly, and air/water in both channels. National industry associations UNICLIMA is the French association of Heating, Ventilation, Air conditioning and Refrigeration industries. UNICLIMA, as the industry s principal representative body, acts on behalf of its members with regard to French, European and International authorities. A large proportion of its members sell heat pumps, in particular air/air and air/water systems. UNICLIMA is also a member of AFPAC, the main French representative association for actors in the heat pump sector, including manufacturers, installers, research organisations, and energy utilities. Training and certification A qualification for installers, Quali PAC, is managed by the Qualit ENR Association. Currently companies have the qualification. To become Quali PAC certified, an installer has to complete a training course in accordance with EHPA regulations. The Quali PAC company is obliged to be audited each year. Product label NF PAC is a French product label for heat pumps that was launched in 2007 with the input of AFPAC. This label was approved by AFNOR Certification and is managed by Certita. This label sets a minimum COP level, with test conditions in accordance with EN (nominal and application conditions). Moreover, NF PAC specifies requirements regarding minimum quality levels, which is monitored and controlled by random audits performed by an independent body. Discussions have started recently between the EHPA and NFPAC to agree on mutual recognition of test results acquired from heat pump performance tests completed under the two organisations quality label schemes. Focus reports on selected European markets France 71

74 European Heat Pump Statistics OUTLOOK 2011 Sources [1] 2010 GDP at current prices per inhabitant, Eurostat: [2] EU energy observatory: publications/statistics/ statistics_en.htm Incentive schemes A subsidy scheme for heat pumps is currently available in France. The subsidy operates by means of a tax reduction. In the French scheme, it is the cost of the heat pump unit that serves as a basis for the deductible amount. The subsidies, that have been available since 2005, vary depending on the year of purchase and type of heat pump. In 2011, the rates were 36 % of the cost for a ground source heat pump and sanitary hot water heat pump, and 22 % in the case of air/water heat pumps. 72 Focus reports on selected European markets France

75 6.7 GERMANY Key facts [1] Population [2] Area km 2 GDP/capita [3] Capital Berlin Number of single/two family houses (2009) Number of dwellings in multi-dwelling buildings (2009) Number of non-residential buildings in Germany n/a Rate of new construction single/two family houses (2009) 56,7 % Average heat demand single/two family house MWh/year Share of RES in final consumption of energy ,5 % Binding target for the use of renewable sources by % National emission factor (CO 2/kWh electricity) g Oil 34,3 % 34,7 % Gas 21,6 % 21,8 % Black Coal 12,7 % 11,0 % Brown Coal 11,0 % 11,3 % Nuclear 11,4 % 11,0 % Renewable Energies 8,1 % 8,9 % Others 0,9 % 1,3 % Gross electricity generation Fuel TWh Share TWh Share Gas 85,39 13,4 % 84,87 14,3 % Petroleum products 8,60 1,3 % 9,64 1,6 % Solid fuels 275,24 43,2 % 251,15 42,4 % Nuclear 148,50 23,3 % 134,93 22,8 % Renewables 90,31 14,2 % 93,99 15,9 % Others 29,19 4,6 % 17,88 3,0 % Total 637, % 592, % Table 6.7-1: Primary energy demand in Germany, [4] Table 6.7-2: Electricity mix for Germany [2] Energy prices Average end consumer prices including distribution and taxes: Electricity 0,16 Euro/kWh Heating oil 0,07 Euro/kWh Gas 0,06 Euro/kWh Pellets (bulk delivery) 0,04 Euro/kWh Pellets (sack delivery) 0,06 Euro/kWh District heating 0,08 Euro/kWh Table 6.7-3: Energy prices in Germany Present market situation 2010 saw a decline in the volume of space heating heat pumps sold in Germany for the second year in a row. In total units were sold marking a 9,7 % decrease Focus reports on selected European markets Germany 73

76 European Heat Pump Statistics OUTLOOK 2011 compared with 2009 (2009 had already seen a market decline of 13,7 % on the previous year for space heating). A number of factors are responsible for this trend over the last two years. Much of the decline has its origins in the global financial crisis and the uncertainty this has brought with it. In addition, the prevailing low prices for heating oil and gas, coupled with the higher investment costs of heat pumps in comparison, has caused many consumers to be reticent about investing in energy efficient heating systems. Another contributing factor to the decline in 2010 was the temporary budget-freeze in the Marktanreizprogramm (MAP), the most important incentive program for renewable heating in Germany. It occurred from May to July, and the subsequent tightening of the qualifying conditions saw the minimum seasonal performance factor (SPF) being raised and heat pumps installed in new buildings no longer being eligible for funding. This led to an enormous decline of about 80-90% in applications for funds. The negative reaction that ensued resulted in an easing of the minimum SPFs later in also marked the first year in Germany in which more air to water heat pumps (52 % for space heating) were sold than ground source heat pumps. Whereas practically the same volume of air/water heat pumps were sold as 2009, the quantities of brine/water and water/water dropped by 24,3 % and 25,1% respectively. Despite the overall market decline since 2008, more space heating heat pumps were sold than in Hence the recent decline should also be viewed in the context of normalisation of annual volumes, following exceptionally high figures in When sanitary hot water heat pumps are included, the overall market volume was units for the entire year. Results for the first half of 2011 have been positive, with increasing volumes. Whereas volumes of ground source heat pumps continue to decline, air/water heat pumps have shown a steady increase, and a total increase of 5-10% during 2011 is now forecast Space heating Water heating Figure 6.7-1: German heat pump market development Table 6.7-4: Sales of heat pumps in Germany Heat pump /2010 type evolution Air/water ,5 % Water/water ,1 % Brine/water ,3 % Reversible ,4 % Sanitary hot water ,3 % Others ,0 % Total ,2 % 74 Focus reports on selected European markets Germany

77 The domestic market segmentation by energy source is shown in the following figure: Others Sanitary hot water Reversible Air/water Water/water Brine/water Figure 6.7-2: German heat pump market, , by type of heat pump. Market trends The extension of the Marktanreizprogramm (MAP) to include heat pumps in 2008 and the obligation to use a renewable energy source in new buildings has had a positive impact on the market. However, following the decrease in sales volume caused by the economic crisis since 2009 and the ongoing uncertainty relating to the incentive policy, the overall outlook based on the steady and continuous growth in the years ahead must be qualified: even though it is to be expected that the overall growth trend will continue, it is estimated that the speed of that growth will ease. Key to ongoing market growth and development will be a longterm and consistent incentive program. Additionally some new federal and regional incentive programs will underpin the growth in heat pump sales volumes. Following the introduction of the EEWärmeG law, which obliges house builders to partially use renewable technologies for heating, in 2010 the federal state of Baden-Württemberg was the first federal state to introduce a law to enforce the use of renewable heating in the building stock for retrofits. The law dictates that in the case of renovation, renewable energies have to account for at least 10 % of the buildings energy requirement. In addition, the Seasonal Performance Factor (SPF) has to be 3,5 or higher. Other federal states like Berlin and Saarland have stated that they wish to follow the Baden- Württemberg s lead. With an increasing number of federal and regional laws encouraging the use of heat pumps and other renewable heating systems, and the recovery of the global and national economy, the sales volume of heat pumps is expected to once more increase in the coming years. In future the market share of air/water heat pumps as well as heat pumps with an output of 50 kw or higher is expected to increase. A further development is the expected ongoing improvement in efficiency (COP) due to developments in heat pump technologies and the widespread further training of heat pump installers and drillers. Increasing sales of both sanitary hot water heat pumps, and combinations with other renewable heating systems (e.g. solar thermal) as hybrid systems are also expected as part of the long-term trend. Costs Air/water Water/water Brine/water Euro Table 6.7-5: Typical investment cost for heat pump systems in single family houses (2009). Focus reports on selected European markets Germany 75

78 European Heat Pump Statistics OUTLOOK 2011 Brand names The following brands are distributing heat pumps in Germany: Alpha InnoTec, August Brötje, Bartl, Bosch/Junkers, Carrier, Cofely, Daikin, ELCO, ENERTECH, Fujitsu General, Glen Dimplex, Güstrower Wärmepumpen, Hautec, Heliotherm, Hoval, IDM, ITEC, IWS, LG, MHG, Mitsubishi Electric, NIBE, Novelan, Ochsner, Rehau, Remko, Rotex, Roth, SANYO, Schüco, SOLVIS, Stiebel Eltron, tecalor, TRANE, Vaillant, Viessmann, Voß, Waterkotte, Weishaupt, Wolf. Distribution channels Depending on a company s preferred strategy, various distribution channels apply at present in the German market. Major approaches are distribution via wholesaler (to retailer and final consumer), or via dedicated retail networks. Industry infrastructure The German Heat Pump Association e. V. (Bundesverband Wärmepumpe or BWP) is an inter-trade organization based in Berlin that covers the entire value chain. Its members comprise approximately 650 tradesmen, architects and designers as well as drilling companies, heat pump and component manufacturers and energy providers that promote the use of efficient heat pumps. The German Heat Pump Association organizes the marketing campaign Zeichen setzen Wärme pumpen and hosts the Forum Wärmepumpe an annual conference of the German heat pump market. It is a member of the German Renewable Energy Federation BEE (Bundesverband Erneuerbare Energie e.v.). The BWP represents 95 percent of the German heat pump industry, and its members account for approximately employees and generate more than Euro 1,5 billion turnover. Sources [1] Statistisches Bundesamt; Bundesumweltministerium (Erneuerbare-Energien.de). [2] EU energy observatory: publications/statistics/ statistics_en.htm [3] 2010 GDP at current prices per inhabitant, Eurostat: [4] AG Energiebilanzen. Incentive schemes The main incentive program for renewable heating systems is the Markt - anreizprogramm (MAP), which has incorporated heat pumps since To access the fund, it is mandatory to verify a minimum SPF: 3,5 for air to water and 3,8 for ground source heat pumps. They are calculated in accordance with VDI Since 2010 the COP values have to be certified by an accredited test institute or the heat pump must have an EHPA Quality Label. A bonus subsidy is also available by combining heat pumps with solar heat and through various other investments in energy efficiency. The EEWärmeG obliges house builders to use renewable heating systems for a proportion of a dwelling s total requirements. In addition to this requirement, heat pumps have to reach a minimum SPF of between 3,3 and 4,0 calculated in accordance with VDI 4650 (depending on heat source and type of building). Alternatively house builders can invest in various other energy efficient technologies. A comparable regional law was launched in the previous year in Baden-Württemberg. It additionally obliges one to invest in renewable heating in the building stock in the case of an exchange of the heating system (retrofit). Other states plan to introduce comparable laws. EnEV is the German implementation of the European Building Directive (EPBD), which regulates maximum value of primary energy consumption (including losses of the heating system and heat demand, i.e. insulation) in new buildings. Required values can be reached with the help of very good insulation or with environmentally friendly technologies like heat pumps. The regulation was launched in 2001 and has since then been modified several times. 76 Focus reports on selected European markets Germany

79 6.8 HUNGARY Key facts [1] Population Area km 2 GDP/capita [2] Capital Budapest Number of single/two family houses Number of dwellings in multi-dwelling buildings Number of non-residential buildings Rate of new construction single/two family houses 3 4 % Share of RES in final consumption of energy 8 % Binding target for the use of renewable sources by ,6 % National emission factor (CO 2/kWh electricity) g Gross electricity generation Fuel TWh Share TWh Share Gas 15,30 38,2 % 10,50 29,2 % Petroleum products 0,36 0,9 % 0,63 1,8 % Solid fuels 7,09 17,7 % 6,34 17,7 % Nuclear 14,82 37,0 % 15,43 43,0 % Renewables 2,36 5,9 % 2,90 8,1 % Others 0,10 0,2 % 0,11 0,3 % Total 40, % 35, % Table 6.8-1: Electricity mix for Hungary [1] Energy prices Average end-consumer prices including distribution and taxes during 2009 and 2010: Electricity 0,17 Euro/kWh 0,18 Euro/kWh Electricity heat pump tariff 0,115 Euro/kWh 0,1111 0,1168 Euro/kWh Heating oil 1,11 Euro/l 0,065 Euro/l Gas 0,4 Euro/kWh 0,05 Euro/kWh Pellets 0,03 Euro/kWh District heating 0,05 Euro/kWh Table 6.8-2: Energy prices in Hungary Present market situation In 2010 growth of the Hungarian heat pump market was negligible, the main factors being the ongoing economic crisis, lack of support and the unfavourable cost relativities compared with other heating alternatives. Within the overall heat pump market, air source systems increased their proportion. Due to the effects of the ongoing worldwide recession the growth of the Hungarian heat pump market has ceased over the last 3 years: with annual sales approximating units between 2008 and In 2010 air-source heat pumps accounted for in excess of 50 % of total sales is not showing any signs of a reversal of the current situation. The primary causes of the market stagnation are as follows: Focus reports on selected European markets Hungary 77

80 European Heat Pump Statistics OUTLOOK 2011, The current lack of state support (subsidies and incentives) for heat pump systems. A new incentive scheme will commence on 15 August 2011, and it is hoped that this will assist in stimulating the market., The gas price and the relative gas/electricity price relativity is disadvantageous. (Gas-price is low, while electrical energy price is above the EU average)., The favourable electricity tariff corresponding to heat pumps just relates to heating mode, and during the heating season (not cooling mode during the summer months). Many foreign multinational companies operating in Hungary made significant investments in heat pump systems in recent years. However, these types of exemplary installations have all but ceased in the current climate. The lack of coherent national renewable energy legislation is also not conducive to encouraging the adoption of heat pump technology by consumers. Market trends Figure 6.8-1: Hungarian heat pump market development Table 6.8-3: Sales of heat pumps in Hungary Heat pump type Evolution Air/water ,8 % Water/water ,6 % Brine/water ,9 % Exhaust air ,1 % Reversible ,7 % Air/water ,4 % Brine/water ,5 % VRF ,9 % Sanitary hot water ,4 % Total ,7 % Table 6.8-4: Typical investment cost for heat pump systems in single family houses in Hungary. Costs Air/water Water/water Brine/water Euro Focus reports on selected European markets Hungary

81 ,7% 26,6% 14,4% 10,1% 17,3% 18,5% 11,1% 7,3% 8,6% 9% 23,8% 18,3% Reversible Sanitary hot water VRF Air/water Brine/water Exhaust air Air/water Water/water Brine/water Figure 6.8-2: Hungarian heat pump market, , by type of heat pump. Brand names The following companies are distributing heat pumps in Hungary and these companies are strong participants of the Hungarian heat pump market also: Aermec, Bosch, Vaillant, Stiebel Eltron, Daikin, Viessmann, CIAT, Ochsner, NIBE, Dimplex. Distribution channels Depending on companies strategies, different distribution channels are present on the Hungarian market. Major approaches are distribution via wholesalers (to retailers and final consumers), or via dedicated retail networks, or via designing companies. Industry infrastructure The Hungarian Heat Pump Association (Magyar Hőszivattyús Szövetség or MAHŐSZ) is an inter-trade organization based in Budapest that covers the whole value chain. Its members comprise approximately 60 designers as well as drilling companies, heat pump and component manufacturers and energy providers that promote the use of efficient heat pumps. The Hungarian Heat Pump Association organizes the training campaign Heat pump Education program and hosts the Heat Pump Forum an annual conference of the Hungarian heat pump market. It is a member of the Hungarian Association of Renewable Energy Sources. Sources [1] EU energy observatory: publications/statistics/ statistics_en.htm [2] 2010 GDP at current prices per inhabitant, Eurostat: ww.epp.eurostat.ec.europa.eu Incentive schemes and heat pump related legislation The main incentive programs for renewable heating systems for private individuals are the National Energy Saving Plan (NEP) since 2005 and Green Investment Scheme (ZBR) since To access the fund it is obligatory to verify a minimum 3,5 SPF. With regard to the climate bonus, which pays 27 % more, buildings became 40 % more energy saving compared with the minimum requirement. SPFs are calculated in accordance with VDI Stock/renovation New houses built after after Euro Euro Euro Euro Euro Euro Table 6.8-5: Heat pump incentive scheme in Hungary (approximate maximum amounts). Focus reports on selected European markets Hungary 79

82 European Heat Pump Statistics OUTLOOK IRELAND Key facts Population [1] Area km 2 GDP/capita [2] Capital Dublin Number of single/two family houses Number of dwellings in multi-dwelling buildings Number of non-residential buildings (estimated) Number of occupied dwellings Rate of new construction of single/two family houses Average heat consumption in the building stock (residential) Average heat consumption for all residential buildings Average heat consumption in new residential buildings 18,4 MWh/year 16 MWh/year 9 MWh/year Share of RES in final consumption of energy ,9 % Binding target for the use of renewable sources by % National emission factor (CO 2/kWh electricity) g Table 6.9-1: Electricity mix for Ireland [1] Gross electricity generation Fuel TWh Share TWh Share Gas 16,72 55,4 % 16,30 57,7 % Petroleum products 1,70 5,6 % 0,92 3,3 % Solid fuels 7,89 26,1 % 6,63 23,5 % Nuclear 0,00 0,0 % 0,00 0,0 % Renewables 3,54 11,7 % 4,04 14,3 % Others 0,34 1,1 % 0,35 1,2 % Total 30, % 28, % Table 6.9-2: Energy prices in Ireland 2010 (April). Energy prices Average end-consumer prices including distribution and taxes: Electricity ( kwh/year household electricity) [3] 0,1612 Euro/kWh Heating oil [4] 0,0718 Euro/ kwh Gas ( GJ/year household gas) [3] 0,05 Euro/kWh Pellets (bulk delivery) [4] 0,0451 Euro/kWh Pellets (sack delivery) [4] 0,0671 Euro/kWh District heating n/a Energy trends All fuels, with the exception of peat and renewables, experienced reductions in consumption in Oil has become the dominant fuel in the residential sector, more than doubling its share from 17 % in 1990 to almost 39 % in Electricity is the second most dominant fuel in the sector at 22%. Natural gas usage increased by a factor of almost six over the period to become the third fuel of choice at 20 % share. The renewables share of energy used in households in 2009 was 1.7 %. Renewable energy in total grew by 14 % during 2009 and by 15 % per annum on average in the period Since 1990, renewable energy has grown by 297 % (7,5 % per annum on average) in absolute terms. 80 Focus reports on selected European markets Ireland

83 The target for Ireland in the European Renewable Energy Directive (2009/28/EC) is a 16 % share of renewable energy in gross final consumption by The contribution from renewables in 1990 was 2,2 % rising to 4,9 % in 2009 [5]. Heating trends Centralized boilers, either oil or gas, utilizing wet heat distribution systems combined with radiator heat emitters are the most prevalent type of heating system used in Ireland. Outside of the main cities and towns, where natural gas is available, oil is still one of the major methods of heating, and solid fuels like turf/peat and coal still play an important role particularly in rural locations. A significant number of direct electric and electric storage heating systems are installed in both the domestic and commercial sectors in Ireland, although the new building regulations now make the deployment of these systems difficult. Renewable alternatives such as biomass boilers (wood pellets), heat pumps and solar thermal became popular in the last ten years, assisted by government grants introduced to assist the installation costs. However the adoption of these technologies has suffered a major slowdown in the last number of years. Heat pump trends & outlook The heat pump sector emerged in Ireland in the early to mid 2000s. After growing rapidly from a very low base, sales grew rapidly in the period up to 2008, peaking at just over units in that year. For a number of reasons the sector has suffered a severe setback since that time, reflecting the national economic and financial crisis, and construction sector slump. Unit sales fell significantly in the last number of years, with sales in 2010 totalling units. The key factors that have caused the dramatic slowdown in the sector are as follows:, The property crash and dramatic slowdown in the Irish construction sector as a whole., The recession that has gripped the Irish economy since 2008, and associated austerity measures introduced by the Irish Government in 2009 in an effort to curb spending and stabilise the economy., The phased reduction of subsidies and incentives for heat pumps from 2008, with the eventual complete withdrawal of financial supports for those products in The market is expected to remain relatively static during 2011 with a possible gradual recovery in the sector in The following table and figure illustrate the development of the sector between 2002 and Year Residential New Units in Year Cumulative Units Total installed capacity (MW) Commercial New Units in Year Cumulative Units Total installed capacity (MW) Total New Units in Year Cumulative Units Total installed capacity (MW) Table 6.9-3: Sales of heat pump in Ireland (units sold and capacity installed). [6] Focus reports on selected European markets Ireland 81

84 European Heat Pump Statistics OUTLOOK 2011 Figure 6.9-1: Irish heat pump market development (domestic and commercial) [6] Heat pump market segments Ground source heat pumps emerged as the system of choice in Ireland in the early stages of market development. In recent years however, reflecting a similar trend in most other European markets, air source heat pumps have increased in popularity and in 2010 accounted for approximately 56 % of overall sales. In the initial stages of market development (pre 2008), heat pumps were mainly installed in new residential houses, standalone installations being the most common. As the renovation sector developed, particularly driven by air to water units, installations in these environments have usually taken the form of oil and gas boiler replacement, and in some cases has seen heat pumps installed together with the existing boilers. Most of the heat pumps deployed are primarily for space heating, and in many cases also in conjunction with an auxiliary or back up immersion heater. More recent years have also seen the installation of heat pumps combined with other renewable solutions such as solar collectors. Hybrid systems are also now becoming popular as in other markets, to provide multi energy solutions to consumers. Outside of the residential sector heat pumps have also achieved a level of acceptance in the light commercial sector in Ireland with installations in environments such a hotels, guesthouses and retirement homes becoming popular. Commercial applications now account for approximately % of all installations. Sanitary hot water 0,2% Exhaust air/water 6,3% Industrial / commercial 10% Brine/water 33,3% Figure 6.9-2: Irish 2010 market by type of heat pump. Air/water 49,2% Water/water 1% 82 Focus reports on selected European markets Ireland

85 Costs Average Installed Price per Unit Exhaust air Air/water Ground source Price in Euro and inclusive of VAT Table 6.9-4: Average heat pump end user unit prices. [6] Brand names There is one indigenous manufacturer of heat pumps in Ireland, namely Geostar Engineering. Glen Dimplex is Irish owned and headquartered in Ireland. It supplies products through its Irish subsidiary Dimplex Renewables. Most leading European and Asian manufacturers are represented in the Irish marketplace as follows: Ground source heat pumps: Alpha-Innotec, Danfoss, Dimplex, Geostar, Hautec, Heliotherm, IVT, NIBE, Ochsner, Stiebel Eltron, Thermia, Viessmann, Waterfurnace, Waterkotte. Air/water heat pumps: Aermec, Alpha-Innotec, Danfoss, Daikin, Dimplex, Hautec, Heliotherm, Hitachi, IVT, Kingspan (Aeromax), Mitsubishi, NIBE, Ochsner, Sanyo, Stiebel Eltron, Thermia, Toshiba, Viessmann, Waterfurnace, Waterkotte. Exhaust air heat pumps: Carrier, Dimplex, IVT, NIBE. National industry association 2011 saw the formation of the Heat Pump Association of Ireland (HPAI). All major vendors and distributors are represented. The Association s main objectives centre around the promotion and understanding of heat pump technology, supporting the growth and development of the sector, maintenance of quality standards, and training and accreditation of installers. The Geothermal Association of Ireland (GAI) was formed in January 1998 to promote the development of geothermal resources in Ireland. The GAI is a member of the European Geothermal Energy Council and of the International Geothermal Association. Training and certification SEAI in conjunction with the Renewable Energy Installer Academy (REIA) has developed training courses for various key renewable technologies including heat pumps. These courses are FETAC accredited (Further Education and Training Awards Council). Currently, throughout Ireland, there are a number of independent course providers offering renewable energy training courses, which include heat pump training courses. Incentive schemes In 2006 the Greener Homes Scheme was launched and provided financial support to the installation of heat pumps in the residential sector. Administered by SEAI, the Sustainable Energy Authority of Ireland, the scheme provided financial incentives to support the installation of heat pumps (and other renewable heat technologies) initially in all buildings. This changed in 2009 when following changes to the building regulations the grant became eligible for existing buildings only (retrofit). An announcement in May 2011 has seen the end of the Greener Homes Scheme and an end to any direct financial support for the installation of heat pumps. Financial support for heat pumps was also available for non-residential installations via the ReHeat Program. Launched in 2007, the scheme provided grant support of up to 30 % of eligible costs. The program was however suspended at the end of Sources [1] EU energy observatory: publications/statistics/ statistics_en.htm [2] 2010 GDP at current prices per inhabitant, Eurostat: [3] Electricity & Gas Prices in Ireland 1st Semester [4] Fuel Cost Comparison Sheets, April SEAI, Dublin. [5] Renewable Energy in Ireland, 2010 Update, SEAI, Dublin. [6] Heat Pump Association of Ireland, Focus reports on selected European markets Ireland 83

86 European Heat Pump Statistics OUTLOOK ITALY Key facts Population Area km 2 GDP/capita [1] Capital Rome Number of individual houses (2009) [2] Number of flats in multi-dwelling buildings (2009) [2] Number of new construction (houses + flats) 2009 [3] Average heat demand single/two family house (2009) (140 W/m 2 x 200 m 2 x 1000 h) 29 MW Share of RES in final consumption of energy ,8 % Binding target for the use of renewable sources by % National emission factor (CO 2/kWh electricity) 2009 [4] 375 g Table : Electricity mix for Italy [5] Gross electricity generation Fuel TWh Share TWh Share Gas 178,22 55,8 % 150,94 51,6 % Petroleum products 31,46 9,9 % 25,95 8,9 % Solid fuels 43,07 13,5 % 39,75 13,6 % Nuclear 0,00 0,0 % 0,00 0,0 % Renewables 58,16 18,2 % 69,33 23,7 % Others 8,22 2,6 % 6,67 2,3 % Total 319, % 292, % Table : Electricity price in Italy Energy prices Average and consumer prices including distribution and taxes: Electricity (households) 0,297 Euro/kWh Present market situation The stagnation, which has affected Italian industry for the last two years, would appear to be coming to an end, with clear signs of recovery in recent times showed the first signs of a recovery in the Italian economy. The sale of heat pump systems has remained more or less stable year on year with certain types of systems showing a moderate increase. That said, the intense speculative pressure on the Italian economy during 2011 has continued to have a negative impact on the economy and on hopes for a recovery in the short term. The sale of heat pump technology for use as the primary source of heating in residential buildings (with or without the support of a solar thermal system) has exhibited a steady but modest increase over time. However, the majority of residential dwellings are still equipped with small gas boilers for single family homes or central heating systems in large buildings. More than 95 % of air/air split systems (3 30 kw thermal capacity) are reversible heat pumps; however, in the majority of cases, the heating mode is only used as part of an additional central heating system. The use of air/air heat pumps as the single heating and cooling source is more frequent in the south of the country. The use of sanitary hot water heat pumps and exhaust air heat pumps is 84 Focus reports on selected European markets Italy

87 remaining negligible. Ground source heat pump applications are expanding, but the cost of such systems is still very high and the return of investment period is perceived as being too long to be affordable by many private consumers. For the tertiary sector (public and private large buildings) the use of heat pumps for primary heating is very common and is an increasing trend, both for air and water sources. The data included in this report for air/air heat pumps (split and multi split) are based on the official Report of CRESME 2009 (Centro Ricerche Economiche Sociali di Mercato perl'edilizia e il Territorio Research centre for economic, social and market in building on the territory). The report makes the following statements:, Air/air heat pumps used as part of a hybrid system (heat pump and gas boiler) account for 23,4 % of total installations., Air/air heat pumps used as the primary device for heating is 9,5 % of the total. Market trends Heat pump /2010 type evolution Air/water ,6 % Water/water Brine/water Reversible ,2 % Air/air ,3 % Air/water ,2 % Brine/water ,4 % VRF ,7 % Total ,3 % Table : Sales of heat pumps in Italy Rev. Reversible Air/air Air/water Brine/water Air/water Water/water Brine/water Figure : Italian heat pump market, , by type of heat pump. The majority of heat pumps sold in Italy are reversible. The sales figures in 2010 show signs of a slight improvement over 2009 for both the sub 20 kw and above 20 kw market segments (see figures and ). The Italian climate lends itself well to obtaining impressive efficiencies with air source heat pumps even in winter. The average primary energy and CO 2 reductions compared to condensing gas boilers is of the order of 50%. An important factor negatively affecting market development for heat pumps is the high cost of electricity. The price for electricity in Italy is much higher than the European average. A welcome development is the planned introduction of separate metering of heat pumps and regular appliances. Utilities are currently Focus reports on selected European markets Italy 85

88 European Heat Pump Statistics OUTLOOK 2011 implementing such systems and this will enable lower charges for heat pump power consumption. Co.Aer s HP Group is intensely campaigning for these measures as well as promoting the replacement of gas boilers by heat pumps. The impact to date of these activities in the market is still limited, as several policy stumbling blocks remain to be overcome. Once achieved, a modest growth in the market is expected for the next year. In any case, the interest in heat pump technology is increasing due to the inherent reduction of primary energy demand and consequent improvement in building energy classifications. Brand names Aermec, Blue Box, Carrier, Climaveneta, Clivet, Daikin, De Longhi, Ferroli, Mitsubishi, Riello, Rhoss, Robur, Sanyo, Viessmann, Vortice. Distribution channels Retail chains and distributor/installer enterprises are specifically dedicated to the sales of residential and light commercial heat pumps namely single and multiple split systems. As already mentioned, those sales are mainly addressing summer air conditioning applications. Larger heat pumps follow the traditional channel: direct manufacturer promotion, consulting companies specifications, contractors bids. National industry association Co.Aer (Costruttori Aeraulici) is the national association of air treatment equipment manufacturers. The association is federated in Anima, the federation of miscellaneous mechanical manufacturers. Within Co.Aer a special group of manufacturers has established Gruppo Italiano Pompe di Calore for the promotion of heat pump technology and developments for the user. This group, consisting mainly of manufacturers, is very active in the preparation and diffusion of heat pump information, organising exhibitions and seminars etc. A specific Commission of the Group is currently engaged with the area of training courses. Training and certification In Italy, Co.Aer is attempting to organize a national Eucert certification body. The Italian energy agency ENEA already participated in the EU funded QualiCert Project and is now working with Co.Aer to implement a certification program for heat pump installers in Italy, as required by the RES Directive. It is expected that before the end of 2011 the first Co.Aer EUCERT course will have taken place. Sources [1] 2010 GDP at current prices per inhabitant, Eurostat: [2] CRESME. [3] EUROCOSTRUCTION market trends to [4] ABB energy efficiency 2011 report. [5] EU energy observatory: publications/statistics/ statistics_en.htm Table : Requirements for subsidies in Italy 2009 and Incentive schemes Running until 31 December 2011, the Italian Government has a tax incentive program by which 55 % of the total cost (equipment and installation) of high efficiency heat pumps is eligible for tax deduction in equal instalments over a tenyear period. Heat pumps must comply with the following COP and EER to qualify: Electric heat pumps Gas heat pumps Heat pumps COP EER COP air/air 3,9 3,4 1,46 air/water < 35 kwth 4,1 3,8 1,38 air/water > 35 kwth 3,8 3,2 brine/air 4,3 4,4 1,59 brine/water 4,3 4,4 1,47 water/air 4,7 4,4 1,6 water/water 5,1 5,1 1,56 86 Focus reports on selected European markets Italy

89 6.11 LITHUANIA Key facts Population Area km 2 GDP/capita [1] Capital Vilnius Number of single/two-family houses Rate of new construction single/two family houses Average heat demand single/two family house MWh/year Share of RES in final consumption of energy % Binding target for the use of renewable sources by % National emission factor (CO 2/kWh electricity) g Gross electricity generation Fuel TWh Share TWh Share Gas 2,03 14,6 % 2,10 13,7 % Petroleum products 0,57 4,1 % 0,74 4,8 % Solid fuels 0,00 0,0 % 0,00 0,0 % Nuclear 9,89 71,1 % 10,85 70,6 % Renewables 0,60 4,3 % 0,68 4,4 % Others 0,82 5,9 % 0,99 6,4 % Total 13, % 15, % Table : Electricity mix for Lithuania [2] Energy prices Average end consumer prices including distribution and taxes during 2009 and 2010: Electricity 0,121 Euro/kWh 0,1201 Euro/kWh Heating oil 0,085 Euro/kWh 0,08 Euro/kWh Pellets 0,053 Euro/kWh 0,05 Euro/kWh District heating 0,0668 Euro/kWh 0,063 Euro/kWh Table : Energy prices in Lithuania Present market situation The market for heat pumps in Lithuania is closely linked to the construction sector showed a decline in construction activity and this was reflected in heat pump sales, with market volumes on a par with 2009 figures. In general, heat pumps are increasing in popularity in Lithuania, however it often comes down to economics and financing where people are in a position to finance investments, they are increasingly considering heat pumps as an alternative to gas, and solid or liquid fuel. Heat pump type Evolution Air/water ,2 % Water/water ,5 % Brine/water ,8 % Direct expansion/water ,0 % Total ,7 % Table : Sales of heat pumps in Lithuania Focus reports on selected European markets Lithuania 87

90 European Heat Pump Statistics OUTLOOK 2011 Market trends The future direction of the market and trends are quite unpredictable. If the proposed renewable energy law is enacted, the market will be given a substantial boost but from 2012 onwards. The uncertainty means that 2011 will most probably remain flat as many consumers defer purchase decisions pending clarity regarding the enactment of this law. A more favorable credit policy from the banks will also ease the situation and provide the market with some impetus. Figure shows the percentage sales volumes in 2009 and 2010 broken down according to heat pump type ,5% 31,1% 400 Air/water Water/water Direct expansion/water Brine/water % 65,8% Figure : Lithuanian heat pump market, , by type of heat pump Air/air heat pumps are increasingly used not only for cooling, but also for heating purposes. These types of systems are becoming more and more popular in buildings where there is little or no hot water demand, for example in small offices. Air/water heat pumps are popular in the Baltic Sea region, where the average outdoor air temperature during the heating season is not very low. They are typically deployed in situations with space limitations not allowing for the installation of a ground collector. Summerhouses are one example. They are also cheaper to install than ground source equivalents. In the case of systems that also offer sanitary hot water preparation in addition to heating, ground source heat pumps are the most popular systems in Lithuania. Horizontal ground collectors also dominate compared with vertical indirect systems, primarily based on their cost advantage, which is in the order of 50 %. Table : Typical end consumer prices for turnkey solutions in Lithuania in Costs The following table outlines the complete installation cost for ground and air source heat pumps (including the heat pump, auxiliary equipment, material and labour costs for installation in an average family house with heat losses around 10 kw): Air/water Ground source Euro Focus reports on selected European markets Lithuania

91 Brand names Some of the most significant brand names existing in Lithuania s market are listed below Ground source heat pumps: Aermec, Alpha InnoTec, Buderus, CTC, Dimplex, ECOLogic, IVT, Lampoassa, Junkers, Nibe, Ochsner, Stiebel Eltron, SVEO, Thermia, Vaillant, Viessmann, Waterkotte. Air/water heat pumps: Aermec, Airpac, Alpha InnoTec, Buderus, CTC, Daikin, Dimplex, ECOLogic, IVT, Junkers, Mitsubishi, Nibe, Ochsner, Octopus, Sanyo, Stiebel Eltron, SVEO, Thermia, Viessmann, LG, Pionnier, Atlantic. Air/air heat pumps: Atlantic, Carrier, Daikin, Fujitsu, Haier, IVT, LG, Midea, Mitsubishi, Panasonic, Sharp, Sanyo, Toshiba. Exhaust air heat pumps: IVT, NIBE. Distribution channels Similar to many other countries, the key distribution channels are:, by manufacturers to installers,, direct sales via wholesalers,, by web-stores. National industry associations The Lithuanian Heat Pump Association (Lietuvos ilumos siurbli asociacija), formed in 2009, consists of manufacturers and importers of heat pumps, also installers and other companies with expressed interest in the heat pump industry. Incentive schemes The Renewable energy law is currently under discussion and expected to be passed in Sources [1] 2010 GDP at current prices per inhabitant, Eurostat: [2] EU energy observatory: publications/statistics/ statistics_en.htm Focus reports on selected European markets Lithuania 89

92 European Heat Pump Statistics OUTLOOK THE NETHERLANDS Key facts [1] Population Area km 2 GDP/capita [2] Capital Amsterdam Number of single/two family houses Number of dwellings in multi-dwelling buildings [3] Number of non-residential buildings [4] Rate of new construction of single/two family houses [5] 0,6 % Share of RES in final consumption of energy 3,8 % Binding target for the use of renewables 14 % National emission factor (CO 2/kWh electricity) g Table : Electricity mix for the Netherlands [6] Gross electricity generation Fuel TWh Share TWh Share Gas 66,80 62,1 % 71,03 62,6 % Petroleum products 2,07 1,9 % 1,49 1,3 % Solid fuels 23,47 21,8 % 24,28 21,4 % Nuclear 4,17 3,9 % 4,23 3,7 % Renewables 9,53 8,9 % 10,84 9,6 % Others 1,61 1,5 % 1,63 1,4 % Total 107, % 113, % Table : Energy prices in the Netherlands Energy prices Average end-consumer prices including all taxes: Electricity [7] 0,17 Euro/kWh Gas [7] 0,081 Euro/kWh Pellets (bulk delivery) [8] 0,034 Euro/kWh Pellets (sack delivery) [8] 0,038 Euro/kWh District heating 0,09 Euro/kWh Individual gas fired central heating is predominant in the Netherlands. The following table gives an overview of the housing stock and heating systems applied therein. Table : Housing park by type of heating product, Type of heating Number Share (%) District heating (>600 kw) ,00 Collective heating ( kw) ,30 Individual central heating gas ,22 Individual central heating oil ,10 Individual central heating solid fuel ,30 Individual central heating others ,40 Total individual central heating ,01 Room heating ,69 Total New dwellings ,02 90 Focus reports on selected European markets The Netherlands

93 Present market situation Data related to installed heat pumps is available up to and including 2010[1]. In Table , the development of the total number of heat pumps installed in the time period (all types and sectors) is illustrated, including their impact on fossil fuel consumption and CO 2 -emission reduction. Year Added Added Installed Installed Displaced CO 2 emissions number capacity number capacity fossil fuel use avoided [-] [MW] [-] [MW] [TJ] [kton] Table : Heat pump installations in the Netherlands, [1] Figure : Dutch heat pump market development [1] Table shows a breakdown by market segment, heat pump type, and heat source for the period The types of heat pumps are defined as follows: Standard: Combi: Heat pump boilers: Reversible: Electric heat pumps, water/water or brine/water, for domestic heating. Electric heat pumps, water/water or brine/water, for domestic heating and sanitary hot water. Electric heat pumps, using exhaust (ventilation) air as a heat source for sanitary hot water only. Electric air conditioners that in winter are used as heat pumps. Focus reports on selected European markets The Netherlands 91

94 European Heat Pump Statistics OUTLOOK 2011 Added number of installations Added capacity [MW] Sector and type Utility buildings Standard and combi Heat pump boilers Reversible Sub total Residential Standard and combi Heat pump boilers Reversible Sub total Total Residential & Utility Heat source (estimation) Water Soil Air Total Table : Development of heat pump sales and capacity, [1] Sanitary hot water Reversible Exhaust air Heating only Air/water Water/water Brine/water Figure : Netherlands heat pump market, , by type of heat pump Market trends The heat pump market did not show positive development during 2010 (similar to other sustainable energy technologies) in the Netherlands. The market growth trends of previous years (see Table ) did not continue. The principal reason was the ongoing economic crisis and this was compounded by the unfolding unfavourable policy environment began with a subsidy available for domestic heat pumps, however, the available funds were exhausted within a short period of time. Since June 2010, the Netherlands has had a new Government, which introduced a program of budget cuts totalling some Euro 18 billion. It has impacted negatively on the introduction of renewable energy systems in general, and the targets that originally were even partially higher than agreed within the EU, have in the meantime been reset to the minimum levels allowed by the EU. 92 Focus reports on selected European markets The Netherlands

95 In accordance with the EPBD, a new Dutch standard has been developed (NEN 7120) for calculating the energy performance of buildings. It covers both the energetic quality of the building structure and the energy system in the building. For various renewable energy technologies, methods are included to calculate the yearly average values of energy performance and share in heating and cooling supply. The standard covers both existing and new built dwellings, both for the residential and commercial sectors. The text of the Standard was published in April An important focus for the DHPA (see below) is the renovation segment, reflecting national and EU requirements to address the energy efficiency of the existing housing stock. Air/water heat pumps are likely to play an important role in this market in the near future, in particular exhaust air heat pumps which utilise internal as well as outside air as a heat source. Higher temperature air as the heat source in combination with improved insulation and heat distribution systems (lower supply temperatures) is expected to result in ongoing improvements in COP values at relatively low costs of investment. In 2010 the DHPA, together with energy companies (both producers and grid owners), launched an initiative to develop favourable energy tariffs for heat pumps in exchange for consumer flexibility enabling load optimisation. This involves the heat pump owner allowing the energy companies to shut down the heat pump system for a limited number of hours per day. In Germany, such a system has already worked successfully for a number of years. Costs Prices of heat pump systems (including installation, excluding VAT): Air/water Ground source (vertical) Sanitary hot water Euro From From Table : Typical investment cost for heat pumps. Heat pump related associations In the Netherlands, three associations are active in the field of heat pumps: 1. The Dutch Heat Pump Association (DHPA), 2. Smart Cooling Foundation (SCF), 3. Association of Suppliers of Air Conditioning Equipment (VERAC). 1. DHPA covers heat pump applications in the domestic market. In the new build segment, the most popular heat pumps are brine/water (ground coupled) and water/water. In most cases these heat pumps are monovalent, sometimes with an electric back-up heating system. Additionally, sanitary hot water heat pumps, which utilise exhaust air, are quite popular in new houses. The retrofit segment is a new and emerging one in the Netherlands. The most popular heat pump system in this sector tends to be a bivalent electric air/water heat pump coupled with a gas boiler ( air includes both outside air and ventilation (exhaust) air). The auxiliary heating is provided by the (existing) gasfired boiler. These systems are also referred to as hybrids referring to the fact that the bivalent system uses two energy sources: electricity and natural gas. 2. SCF deals with gas fired heat pumps, both absorption and gas engine driven, both for the domestic and utility market. 3. VERAC is primarily focused on air conditioning. As far as AC-equipment is reversible, it is included in heat pump statistics (referred to as reversible in the tables above). Focus reports on selected European markets The Netherlands 93

96 European Heat Pump Statistics OUTLOOK 2011 Sources [1] 2010 data from CBS (Netherlands Central Bureau of Statistics) via Mr. Reinoud Segers. [2] 2010 GDP at current prices per inhabitant, Eurostat: europa.eu [3] Total number of dwellings in 2010: (StatLine). Share of multifamily houses: 27 % (SenterNovem databank Kompas). [4] 2009 data Source: Mobius [5] Strong decline: in 2009, new single family houses have been built; in 2010 only [6] EU energy observatory: publications/statistics/ statistics_en.htm [7] Eurostat: 2010 price for consumers, all taxes included. [8] Pellet Atlas data end 2009 (incl. delivery). Table : Heat pump companies and associations in the Netherlands (2010). The above boundaries are rough indications only, but cover about 80 % of cases. Obviously, suppliers of hybrid systems claim that their systems can also be applied in new built environments, and likewise air/water heat pumps combined with wall-hung boilers may also be installed in existing dwellings. Table shows the members of each of the three associations. Company Brand Member of: DHPA SCF VERAC Airview Airwell + Aklima Misubishi Electric + Atag Atag + Carrier Carrier + + Centercon LG + + Daalderop Daalderop + Daikin Daikin + + Danfoss Danfoss + Doorgeest Wadus + Gafco Altron Haier + Gasengineering Aisin Toyota + Haagtechno Panasonic + Hautec Hautec + Horos Horos + ICE Sanyo + Installect Advies Reduses + Intercool Toshiba + Inventum Inventum + Itho Itho + Johnson Controls York + Kusters THO Gree + Lennox Lennox + NIBE Nibe + Redenko Redenko + Remeha Remeha + SKT Nilan + Stiebel Eltron Stiebel Eltron + Techneco Techneco/Robur + + Thercon General + ThermoNoord Fujitsu + Trane Airconditioning Trane + Vaillant/AWB BV Vaillant-AWB + Verhulst Klimaattechniek BV Carrier + Western BV Western + 94 Focus reports on selected European markets The Netherlands

97 6.13 NORWAY Key facts [1] Population Area km 2 GDP/capita [1] Capital Oslo Number of single/two family houses Rate of new construction/year Average heat demand single/two family house MW/year Share of RES in final consumption of energy 58,5 % Expected share of renewables sources by % National emission factor (CO 2/kWh electricity) g Gross electricity generation 2009 Type TWh Share Water power stations 126,08 95,7 % Thermal power stations 4,72 3,6 % Wind power stations 0,98 0,7 % Total 131, % Table : Electricity mix for Norway Energy prices Average end-consumer prices including distribution and taxes during 2009: Electricity 0,065 Euro/kWh Gas 0,032 Euro/kWh Pellets 0,032 Euro/kWh District heating 0,065 Euro/kWh Table : Energy prices in Norway Present market situation Similar to many other European countries, the heat pump market in Norway developed following the first oil crisis of the 1970s. The 1980s then saw a government-funded program to support the more widespread introduction and adoption of the technology. The main emphasis at that time was on commercial and industrial heat pumps, many of which are still in operation today. During the past ten years, heat pumps have also established themselves in the domestic sector, with over half a million installations in total. The coming years are expected to see growth in the commercial sector in parallel with a strong domestic sector market. Heat pump type Air/water Brine/water Exhaust air/water Air/air (reversible) Total Table : Sales of heat pumps in Norway Focus reports on selected European markets Norway 95

98 European Heat Pump Statistics OUTLOOK Figure : Norwegian heat pump market development Residential sector Norway has traditionally had very low electricity prices, due to strong regulation and production based almost entirely on hydro power. The electricity market was deregulated in 1991, with supply gradually becoming more constrained due to higher demand without new production capacity. The production of hydro power in Norway tends to vary from 90 to 150 TWh per year, depending on weather conditions. Consumption in 2010 was 130 TWh. In years with low production there is generally a sharp rise in prices, especially if there is a cold winter with a high demand for heating. This occurs due to the requirement to import more expensive electricity to make up the shortfall. The most common type of heating in single-family homes in Norway is direct electric heating in combination with a wood stove. As most houses do not have a hydronic heat distribution system, solutions of the air-air variety are the dominant type of heat pump installed in the domestic sector. Over the last number of years, between and air/air heat pumps have been installed each year, and are particularly popular in new houses. Today, 34 % of single-family houses have a heat pump installed, almost all of them having been installed within the last ten years Air/air (reversible) Exhaust air/water Air/water Brine/water Figure : Norwegian heat pump market, , by type of heat pump Focus reports on selected European markets Norway

99 Commercial sector There has been steady growth in the numbers of heat pumps in the commercial sector in Norway in recent years, which is expected to continue based on new building regulations which came into force in July These regulations require all buildings over 500 m 2 to meet at least 60 % of their annual heating demand from renewable sources. In many cases meeting this requirement means a choice between heat pumps or bio-energy systems. Higher levels of insulation means that more buildings now require air conditioning systems, and as heat pumps can deliver both heating and cooling they are very well placed to provide a competitive solution. Heat pumps also have an advantage over bio-energy and district heating because the energy labeling system for buildings rewards the most efficient systems. Buildings with a heat pump in combination with a free cooling system, either from water or from boreholes, have the lowest energy consumption and best energy classification. Heat pumps in district heating Heat pumps have gained increased popularity in district heating applications over the last couple of years. One of the plants supplying heat to the Oslo district heating system includes a 27 MW heat pump recovering heat from sewage effluent. A heat pump in Drammen, south of Oslo, delivering 14,3 MW from sea water, is the first heat pump using ammonia as its refrigerant and is capable of delivering heat at over 90 C. A large district heating and cooling system, abstracting heat from sea water, is being built at Fornebu Airport to supply over ten thousand houses and many commercial buildings. A new market for district heating companies in Norway is that of independent energy plants selling heating and cooling to one large building. A new hospital is being supplied with packaged heating and cooling by Fortum Energi, using one of the largest ground-source heat pumps in the world, with more than 300 boreholes. Fortum is also supplying a new mail distribution centre with heating and cooling from a ground-source heat pump. Industrial heat pumps A large number of heat pumps are also used in the fishing, food, and processing industries, many exhibiting very high COPs. The company, Hybrid Energy, has developed a specialized heat pump for the food industry which uses both the compression and the absorption cycle and delivers high temperature water by using ammonia/water as a working fluid. Another Norwegian company, Single Phase Power, has specialised in high-temperature heat pumps for industrial applications, and will be supplying its first commercial installation this year after many prototype installations. Future outlook The future for the heat pump industry looks bright in Norway. Awareness of heat pump technology is increasing, and heat pumps are recognised as a good solution both for the environment and for the consumer. The industry does however have to adapt to the fact that new houses have lower heating demands, and require more cost-effective heating solutions. It also needs to address the need for more education and training at all levels to support the growth of the heat pump market. Focus reports on selected European markets Norway 97

100 European Heat Pump Statistics OUTLOOK 2011 Brand names Some of the most significant brand names in the Norwegian market are listed in alphabetical order below. Ground source - water/water heat pumps: CTC, Glen Dimplex, IVT, NIBE, Thermia, Vaillant, Qvantum. Air/water heat pumps: CTC, Daikin, Glen Dimplex, Fujitsu, IVT, LG, Mitsubishi Electric, NIBE, Panasonic, Sanyo, Qvantum, Thermia, Vaillant. Air/air heat pumps: Daikin, Carrier, Fujitsu, IVT, Toshiba, LG, Mitsubishi Electric, Mitsubishi Heavy Industry, Panasonic, Sanyo. Exhaust air heat pumps: IVT, NIBE, NILAN. Distribution channels Wholesalers and retailers. National industry associations Industry is represented by the Norwegian heat pump association (Norsk Varmepumpeforening or NOVAP), which was established in 1991 by distributors and installers. Today, the Association has two employees and is working with training and education, public information, and the creation of a political framework for the heat pump industry. Sources: [1] Statistics Norway, 2010: [2] 2010 GDP at current prices per inhabitant, Eurostat: [3] NOVAP: figures are based on estimates, reflecting a stable market year on year from [4] IEA, Heat Pump Centre Newsletter, Volume 29 - No. 1/2011. Incentive schemes Subsidies for heat pumps and renewable energy grants are available for most types of heat pumps for various applications, except for air-to-air heat pumps. Grants for commercial applications are subject to some limitations (if the heat pump could be profitable without a subsidy). Private households can receive grants of up to Euro for air-to-water and ground-source heat pumps. Each year, the government provides about Euro million in the form of grants for renewable energy and improving the efficiency of energy use. The Renewables Directive Although not a member of the EU, Norway will implement the Renewables Directive. In 2005, renewable energy sources accounted for 58,2 % of total energy supply, which is higher than any EU country. Norway and the EU are at present negotiating the required renewables share for 2020, but it is expected to be about %. Heat pumps have the ability to contribute significantly to a higher share of renewable energy use in Norway, especially considering the houses which still use fossil fuel based heating systems. 98 Focus reports on selected European markets Norway

101 6.14 POLAND Key facts [1] Population Area km 2 GDP/capita [2] Capital Warsaw Number of single/two-family houses Number of all buildings, houses and apartments Rate of new construction single/two family houses ,5 % Average heat demand single/two family house New houses: Old houses: MWh/year (150 m 2 ) MWh/year (150 m 2 ) Share of RES in final consumption of energy 2008 [3] 7,9 % Binding target for the use of renewable sources by % Generation of electricity 2010 Net supplies of electricity 2010 National emission factor (CO 2/kWh electricity) 33 GW GWh 900 g Energy market and prices Gross electricity generation Fuel TWh Share TWh Share Gas 6,22 4,0 % 6,06 4,0 % Petroleum products 2,73 1,8 % 2,72 1,8 % Solid fuels 138,95 89,5 % 133,42 87,9 % Nuclear 0,00 0,0 % 0,00 0,0 % Renewables 6,61 4,3 % 8,68 5,7 % Others 0,80 0,5 % 0,84 0,6 % Total 155, % 151, % Table : Electricity mix for Poland [3] Average end consumer prices including distribution and taxes: Electricity Gas Coal Heating oil Pellets District heating 0,12 Euro/kWh 0,05 Euro/kWh 0,03 Euro/kWh 0,09 Euro/kWh 0,05 Euro/kWh 0,07 Euro/kWh Table : Energy prices in Poland The energy prices have substantially influenced the structure of primary energy production and consumption over the last number of years in Poland. Electricity generation in Poland is mainly based on coal (94 %). The remaining 6 % is accounted for by hydro power plants (2 GW), mainly in pumped storage facilities. Domestically produced hard coal still dominates but its share in national energy consumption is being reduced with a corresponding decrease in coal production. The result has been an increase in the use of alternative energy sources such as oil, natural gas, LPG and various renewable energy sources (mainly hydro energy and Focus reports on selected European markets Poland 99

102 European Heat Pump Statistics OUTLOOK 2011 biomass). There are no nuclear power plants in operation in Poland. The structure of primary energy consumption is as follows:, Coal (hard coal and lignite): 60 %, Oil: 20 %, Natural Gas: 13 %, RES and other: 7 %. Most of this contribution (around 90 %) can be accounted for by biomass, and about 7 % by hydropower. The strategy targets a share of RES in primary energy of 15 % by The current price of oil is approximately four times higher than four years ago and the price of natural gas is increasing annually at about 20 %. Present market situation The prevailing energy policy currently promotes the use of biomass, wind and solar energy ahead of heat pumps unfortunately. That said, the market for domestic heat pumps in Poland is growing continuously (about 10 15% annually). The current penetration of heat pumps in Polish single family houses is just under 1%. One of the main challenges for the Polish heat pump market is to overcome the barriers set by a lack of recognition and acceptance amongst the general public. The total heat pump sales volume in 2010 exceeded units, excluding sanitary hot water units. The current statistics do not include air/air systems. Of this number, ground source units accounted for approximately units, which, due to the relatively cold climate, are typically the solution of choice. Systems are usually installed in new houses, which have the accompanying land to allow the installation of a ground collector. The last three years has seen a marked increase in interest in air source heat pumps, with sales of systems utilizing outside air in 2010 amounting to about units. At the same time there has been a growing interest in sanitary hot water heat pumps that utilize internal (exhaust) air. In the same year, sales in this category amounted to about units. Sanitary hot water Brine/water Reversible Brine/water 470 Air/water 300 Figure : Polish heat pump market, 2010, by type of heat pump. Exhaust air/air 95 Air/water Water/water 450 Direct expansion/ water 620 Market trends In Poland, systems in the 0 10kW capacity range account for about 43 % of the overall ground source heat pump segment. Theses systems are generally installed in new houses of m 2 size, which account for 80 % of all newly-built houses. This trend has drawn the interest of developers, who see the opportunity of developing homes equipped with devices using energy from renewable energy sources. Heat pumps with a capacity of 12 20kW in 2009 accounted for 39 % in this segment, however in 2010, its share declined to 32 %. In the last year there 100 Focus reports on selected European markets Poland

103 was an increase in demand for large capacity heat pumps; the type typically used for heating multifamily buildings, offices, tourist and recreational, religious and industrial buildings (increasing share from 20 to 25 %). Up until 2007, this type of installation was primarily confined to the retrofit segment. However, in recent years, it has continued to make inroads in new construction as well. Air/water heat pumps, mainly monobloc systems with output under 14 kw, are usually installed in new single-family houses, often located in cities or suburbs, where there is not enough space for a ground collector. In recent years, a number of new players introduced split units to the market and their share in this segment had increased from 16 % to 25 % by the end of also saw a significant increase in sales of sanitary hot water heat pumps. The increase in sales of these units is primarily driven by their low price and simplicity of installation. Sanitary hot water heat pumps compare favorably with solar thermal systems in that they are less expensive, can guarantee year round production of hot water, with the additional option of ventilation. The most popular units are in the litre capacity range (units over 200 litres account for over 60 % of all units sold) Sanitary hot water Air/water Brine/water and water/water Figure : Polish heat pump market development (excluding air/air heat pumps). Costs Table depicts average end consumer prices, including VAT, for turnkey installation in single family houses. The turnkey solutions include everything to fully commission the entire system i.e. the heat pump, auxiliary equipment, material and labour costs. Average cost Air/air Air/water Ground source Ground source (Horizontal) (Vertical) Euro Table : Typical end consumer prices for turnkey solutions in Poland in Air/air heat pumps are predominantly installed in existing houses using direct electric heating, this currently being the most cost-effective solution for this type of house. A recent trend is to install air/air heat pumps in holiday homes / summer cottages, as a complement to direct electric heating. Air/water heat pumps are generally replacing or complementing oil or coal boilers and, for climatic reasons, such replacement is more frequent in the north part of Poland. Ground source heat pumps are dominated by vertical indirect systems (60 %). Horizontal systems are restricted in use due to the significant space requirements and its share is approximately 40 % of the entire volume of ground source heat pump installations. Water/water heat pumps can be used only in specific geological environments, and special permits apply. Focus reports on selected European markets Poland 101

104 European Heat Pump Statistics OUTLOOK 2011 Brand names Some of the most significant brand names present on the Polish market are listed in alphabetical order below. Ground source heat pumps: Alpha InnoTec, Buderus, Danfoss, De Dietrich, Dimplex, Hibernatus, Hoval, IVT, Junkers, Nateo, Ochsner, NIBE, Stiebel-Eltron, Vaillant, Vatra, Viessmann. Air/water heat pumps: Alpha InnoTec, Danfoss, Daikin, Euronom, IVT, Mitsubishi, NIBE, Stiebel-Eltron, Vaillant, Viessmann. Air/air heat pumps: Daikin, IVT, LG, Mitsubishi Exhaust air heat pumps: Buderus, Dimplex, Hewalex, NIBE, Viessmann Distribution channels Dedicated retail networks and wholesalers dominate the heat pump market. Nonetheless, for the last couple of years, air/air heat pumps are offered at construction material stores, mail-order firms and web-stores. National industry associations The Polish Heat Pump Association (Polskie Stowarzyszenie Pomp Ciepła or PSPC) formed in 2002, has approximately 30 members and since 2006 is a member of the European Heat Pump Association. The members comprise scientists, designers, installers. The new association, formed in January 2011, is a Polish organization of Heat Pump Technology Development (Polska Organizacja Rozwoju Technologii Pomp Ciep a or PORT PC). The members are made up of heat pump and component manufacturers, experts, scientists and other companies with an interest in the industry. The association has an access within EHPA and serves as the official voice for scientists and the heat pump industry at national level. Training and certification Currently, training is mainly carried out by manufacturers of heat pumps. PORT PC is planning the introduction of a training program based on Eucert. Incentive schemes The European Union subsidies As Poland is a member of the European Union, Polish traders, institutes, farmers etc. may benefit from subsidies for heat systems based on RES (including heat pump systems). All of the investments should be connected with their trading, economic, enterprise activity. Sources [1] Central Statistical Office Poland: [2] 2010 GDP at current prices per inhabitant, Eurostat: [3] EU energy observatory: publications/statistics/ statistics_en.htm The National Fund for Environmental Protection and Water Management The National Fund has been operating since 1st July 1989 and was established on the basis of an amended Act concerning environmental protection enacted on 27 April It offers loan, subsidy and equity funding, but is limited to heat pump installations exceeding 300 kw. Environmental Protection Bank (Bank Ochrony Środowiska S.A. BOS) The Environmental Protection Bank (BOS) is a universal, commercial bank specializing in financing activities connected with environmental protection and water management. Soft loans are provided for projects with real environmental benefit, including utilization of renewable sources of energy and heat (geothermal, solar, photovoltaic, heat pumps, usage of waste). 102 Focus reports on selected European markets Poland

105 6.15 PORTUGAL Key facts Population Area km 2 GDP/capita [1] Capital Lisbon Number of single/two family houses and dwellings in multi-dwelling buildings Number of non-residential buildings Rate of new construction single/two family houses 56 % Share of RES in final consumption of energy 2008 [2] 23,2 % Binding target for the use of renewable sources by % National emission factor (CO 2/kWh electricity) g Gross electricity generation Fuel TWh Share TWh Share Gas 15,20 33,1 % 14,71 29,3 % Petroleum products 4,15 9,0 % 3,29 6,6 % Solid fuels 11,20 24,4 % 12,90 25,7 % Nuclear 0,00 0,00 % 0,00 0,00 % Renewables 14,64 31,8 % 18,29 36,4 % Others 0,10 0,2 % 0,11 0,2 % Total 45, % 50, % Table : Electricity mix for Portugal [2] Energy prices Average end-consumer prices including distribution and taxes: Electricity 0,17 Euro/kWh Heating oil 0,05 Euro/kWh Natural gas 0,06 Euro/kWh Propane gas 0,05 Euro/kWh Pellets 0,06 Euro/kWh Table : Energy prices in Portugal Present market situation and market trends [3] In general the heat pump market in Portugal has increased steadily over the years. Most of heat pumps installed are typically reversible units, since they are used for both heating and cooling purposes, in almost equal proportion. 97 % of the units installed are of the air/air variety, as it is illustrated in figure Some heat pump categories have only been considered in statistics in recent years (VRF: 2005, water/water: 2007, and geothermal and sanitary hot water: 2009). In some cases, they were included in other categories in previous years. Figure also highlights that 2009 was a particular challenging year for heat pump sales, however this was reversed in Focus reports on selected European markets Portugal 103

106 European Heat Pump Statistics OUTLOOK 2011 Figure : Portuguese heat pump market, , by type of heat pump. [3] Industrial (air source) Sanitary hot water VRF Air/air Reversible Air/water Brine-water / water Table : Sales of heat pumps in Portugal (9,5 % of air/air reversible units and 80 % of VRF units included, reflecting their use as a heating source). Heat pump /2010 type evolution Reversible ,8 % Air/air ,8 % Air/water ,4 % Brine-water / water ,6 % VRF ,8 % Sanitary hot water Industrial (air source) Total ,7 % In the past, the most common application of heat pumps has been in the commercial and public sectors such as offices, hospitals, schools, retail outlets etc. In more recent times however heat pumps are being promoted more intensely for domestic heating and cooling, and this has led to increased deployment in the residential sector. Given the Portuguese climate, the requirement for cooling applications cannot be underestimated, especially in commercial buildings. This presents an opportunity for reversible heat pumps to become the dominant cooling solution in this sector, as they also provide heating functionality at a reasonable cost. Sources [1] 2010 GDP at current prices per inhabitant, Eurostat: [2] EU energy observatory: publications/statistics/ statistics_en.htm [3] Various Portuguese Industry Associations related to the heating and cooling technologies sector, including: IPS-ESTSetúbal (Instituto Politécnico de Setúbal), APIRAC (Associação Portuguesa da Indústria de Refrigeração e Ar Condicionado), as well as DGEG (Direcção Geral de Energia e Geologia). Brand names and distribution channels Many of the principal European heat pump manufacturers have established a presence in the Portuguese market in recent years, the market however being quite fragmented without any one dominant player. Their principal routes to market are through distributors and installers, with only a very small percentage of sales though direct channels, online, webstores and specialized outlets, etc. Incentive schemes and heat pump related legislation Concerning heat pumps for space heating and cooling, there are no benefits or incentives at national level. However, some discussions are currently underway, which may change this situation by recognizing and rewarding the renewable energy contribution of heat pump technology (this is currently the case for sanitary hot water heat pumps). 104 Focus reports on selected European markets Portugal

107 6.16 SLOVAKIA Key facts Population Area km 2 GDP/capita [1] Capital Bratislava Number of single/two-family houses Number of dwellings in multi-dwelling buildings Number of non-residential buildings Rate of new construction of single/two family houses Average heat demand single/two family house (2009) MWh/year Share of RES in final consumption of energy ,4 % Binding target for the use of renewable sources by % National emission factor (CO 2/kWh electricity) g Gross electricity generation Fuel TWh Share TWh Share Gas 2,08 7,2 % 2,39 9,1 % Petroleum products 0,68 2,3 % 0,63 2,4 % Solid fuels 4,67 16,1 % 3,86 14,8 % Nuclear 16,70 57,7 % 14,08 53,8 % Renewables 4,56 15,7 % 4,91 18,8 % Others 0,27 0,9 % 0,29 1,1 % Total 28, % 26, % Table : Electricity mix for Slovakia [2] Energy prices Average end consumer prices including distribution and taxes: Electricity Gas Pellets District heating 0,07 Euro/kWh 0,05 Euro/kWh 0,045 Euro/kWh 0,06 Euro/kWh Table : Energy prices in Slovakia [3] Present market situation The market for domestic heat pumps in Slovakia is quite limited primarily due to the existence of a dense gas network. The technology is however slowly reaching a level of recognition and acceptance amongst the general public. Heat pumps present an interesting alternative in the new build sector, but are less attractive in the retrofit segment. As with many other markets, the general economic downturn adversely affected the rate of new construction in the building sector in recent times, and so the Slovak heat pump market stagnated in It did however grow from this position in Currently, sales are not stimulated by any form of subsidy scheme. The current challenge for the Slovak heat pump market is to overcome the barriers set by the economic situation and a general resistance against any changes in heating systems. Focus reports on selected European markets Slovakia 105

108 European Heat Pump Statistics OUTLOOK 2011 Market trends The overall trend that can be observed is that sales of all types of heat pumps are continuing to grow. It is reasonable to forecast a growing share of air/water, water/water, and brine/water systems in the new construction sector, based on favorable climatic conditions in many locations in Slovakia Figure : Slovakian heat pump market development Table : Sales of heat pumps in Slovakia Heat pump type Evolution Air/water ,7 % Water/water ,0 % Brine/water ,1 % Exhaust air ,7 % Reversible ,7 % Air/water ,0 % VRF ,0 % Others % Total % Others VRF Reversible Air/water Exhaust air Air/water Water/water Brine/water 9% 5,4% 11,6% 4,8% 44,2% Figure : Slovakian heat pump market, , by type of heat pump ,6% 10,5% 9% 25,6% 25,2% Focus reports on selected European markets Slovakia

109 Air/water heat pumps are installed in new houses with limited space and are generally replacing or complementing electric or gas boilers. The ground source segment is completely dominated by horizontal indirect systems. Vertical systems do exist but are restricted in use due to the significant higher cost demands and legislation requirements. It is expected that skewed vertical systems for drilling up to 30 m will become more successful. Water/water heat pump systems are more successful in environments where a combination with air-conditioning systems is required. Costs Air/water Brine/water Euro Table : Typical end consumer prices for turnkey solutions in Slovakia. Average end consumer prices, including VAT, for a turnkey installation in single family houses are in the range of Euro depending on the type and capacity of the heat pump. The turnkey solutions include everything to fully commission the installation i.e. the heat pump, auxiliary equipment, material and labour costs. Brand names Domestic producers of heat pumps Fiving s.r.o. Liptovský Mikuláš, Wamak s.r.o. Banská Štiavnica Some of the most significant brand names existing on the Slovak market are listed in alphabetical order below. Ground source heat pumps: Dimplex, IVT, NIBE, Stiebel Eltron, Wamak, Viessmann. Water/water heat pumps: Dimplex, IVT, Jares, Mach, Stiebel Eltron, Viessmann, Wamak. Air/water heat pumps: Carrier, Daikin, Dimplex, Fiving, IVT, Mach, NIBE, PZP, Viessmann, Wamak. Exhaust air heat pumps: Fiving. Distribution channels Dedicated retail networks and wholesalers dominate the heat pump market. Nonetheless, for the last couple of years, air/air heat pumps have been offered by construction material stores, mail-order firms and web-stores. Industry infrastructure There are four small manufactures, more than ten distributors of heat pumps and more than fifty certified heat pump installers in Slovakia. National industry associations The Slovak Association for Cooling and Air-conditioning Technology (Slovenský zväz pre chladiacu a klimatizačnú techniku or SZ CHKT), formed in 1993, has approximately 650 members. The members consist of manufacturers and importers, installers, and other companies with an interest in the RAC and heat pump industry. The association serves as the official voice for the heat pump industry at national level together with the Slovak Technical University in Bratislava. Training and certification of installers and companies Training according to the European Certified Heat Pump Installer scheme is already in place comprising the electronic certification of companies via the web. Incentive schemes Currently there is no incentive scheme for heat pump installations in Slovakia. Sources [1] 2010 GDP at current prices per inhabitant, Eurostat: [2] EU energy observatory: publications/statistics/ statistics_en.htm [3] data from SZ CHKT. Focus reports on selected European markets Slovakia 107

110 European Heat Pump Statistics OUTLOOK SPAIN Key facts Population Area km 2 GDP/capita [1] Capital Madrid Number of single/two family houses Number of dwellings in multi-dwelling buildings Share of RES in final consumption of energy % Binding target for the use of renewable sources by % National emission factor (CO 2/kWh electricity) g Table : Electricity mix for Spain [2] Gross electricity generation Fuel TWh Share TWh Share Gas 122,06 38,9 % 108,46 36,9 % Petroleum products 18,00 5,7 % 18,97 6,5 % Solid fuels 48,71 15,5 % 36,16 12,3 % Nuclear 58,97 18,8 % 52,76 18,0 % Renewables 62,31 19,9 % 73,57 25,0 % Others 3,71 1,2 % 3,93 1,3 % Total 313, % 293, % Table : Energy prices in Spain Energy prices Average end-consumer prices including distribution and taxes: Electricity 0,138 Euro/kWh Gas 0,0847 Euro/kWh Present market situation The Spanish market in 2010 for compressor driven machines, chillers and reversible units, showed an increase for the first time since The following table shows 2009 and 2010 total market values in millions of Euros. Table : Spanish heat pump market value (Euro millions) Type /09 Tertiary / Industrial 166,7 182,05-8,43% Commercial 278,6 264,75 5,23% Residential / Domestic 405,61 368,07 10,2% The percentage of reversible units sold into the residential/domestic sector is well over 95 % whilst in the commercial sector this figure is approximately 75 % (up to 100 kw). For capacity ranges from 100 up to 700 kw, the percentage declines to about 50 %. In the commercial sector, heat pumps are the primary source for heating, whilst residential/domestic dwellings are generally equipped with small gas boilers for single family homes, and central heating systems for larger buildings. The use of air/air reversible heat pumps for heating applications is still quite limited. In the South and part of the Mediterranean coast however, air/air heat pumps are used extensively as the primary source of heating and cooling, often combined with electric heaters. 108 Focus reports on selected European markets Spain

111 Ground source heat pump applications are expanding, however the cost is still very high and the return of investment period is too long to be afforded by ordinary consumers. Air/water (reversible) VRF Air/air (reversible) Figure : Spanish heat pump market, 2010, by type of reversible heat pump. Brand names Airlan, Airwell, Carrier, Ciat, Clivet España, Daikin, Daitsu, Eurofred, Fagor, Férroli, Frigicoll, Haier, Hitachi, Hitecsa, Hiyasu, Johnson Controls, Lennox Refac, LG, Lumelco, Mcquay, Mitsubishi Electric, Olimpia, Panasonic, Samsung, Saunier Duval, Schako, Sedical, Sharp, Tecnivel, Tecnosakura, Termoven, Top Clima, Toshiba, Trane Aire Acondicionado. Distribution channels Residential and domestic: 28 % of the market is covered by installers, 42 % by distributors and 30 % by commercial centers, department stores, specialized shops, etc. Commercial and tertiary: Mainly through installers. Industry infrastructure Ciat, Fagor, Férroli, Hitachi, Hitecsa, Johnson Controls, Lennox Refac, Tecnivel and Termoven among others have manufacturing facilities, of different sizes and types of production in Spain. Some other well known companies like: Airwell, Carrier, Daikin, Haier,LG, Mitsubishi, Samsung, Sharp, Toshiba, etc. are directly involved in the Spanish market with their own commercial infrastructure and sales team. National industry association AFEC, Air Conditioning Equipment Manufacturers Association of Spain, is a nonfor-profit association, constituted in the year 1977, to represent and defend the professional interests of the manufacturers of the air conditioning sector. Incentive schemes and heat pump related legislation There are some incentives schemes in the planning phase to assist in the promotion of ground source heat pumps. So far, nothing is foreseen at national level for air source heat pumps. Several regional governments have launched the so called Planes Renove to promote the substitution of old and inefficient air conditioners by new A Rated units (labelled in accordance with requirements of Directive 2002/31/EC with regard to energy labelling of household air- conditioners). These programs take the form of subsidies at the time of purchase, in the range of Euro per unit. Sources [1] 2010 GDP at current prices per inhabitant, Eurostat: [2] EU energy observatory: publications/statistics/ statistics_en.htm Focus reports on selected European markets Spain 109

112 European Heat Pump Statistics OUTLOOK SWEDEN Key facts Population Area km 2 GDP/capita [1] Capital Stockholm Number of single/two-family houses Number of dwellings in multi-dwelling buildings Number of non residential buildings Rate of new construction single/two family houses Average heat demand single/two family house MWh/year Share of RES in final consumption of energy 2008 [2] 44,4 % Binding target for the use of renewable sources by % National emission factor (CO 2/kWh electricity) 17,8 g Table : Electricity mix for Sweden Gross electricity generation Fuel TWh Share TWh Share Hydro 65,30 48,8% 66,20 45,7% Wind 2,50 1,9% 3,50 2,4% Nuclear 50,00 37,4% 55,60 38,3% CHP 15,90 11,9% 19,70 13,6% Total 133,70 100% 145,00 100% Imports 4,70 2,10 Energy prices Average end consumer prices including distribution and taxes: Table : Energy prices in Sweden Electricity 0,138 Euro/kWh 0,163 Euro/kWh Heating oil* 0,105 Euro/kWh 0,129 Euro/kWh Pellets* (sack delivery) 0,063 Euro/kWh 0,073 Euro/kWh Pellets* (bulk delivery) 0,055 Euro/kWh 0,065 Euro/kWh District heating (multi-family building) 0,076 Euro/kWh 0,083 Euro/kWh District heating (single-family building) 0,081 Euro/kWh 0,088 Euro/kWh *Distribution included if delivery exceeds a specified quantity Energy price ratios Whilst analysing the market opportunities for electric heat pumps in a specific country, one of the first things to look at are the existing energy price ratios i.e. the ratio between the price of electricity and the price of 1 kwh heating produced by the competing technologies. The energy price ratio corresponds to the seasonal performance factor that has to be overcome in order to result in lower heating costs for the heat pump system. Given below are the relevant energy price ratios for Sweden. As an assumption for the calculations below the annual performance of the oil and pellet systems are set to 85 % and 100 % for district heating. 110 Focus reports on selected European markets Sweden

113 Electricity/Oil 1,1 Electricity/Pellets (sack delivery) 1,9 Electricity/Pellets (bulk delivery) 2,1 Electricity/District heating (multi-family building) 2,0 Electricity/District heating (single-family building) 1,9 Table : Energy price ratio in Sweden. Present market situation The market for domestic heat pumps in Sweden is mature, the technology having reached full recognition and acceptance amongst the general public over many years. Heat pumps are now the preferred choice in new construction as well as for retrofitting the existing building stock. As a consequence of the high sales figures during the last decade, heat pumps are now in use in more than 50 % of Swedish single family homes. The market is now focused on sales to the late majority and laggards. Whilst sales in the market segment for single family houses are levelling out, the interest in heat pumps for multifamily homes and commercial buildings is on the increase. The well-known retailer IKEA has adopted a strong renewable energy policy, which has resulted in several large heat pump projects around the world. IKEA and other large real estate owners are pioneers and serve as door openers for heat pumps in this developing market segment. An increasing number of real estate owners have recognised the economic benefits and are in some cases abandoning other heating systems such as district heating in favour of heat pumps. The present slowdown in the single family house segment is somewhat offset by a growing market for replacement of older heat pumps, and assisted by a recently introduced subsidy scheme for renovation and extension works in private homes. The real competitors to heat pumps are district heating and wood pellets, district heating being the strongest of these competitors. District heating dominates the segment for multi-family dwellings and commercial buildings in densely populated areas. District heating companies, who to a large extent are owned by municipalities, sometimes attempt to put barriers in place regarding the use of heat pumps. As district heating companies are in possession of the production facilities as well as the distribution grid, they tend to hold monopoly positions at a local level. For this reason consumers generally tend to be placed in a weak position in negotiations with district heating companies. This has led to calls for third party access to the grid to encourage competition. Combined with high price increases for district heating in recent years, this has created a window of opportunity for heat pumps with increasing numbers of real estate owners favouring heat pumps above district heating schemes. However, as a counter balance, the prevailing energy policy is promoting the use of biomass and trying to limit the use of electricity for heating. This has impacted strongly on decision makers and energy advisers, who tend to promote biomass-based district heating and pellet systems rather than heat pumps. The market for pellet burners, typically replacing the oil burner in an existing boiler, dropped by more than 80 % since it peaked in The reason behind the 2006 peak was the promotion of and accompanying subsidy scheme for replacing oil heating at that time. Since then, the subsidy scheme has ended and the price of pellets have increased. In many cases, the installations have failed to meet expectations, mainly due to malfunctioning or underperforming systems. An increasing number of these pellet systems that were installed in recent years are now being replaced by heat pumps. According to a survey of the members of the Swedish Heat Pump Association, SVEP, 6 % of all heat pump installations made in 2009 were replacement systems for pellet systems. The two tables below illustrate the type of buildings, in which all heat pumps sold in 2009 were installed, and the type of heating system they replaced or complemented. Focus reports on selected European markets Sweden 111

114 European Heat Pump Statistics OUTLOOK 2011 Table (left): Heat pump installation by type of building. [3] Table (right): Type of building replaced by heat pump installation. [3] The market is completely dominated by retrofit installations in single family houses and cottages. Less than 5 % of all heat pumps sold in 2009 were installed in new buildings. Type of building Share Heating system Share Single family houses 77 % Direct electricity 21 % Cottages 15 % Electric boilers 21 % Churches 0,4 % Oil boilers 26 % Multifamily houses 3 % District heating 2 % Commercial premises 3 % Firewood 9 % Other 2 % Pellets 6 % Old heat pump 7 % New construction* 4 % Gas boiler 2 % Other 2 % * New Construction reflects the number of heat pumps installed in new construction, i.e. the heat pump did not replace any other system. Table : Sales of heat pumps in Sweden Market trends Historically heat pump sales have been characterised by high sales during the autumn months and significantly lower sales during the rest of the year. This pattern was less pronounced during the years of continuous strong sales growth however. As the market is now clearly beyond its peak, the traditional sales pattern is returning. Sales during the beginning of 2009 were slightly better than the beginning of 2008, but still quite modest. It was obvious that consumers were awaiting the more favourable conditions expected under the rework of the existing retrofit subsidy scheme, which was introduced in July of that year. The new application of the subsidy scheme made it possible for home owners to claim a tax reduction of 50% of the labour costs, up to a maximum of Euro per owner, directly at the point of purchase. The new application of the subsidy scheme was very well received by the general public and served as a strong boost for the heat pump market. The total sales of heat pump units increased by 9 % during 2010 in comparison to In the autumn of 2010, the one millionth heat pump was installed in Sweden. Heat pump /2010 type evolution Air/water ,7 % Brine/water ,0 % Exhaust air/water ,8 % Air/air (reversible) ,7 % Total ,1 % During 2010 the sales of brine/water systems grew by 16 %, whereas exhaust air heat pumps dropped by 17 % and air/water heat pumps dropped by 18 %. One of the major reasons for the downturn in the sales of air/water heat pumps was the subsidy scheme, which is based on labour costs, and serves in favour of the more labour intensive brine/water installations. As a result of the long history of heat pumps usage in Sweden, there is now a substantial replacement market for older heat pumps. Given the results of the survey, 7 % of all heat pumps sold during 2009 were replacing old heat pumps. This replacement market for heat pumps is expected to grow in the coming years. 112 Focus reports on selected European markets Sweden

115 As the general knowledge of heat pump technology has reached a high level in Sweden, customers have become much more aware of options and choices available to them. Features such as remote control, capacity control and online connections through the internet are gaining interest. Significant for Sweden is that the availability of gas is very limited, thus gas boilers have a negligible market share in the heating sector. As Sweden has historically benefitted from relatively low prices of electricity, direct electricity heating is in use to a large extent. As a consequence of the new building regulations direct electricity heating will only be allowed in houses meeting passive house standards and for houses in areas where no viable alternative exists Air/air (reversible) Exhaust air/water Air/water Brine/water Figure : Swedish heat pump market, , by type of heat pump. * Sales of air/air heat pumps are based on an estimation made by SVEP. From 2008 this estimation is based on a larger statistical basis, which indicates that earlier predictions to a large extent underestimated the sales of air/air heat pumps. Direct electricity 3 % Air/air heat pumps* 17 % Electric boilers 4 % Exhaust air heat pumps 9 % Oil boilers 2 % Biomass boilers 8 % Combi boilers elec/bio 17 % District heating 14 % Brine/water heat pumps 20 % Air/water heat pumps 5 % Table : Estimated shares for different types of heating in single and two family houses. [4] * This figure mainly represents houses heated by direct electricity heating complemented by an air/air heat pump. District heating 82 % Combinations with heat pumps 8 % Heating oil 1 % Electricity 3 % Other combinations 6 % Table : Estimated shares for different types of heating in multifamily dwellings. [5] Focus reports on selected European markets Sweden 113

116 European Heat Pump Statistics OUTLOOK 2011 Table : Average end consumer prices for turnkey solutions in Sweden. Costs The table below illustrates the average end consumer prices, including VAT, for a turnkey installation in single-family houses. The solution cost includes everything to fully commission the system i.e. the heat pump, auxiliary equipment, material and labour costs. Air/air Air/water Ground source Euro Air/air heat pumps are predominantly installed in existing houses using direct electric heating, being the most cost effective solution for these type of dwellings. A recent trend is to install air/air heat pumps in holiday homes. Several products offer new features enabling frost protection or maintenance heating during wintertime and remote monitoring and control systems via GSM-modem. Air/air heat pumps are often used to complement direct electric heating. As ducted air systems for heating are very rare in Sweden, almost all air/air heat pumps in the residential market are of single split type in the single family houses. Additionally, air/air heat pumps are used in small shops, offices and restaurants. The larger ducted air/air systems are used in hotels and office buildings. Air/water heat pumps are generally replacing boilers and for climatic reasons more common in the southern part of Sweden. Due to strict limitations relating to electric peak power demand set down by the new building regulations, air/water heat pumps may only be deployed in the southern part of Sweden in the case of new built. They may however be installed without restriction throughout the country in the case of retrofit. Ground source heat pumps are completely dominated by vertical indirect systems. Horizontal systems do exist but are restricted in use due to the significant space requirements. The main reasons that vertical systems have become so prevalent in Sweden are:, Liberal regulations regarding drilling,, Favourable crystalline bedrock of high thermal conductivity,, Reasonable costs for drilling (23 26 Euro/meter including VAT). Ground water heat pumps are mainly used in areas where the bedrock is covered by a thick layer of soil (>15 m) and thus results in high costs. Such areas are however quite often enriched with large quantities of ground water and consequently enabling the use of ground water heat pumps. Brand names Some of the most significant brand names active in the Swedish market are listed in alphabetical order below. Brine/water heat pumps: Bosch, CTC, Euronom, EVI, IVT, NIBE, Stiebel-Eltron, Thermia, Vaillant, Viessmann, Qvantum. Air/water heat pumps: Aermec, Bosch, CTC, Daikin, Euronom, IVT, Mecaterm, Mitsubishi, NIBE, Sanyo, Stiebel-Eltron, Thermia, Vaillant, Viessmann, Qvantum. Air/air heat pumps: Bosch (Sharp), Daikin, Electrolux (Sharp), Foma, Fujitsu, IVT (Sharp), LG, Mitsubishi, Panasonic, Sharp, Sanyo, Toshiba. Exhaust air heat pumps: IVT, NIBE, ComfortZone. 114 Focus reports on selected European markets Sweden

117 Distribution channels Wholesalers and dedicated retail networks dominate the Swedish heat pump market. Nonetheless, during the last couple of years, air/air heat pumps have been offered through DIY-stores, mail-order firms and web-stores. Industry infrastructure The following sections highlight some of the existing industry support organisations and schemes that serve as part of the industry s infrastructure. National industry associations The Swedish Heat Pump Association (Svenska Värmepumpföreningen or SVEP), founded in 1981, represents approximately 700 members. The members comprise manufacturers and importers of heat pumps (21), installers, and other organisations with an interest in the industry. The Association serves as the official voice for the heat pump industry at a national level. It handles all proposals for new national regulation and legislation as well as international standards that are sent for circulation. SVEP serves as a coordinator for common research activities within the national research program for the refrigeration and heat pump industry. Training and certification Training according to the European Certified Heat Pump Installer scheme is offered by Mid Sweden University, IVT, Thermia and NIBE. Third party certification is voluntary and available according to the European Certified Heat Pump Installer scheme. Consumer complaints board Since 1989, SVEP administers a consumer complaints board for heat pump installations. The board was initiated by SVEP and the Swedish Association for HVAC Installers on request by the Swedish National Board for Consumer Complaints as the national board lacked the technical competence and resources to handle complaints related to heat pump installations. The board is composed of representatives of the installers and manufacturers. SVEP administers and prepares the documentation for the board, but does not take part in the final decision of the board. The board s ruling in these cases has no legal status, but serves as a strong recommendation, and members of SVEP are bound by the statutes to obey the recommendations handed down by the board. Since the start, the board has dealt with more than 500 complaints and presently about 80 cases are handled per year. Product labels Existing product labels covering heat pumps are:, EHPA Quality Label Sweden is a full member of the EHPA Quality Label scheme. The national quality commission is chaired by SVEP., P-Mark, issued by the Swedish Testing and Research Instutute, SP., Nordic Swan Ecolabelling scheme administrated by SIS-Miljömärkning. Incentive schemes Since 8 December 2008, heat pump installations qualify for the tax reduction scheme that applies to renovation and extension works in private households. According to the scheme, up to 50 % of the labour costs related to retrofit works may be offset against tax for each owner of a private property. The maximum amount that may be deducted is SEK (approximately Euro 5 000). Sources: [1] 2010 GDP at current prices per inhabitant, Eurostat: [2] EU energy observatory: publications/statistics/ statistics_en.htm [3] Member questionnaire Swedish Heat Pump Association [4] Rough estimation from SVEP, based on several existing and Swedish Energy Agency. [5] Swedish Energy Agency. Focus reports on selected European markets Sweden 115

118 European Heat Pump Statistics OUTLOOK SWITZERLAND Key facts [1] Population Area km 2 GDP/capita [2] Capital Berne Number of new single/two-family houses Number of new dwellings (2009) Dwelling Stock (2009) Average heat demand single/two family house n/a Share of energy from renewable sources in final consumption of energy ,4 % Binding target for the use of renewable sources by 2020 n/a National emission factor (CO 2/kWh electricity) g Table : Electricity mix for Switzerland [3] Gross electricity generation Fuel TWh Share TWh Share Water power stations 37,136 55,85 % 37,45 56,53 % Nuclear power stations 26,119 39,28 % 25,205 38,04 % Thermal power stations 2,821 4,24 % 3,131 4,73 % Renewable sources 0,418 0,63 % 0,466 0,70 % Total 66, % 66, % Table : Electricity price in Switzerland Energy prices Average end-consumer prices including distribution and taxes: 2010 Electricity 0,14 Euro/kWh Present market situation and market trends The volume of heat pump sales in Switzerland in 2010 was slightly in excess of units, indicating that heat pumps have now reached and are maintaining a significant market share. Although the general business and economic environment continues to be closely linked to the fortunes of the financial sector, there was healthy activity in the renovation of properties during The oil price increased in 2010 by 12 % in comparison with the previous year, making any investment in heat pumps relatively more attractive, and a general upward trend in the oil price in the future can be expected. It may also be the case that the forecasted CO 2 emissions from fossil fuels will have to be increased as Switzerland is currently not on target to achieve its commitments under the Kyoto Agreement. Table : Sales of heat pumps in Switzerland Heat pump /2010 type evolution Air/water ,7 % Water/water ,3 % Brine/water ,7 % Exhaust air/air ,0 % Sanitary hot water ,0 % Total ,7 % 116 Focus reports on selected European markets Switzerland

119 Figure : Swiss heat pump market development Sanitary hot water Exhaust air/air Air/water Water/water Brine/water Figure : Swiss heat pump market, , by type of heat pump. Industry infrastructure The Swiss Heat Pump Association (Fördergemeinschaft Wärmepumpen Schweiz or FWS) had another successful year, with the following activities being central to its focus:, Objective information and advice for consumers and industry participants., Ongoing education of the sector with emphasis on the renovation sector., Quality assurance of heat pump companies and drilling organisations., Objective advice in the assessment of disputed cases by the Heat Pump Doctor., Norms and technology, International cooperation, terms of reference and policy. Of central importance is the cooperation with the various organisations and associations in the sector, specifically suissetec, which is the body representing heating companies, and SWKI, the association representing building technology engineers. Other groups also assist in furthering the development of the renewable energy sector such as Swissolar, Holzenergie Schweiz (Wood Energy), Biomasse Schweiz, the District Heating Association and the representative body for Infrastructure Installations. Worth particular mention is Minergie, responsible for defining building standards and certifications. As the heating demand in modern buildings is significantly Focus reports on selected European markets Switzerland 117

120 European Heat Pump Statistics OUTLOOK 2011 lower than in conventional buildings, heat pumps make an ideal heating solution. Heat pumps can span various heating capacities, unlike oil boilers. When heating oil is burned the lowest heating output is defined by the nature of that fuel, also the case with wood burners. The opportunity to modulate these systems is thus very limited, resulting typically in a stop-start scenario, which tends to be highly inefficient. Key goals outlined in the annual plan for the association were met, with key achievements in the following areas:, Information und advice in all parts of the country., Further education accounted for by 475 man days of classes., Quality assurance through the International Quality Label (formerly Gütesiegel), covering approximately 90 % of heat pumps., Problem resolution in the case of unsatisfactory installations through the Heat Pump Doctor. Heat pumps the economic case Another interesting inclusion in the Association s annual report centred around the economic case for heat pumps. Reference is made to the BFE Study: Swiss Renewable Energy Statistics The report shows that, by the end of 2009, the installed base of heat pumps in Switzerland stood at units (not including large commercial installations). The heat pumps utilise TJ of renewable energy from the environment. (8 779 TJ * 0,2778 = GWh) encompassing air, ground and water based systems. Sources [1] Statistics Swisse: Grundlagen und Übersichten Die Schweitz im Überblick: bfs/portal/de/index/ themen/00/01/blank/02.html [2] 2010 GDP at current prices per inhabitant, Eurostat: [3] Office fédéral de l'énergie OFEN, Swiss statistics on electricity. The heat pumps are powered with TJs of electricity (4 140 TJ * 0,2778 = GWh). If the electricity is sold at an average price of 15 Rappen per kilowatt hour (about 0,13 Euro/kWh), this provides a turnover of CHF 172,5 million for the energy utilities (i.e. about Euro 153,1 million). A further observation highlights that if the heating had been provided by oil boilers instead, the GWh would have required 358,9 million litres of heating oil (36 GJ / liter = MWh / 1000 liter, i.e. 10,7 kwh/liter). In the process tonnes of CO 2 would have been produced. The extrapolation can therefore be made concerning the CO 2 reduction effected by each heat pump installation. 118 Focus reports on selected European markets Switzerland

121 6.20 UNITED KINGDOM Key facts Population Area km 2 GDP/capita [1] Capital London Number of single/two-family houses Number of all buildings Rate of new construction single/two family houses (2010) Average heat demand single/two family house 10,8 MW/year Share of RES in final consumption of energy ,2 % Binding target for the use of renewable sources by % National emission factor (CO 2/kWh electricity) g Gross electricity generation Fuel TWh Share TWh Share Gas 177,60 45,7 % 166,89 44,4 % Petroleum products 5,74 1,5 % 4,37 1,2 % Solid fuels 125,38 32,3 % 104,61 27,8 % Nuclear 52,49 13,5 % 69,10 18,4 % Renewables 21,58 5,6 % 25,22 6,7 % Others 5,88 1,5 % 5,48 1,5 % Total 388, % 375, % Table : Electricity mix for the United Kingdom [2] Energy prices Average end-consumer prices excluding taxes: Electricity domestic 0,14 Euro/kWh Heating oil 0,043 Euro/kWh Gas domestic 0,039 Euro/kWh Pellets 0,04 Euro/kWh District heating n/a Table : Energy prices in the United Kingdom Present market situation The UK market for heat pumps continued to grow in 2010, albeit at a much smaller rate than in the previous year when it jumped by more than 90 %. Overall the market grew by 12 % in volume terms. Mid-year figures showed growth of almost 30 %, a figure that did not continue through to the end of 2010, demonstrating a market slowdown in the second half of the year. The picture varies by heat pump type: volumes of ground, water, and exhaust air heat pumps all fell in 2010, whereas air source heat pumps, the strongest segment, grew significantly. The growth of the total market therefore may be attributed to this growth in the air/water heat pump segment. Within the air/water heat pump segment, monobloc units represent the majority of sales, however split systems grew substantially in 2010, albeit from a smaller base. The market for exhaust air heat pumps, which had grown strongly in 2009 declined in Sales of sanitary hot water heat pumps are negligible in the UK. Focus reports on selected European markets United Kingdom 119

122 European Heat Pump Statistics OUTLOOK 2011 The overall market reached a volume of units in 2010, up from units in Despite this growth, to put sales in context, the heat pump market remains small compared to the huge boiler market in the UK, with more than 1 million units sold every year. It should be noted that this growth occurred against the backdrop of a poor macroeconomic climate, with the economic outlook still remaining somewhat subdued, and construction activity low compared with previous years. Market trends The UK market is expected to maintain a growth trajectory in the coming years. This growth is expected mainly in the air/water segment, whereas ground source units are forecasted to exhibit only moderate growth. It should be remembered that growth in the UK is occurring from a relatively small base with penetration of heat pumps per households significantly lower than that of many other European countries. Political support for renewable energy systems is now providing a positive impetus for further growth and development. It is widely accepted that heat pumps will play an important part in future efforts in the UK to improve the energy efficiency of buildings and reduce CO 2 footprint. The market in the UK is heavily influenced by ever tightening building regulations, and incentives will play an important role in the future growth prospects. The introduction of the RHI (Renewable Heat Incentive) scheme was widely anticipated in early The initial phase allows for support for commercial applications and ground source systems. Details on support for residential applications and air source heat pumps remain under review at the current time, but are not due to come into effect in The following table shows how the UK market has developed in recent years. Table : Sales of heat pumps in the United Kingdom Heat pump /2010 type evolution Air/water ,2% Brine/water and ,8% water/water Exhaust air/water ,5% Total ,3% * Exhaust air/water HP is combined with heat recovery Exhaust air/water Air/water Brine/water and water/water Figure : British heat pump market, , by type of heat pump and forecast growth to F 2012F 2013F 2014F 120 Focus reports on selected European markets United Kingdom

123 Costs Even in a relatively small market such as the UK there is a wide variety of heat pumps sold. Products vary significantly according to energy source, capacity, system architecture, and technical specification. As a result there are quite disparate costs including installation costs. Ground source heat pumps sold in the UK are on average higher priced than air source heat pumps. The reason for this is that ground source heat pumps span higher capacity (kw) ranges than air/water heat pumps. Installation of a ground source heat pump is markedly more expensive than an air source pump. The price of the heat pump itself is just one part of total investment that may comprise boreholes, excavation and the cost of installation. There may be local differences in the costs of drilling or excavation depending for instance on local conditions, the type of soil, the surface or the year the property was built. Additionally, the companies who sell heat pumps are independent organisations (installers or distributors) and are free to set their own prices. Manufacturer Exhaust air/water Air/water Ground-water/ selling price split/monobloc systems water Euro Table : Typical cost for an installed heat pump in the UK, Specifically regarding ground source heat pumps, the estimated cost of an installed system ranges from Euro to The selling prices of the pump vary from about Euro 950 to per kw of peak heat output. The installation costs, represent an additional and major part of the investment. The figure presently used in the UK is 10 metres of horizontal slinky trench for every 1 kw of heat delivered from the heat pump. For vertical systems, one 80-metre borehole should deliver between 3 and 5 kw of heat delivered from the heat pump. A vertical loop installation costs around Euro while a horizontal loop installation costs around Euro Air/source heat pumps also vary considerably in price. Units sold by Japanese, Korean or Chinese suppliers are generally lower priced than many European-made products. The reason for this is lower production costs or higher unit production and economy of scale effects. A typical 6 kw air source heat pump installed in a detached house costs in the range of Euro to Euro in the UK today. An exhaust air system including a heat cylinder costs in the region of Euro This type of system is best suited for flats and apartments. Brand names Ground source heat pumps: IVT, Worcester, Calorex, Nibe, Kensa, Danfoss, Nutherm, Dimplex, Viessmann. Air/water heat pumps: Mitsubishi Electric, Daikin, HeatKing, Calorex, IVT, Nibe, Kingspan, Dimplex, Danfoss. Exhaust air heat pumps: mainly Nibe. Distribution channels Most manufacturers sell to wholesalers and to installers, installers being the most important route to the market. There are some manufacturers, such as Worcester, that sell exclusively to merchants. Focus reports on selected European markets United Kingdom 121

124 European Heat Pump Statistics OUTLOOK 2011 National industry association The Heat Pump Association (HPA) is the UK's leading authority on the use and benefits of heat pump technology and includes many of the country's leading manufacturers of heat pumps, components and associated equipment Training and certification In order to educate the still nascent market, manufacturers run regular training programs for installers. Incentive schemes Previous incentive schemes such as the Low Carbon Buildings Programme (LCBP) and the Scottish Community & Householder Renewables Initiatives (SCHRI) have expired. The Renewable Heat Incentive (RHI) is a payment system for the generation of heat from renewable energy sources and was introduced in the United Kingdom in July The RHI replaces the Low Carbon Building Programme, which closed in The RHI operates in a similar manner to the existing Feed-in Tariff system, and was introduced under the same legislation the Energy Act In the first phase of the RHI, cash payments will be eligible to owners who install renewable heat generation equipment in non-domestic buildings. The government maintains that the payments under the scheme have been calculated to give a return on investment of 12 % (except solar thermal, which is lower), and, as such, are deemed to be generally more generous than the feed-in tariffs. Under the scheme, most renewable heat sources are eligible, but not open fireplaces or biomass stoves. The use of liquid biofuels is quite restricted. In the first phase, the RHI applies to non-residential buildings only and is planned to be extended to domestic buildings in October The renewable heat technologies, which are eligible under the first phase of the RHI, are solar thermal, ground and water source heat pumps, biomass boilers, and biomethane. Sources [1] 2010 GDP at current prices per inhabitant, Eurostat: [2] EU energy observatory: publications/statistics/ statistics_en.htm The Domestic RHI will be introduced in October 2012 and will be available for all eligible installations from July 2009 onwards. Any installation taking place from July 2011 onwards will be eligible for the RHI Premium Payments, which will consist of an upfront payment prior to the RHI being introduced. The RHIPP are as follows;, Air source heat pumps 850 (about Euro 970),, Ground source heat pumps (about Euro 1 430),, Biomass boiler 950 (about Euro 1 080),, Solar thermal 300 (about Euro 340). Inclusion of air/air heat pumps into the RHI scheme is under consideration. 122 Focus reports on selected European markets United Kingdom

125 7 FOCUS REPORTS ON SELECTED MARKETS 7.1 JAPAN Key facts Population (2009) Area km 2 GDP/capita [1] Capital Tokyo Number of single/two family houses (2008) [2] Number of dwellings in multi-dwelling buildings (2008) [3] Number of dwellings (2008) Number of multi-dwelling buildings (2008) Rate of new construction single/two family houses [4] 2,7% New construction of individual houses (2010) Total heat consumption for residential sector 6,5 MWh/year Share of RES in final consumption of energy 2005 [5] 8,4 % Target for the use of renewable source by 2020 [6] 20 % National emission factor (CO 2/kWh electricity) g Electricity production Fuel TWh Share Gas % Petroleum products 73 8 % Solid fuels % Nuclear % Hydro 77 8 % Other RES 10 1 % Total % Table 7.1-1: Electricity mix for Japan [7] Energy prices Electricity (domestic) 0,159 Euro/kWh Electricity (industrial) 0,110 Euro/kWh Heavy oil 0,63 Euro/liter City gas 1,32 Euro/m3 Kerosene 0,81 Euro/liter Approximate figures, 1 Euro = 112 Yen,1 Euro = 1,43 USD. Table 7.1-2: Energy prices in Japan Focus reports on selected markets Japan 123

126 European Heat Pump Statistics OUTLOOK 2011 Present market situation In Japan, heat pump technology has a long history of use for both heating and cooling across residential, commercial and industrial sectors. In the domestic environment, heat pumps are deployed for space and water heating and in refrigerators and air conditioners for cooling. Today they are used in the majority of households in Japan. In recent years, heat pumps have additionally been incorporated into water heaters and washing machines and dryers. Their market share is increasing rapidly due to their performance, energy savings and CO 2 -emissions reduction potential. Heat pumps are also used for space heating and cooling in office buildings and retail outlets. The technology is widely utilized in commercial applications for refrigeration and refrigerated display cabinets for fresh food for example, and for vending machine cooling. More recent times have seen high capacity industrial heat pumps being deployed in district heating & cooling systems. Heat sources include (exhaust) air, river water and waste water; these systems providing higher energy efficiency and much lower environmental loads compared with combustion-based systems. In the industrial field, heat pumps are typically utilized in the following areas:, cryogenic warehouses for the storage of frozen food., applications for maintaining the freshness of agricultural products requiring cool and humid air., applications requiring the reproduction of a natural environment, such as temperatures and humidity levels necessary to efficiently cultivate various agricultural products. In the market for small-to medium-size chillers for commercial and industrial use, electric heat pumps have already become dominant, and the market has reached maturity. Thanks to the efforts and support of both Government and manufacturers, the efficiency of heat pumps has improved dramatically in the last decade and has positively impacted on market development. The domestic demand for residential air conditioners has tended to remain static in recent years, and was 6,7 million units/year in Annual volumes of small-to medium-size chillers for commercial and industrial use is approximately to units/year. For large scale cooling, the sale of centrifugal chillers has been increasing in volume in spite of the decreasing trend in the market as a whole. Sanitary hot water heat pumps for residential applications have experienced a rapid increase in sales since 2003, with units sold in Market trends Most room air conditioners (RACs) sold in Japan have a reversible function and the heating function is becoming ever more popular as its efficiency is far superior to that of combustion based heaters. The market for these products is now mature and saturated, to the extent that annual sales volumes have been static since the mid 1990s. Future annual market forecasts are of the order of 7 8 million units. On the other hand, the sanitary hot water product category known as EcoCute continues to boom. EcoCute comprises a heat pump water heater that efficiently heats water using outside air as the heat source, and utilizes CO 2 as the refrigerant. Its APF (Annual Performance Factor) is 3,5 or higher, providing a more energy efficient solution in comparison with fossil fuel based water heaters. The use of 124 Focus reports on selected markets Japan

127 Sanitary hot water (5,8%) VRF (7,3%) Air/air (reversible) (86,9%) Figure 7.1-1: Japanese heat pump market, 2010, by type of heat pump. cheaper night rate electricity also contributes to reduced running costs. EcoCute was introduced in 2001, and, as of the end of March 2011, the installed base totaled 2,8 million units in Japan. Despite the Government s decision to terminate its subsidy program in 2010 the deployment of EcoCute has continued to increase, in part driven by strong environmental considerations, which recognize EcoCute s significant CO 2 emissions reduction potential. Recent developments in the EcoCute product range include units that can operate at outside air temperatures down to 25 C. In commercial and business sectors, reversible air/air heat pumps, such as packaged air-conditioners and variable refrigerant flow units (VRF), which control each inside unit independently, are widely deployed in environments from small retail units to midsized office buildings. VRF systems are increasingly replacing previously used central air-conditioning with ducted systems. For midsized buildings with central air-conditioning systems, air/water chillers, air/water heat pumps and water/water chillers have maintained their market shares. In this sector typically, chillers are used for cooling, and boilers installed for space heating. It is expected to see central air-conditioning systems now also being deployed in larger buildings. Although absorption chillers/heaters have been mainstream for some time, electrically driven chillers such as centrifugal chillers are now being widely adopted in light of global warming issues. With regard to equipment costs, it would still appear that absorption chillers are less expensive than centrifugal chillers, though their additional capital costs are recovered through lower operational costs. For industrial applications, particularly in the food, beverage, and agriculture sectors, operating temperatures are often relatively low thus lending themselves to the use of heat pumps. Moreover, recent technological advances in capacity and output temperature are extending the potential application of heat pumps in the industrial sector. Currently, heat pumps producing the steam at 165 C are being commercialized in Japan. Costs The following table illustrates the average cost for a reversible air/air room airconditioner and an EcoCute, (CO 2 -based sanitary hot water heat pump) inclusive of installation costs and consumption tax. Air/air (Mini-split) EcoCute Total cost per unit (Euro) Table 7.1-3: Average investment cost for heat pumps in Japan. Air/air room air-conditioners (unducted mini-split) are the most popular solutions for space heating and cooling in the residential sector in Japan. On average, each Focus reports on selected markets Japan 125

128 European Heat Pump Statistics OUTLOOK 2011 household utilizes 2,4 room air-conditioners (2004). Systems of this type installed today are almost all reversible types. The number of ground source heat pumps has been increasing, particularly in cold regions, such as the northern part of Japan. Average installation costs of a complete system is approximately Euo including radiators. Brand names Ground source heat pumps: SUNPOT, General heat pump. Water/water chillers: Daikin, Mitsubishi, Toshiba, Hitachi, Mitsubishi heavy industries, KOBELCO, Ebara, General heat pump, Trane. Air/water heat pumps: Daikin, Mitsubishi, Toshiba, Hitachi, Mitsubishi heavy industries, KOBELCO, MAYEKAWA, General heat pump, Toyo. EcoCute sanitary hot water heat pumps: Daikin, Mitsubishi, Sanyo, Toshiba, Hitachi, Mitsubishi heavy industries, MAYEKAWA, Corona, Toto, Panasonic, CHOFU, Itomic, Takara. Air/air heat pumps: Daikin, Mitsubishi, Sanyo, Toshiba, Hitachi, Mitsubishi heavy industries, Trane, Toyo, Sharp, Fujitsu, Panasonic, General heat pump, PMAC, Toyo. National industry association The Heat Pump and Thermal Storage Technology Center Of Japan (HPTCJ) was founded in 1986 as a public organization by the Japanese government. It has about one hundred members comprising heat pump manufacturers, energy utility companies, construction companies, architects, etc. Its purpose is to promote heat pumps and thermal storage systems through international collaboration and cooperation, public awareness and R&D. HPTCJ, as Japan s representative body to the IEA for heat pumps, also participates in international collaborative R&D programs regarding heat pumps based on the Implementation Agreement with IEA. Sources [1] 2010 GDP at current prices per inhabitant, Eurostat: [2] Japan Statistics Bureau: /nihon/1_3.htm [3] Japan Statistics Bureau: /nihon/pdf/all.pdf [4] Ministry of Land, Infrastructure, Transport and Tourism: pdf [5] Ministry of Economy, Trade and Industry: report/downloadfiles/ g80925b01j.pdf [6] Heat Pump & Thermal Storage Technology Center of Japan: whatsnew_bn/doc/newsrelease pdf [7] Agency for Natural Resources and Energy: topics/hakusho/ 2010energyhtml/2-1-4.html Product labels Energy Conservation Labeling Program (since 2000). For the purpose of providing consumers with necessary key information, an energy conservation labeling system was launched in Japan in The labels are affixed to products to indicate their level of achievement of specific energy conservation standards. Incentive schemes Subsidies With regard to the business and commercial sector, air/air heat pumps, air/water heat pumps and centrifugal chillers that meet a certain level of efficiency are eligible for subsidies. High efficiency heat pumps and chillers are eligible for tax rebates. In addition, there are other incentive programs for systems that achieve energy savings and CO2 emission reductions, systems that use natural refrigerants, and systems deployed in thermal spring facilities. As earlier noted regarding EcoCute, the subsidy program commenced in 2002 was terminated in Top Runner Program The Top Runner Program introduced in 1999 makes provision for systems and equipment covered in the Law Concerning the Rational Use of Energy. This law imposes on manufacturers the requirement to meet certain standard values to ensure they manufacture energy-conserving products. The Top Runner concept defines that the energy efficiency of a particular product shall not be lower than the best performing currently commercialized products in its category. A total of 23 product types, including air conditioners, are targeted for the program as of Focus reports on selected markets Japan

129 7.2 UNITED STATES OF AMERICA Key facts Population Area km 2 GDP/capita Capital Washington D.C. Number of single/two family houses Number of commercial buildings (1989) Rate of new construction single/two family houses National emission factor (CO 2/kWh electricity) g Net electricity generation Fuel TWh Share TWh Share Natural gas ,3 % ,8 % Petroleum products 50 1,3 % 48 1,2 % Solid fuels ,5 % ,9 % Nuclear ,2 % ,6 % Renewables ,4 % ,2 % Others 12 0,3 % 11 0,3 % Total % % Table 7.2-1: Electricity mix for the United States Present market situation Heat pumps have been accepted as a viable alternative to fossil fuel furnaces and boilers or direct electric heating since the 1980s. Heat pump systems have traditionally been popular in the U.S. in the southern and southwestern parts of the country where the space-conditioning need is primarily for cooling but some heating is required. They have been less popular in parts of the country where heating is the primary need, except in special situations where electricity rates are low, or natural gas and fuel oil are not readily available, making electric heat or propane the main alternatives. Heat pump installations in colder parts of the U.S. have shown quite successful performance and reliability results, when careful attention has been paid to the sizing of the units and to installation. With greater new home construction rates in the south and southwest over the past twenty years heat pump annual sales grew to more than 2 million units. And with the installed heat pump stock accumulated over the past 30 years, a significant portion of these sales has been for add-on and replacement. Replacement sales have been stimulated by the higher efficiencies of current air conditioners and heat pumps. Market trends Figure illustrates the growth of unit shipments for unitary air conditioners and heat pumps in the U.S. as well as in Canada and Mexico from the 1980s through 2010 (AHRI, 2011). From its peak in 2006, the combined market for unitary air conditioners and heat pumps has shrunk mainly due to the global recession. The market for heat pumps alone, however, has increased 7 % in the United States since 2009, and now totals Figure compares U.S. shipments of gasfired warm air furnaces and heat pump shipments (AHRI, 2011). In the past, Focus reports on selected markets United States of America 127

130 European Heat Pump Statistics OUTLOOK 2011 Figure 7.2-1: Total U.S. heat pump and unitary air conditioner shipments Air source heat pumps Unitary air conditioners Air source heat pumps Gas warm air funaces Figure 7.2-2: U.S. air source heat pump and gas-fired warm air furnace shipments shipment patterns for heat pumps and gas furnaces have followed a similar pattern, reflecting economic ups and downs, along with growth in overall housing trends and a growing replacement market. 2010, however, saw increased growth in both product categories for the first time since 2005, and the growth rate for gas-fired warm air furnaces increased nearly twice as fast (13 %) as that for heat pumps (7 %). It should be noted that, in the United States, the vast majority of new furnaces are gas-fired, and are used in addition to central air conditioners. Heat pumps are used to perform a dual heating and cooling function, and most are split-systems, with an outdoor unit and an indoor fan-coil unit. The downturn in the residential housing market in the United States continues a result of the ongoing economic stagnation and declining availability of credit. Despite the continued lack of growth in the housing sector, shipments of heat pumps and gas furnaces continue to increase, partially as a result of tax incentives for the purchase of highly efficient equipment and partially due to the eventual replacement requirement of older, less efficient systems. In recent years, consumer confidence regarding the quality and effectiveness of heat pumps has increased as the technology has overcome some of its earlier performance issues. Even though the market has declined during the recession (only just beginning a recovery in 2010), it is still at a considerably higher level than it was in the 1990s. 128 Focus reports on selected markets United States of America

131 The majority of residential heat pumps installed in the U.S. are split systems (approximately 70 %). Single package units are popular in certain markets and geographic locations (e.g. southwestern U.S.) where many are installed on roofs. Many homes in this region do not have basements. Evaporative coolers are also combined with these units in the drier climates. In the northern climates, split system heat pumps may be combined with gas or oil-fired warm air furnaces with integrated controls to determine the optimum combination to use (generally the priority is given to the gas or oil furnace at lower outside temperatures). Such systems are commonly referred to as hybrid systems, mirroring terminology in vogue in the automotive sector. Newer, high efficiency heat pump systems now incorporate multiple stages of heating (and cooling) with multi-speed or variable speed compressors and circulating fans. The systems may also incorporate communication capabilities to enable remote monitoring and control of the heating and cooling functions. Ducted warm air systems, which are common in the U.S., permit centralized cleaning and humidification. Humidifiers can be installed directly on the air handler (fan coil or furnace), thereby providing humidity to the entire residence. Ductless systems have become more popular in recent years but are a small part of the U.S. market, primarily used in those areas where existing homes were built without ducts. Such systems are also used in small commercial buildings. Sanitary hot water heat pumps Electric heat pump water heaters have received a great deal of interest in the U.S. beginning in the late 1970s. By the mid-1980s, there were at least 15 manufacturers of such units for residential and small commercial buildings. This surge of interest in these systems quickly dissipated when consumers waning interest in energy efficiency was insufficient to overcome the relatively higher cost of these units. In the past couple of years however, interest has again surged, as homeowners seek a respite from relatively high energy prices. Each of the major manufacturers in the U.S. manufactures and ships these units. Ground source heat pumps Ground source heat pumps (GSHP), also known as geothermal heat pumps, have been on the market for more than a decade in the U.S. Determination of GSHP shipment quantities is complex due to different product types and their deployment in commercial water loop heat pump systems rather than as ground or water coupled installations. The market is estimated to be about 15% of the total heat pump market, with around units currently installed in the United States (EPRI). Currently, at least 16 manufacturers serve the residential, commercial and institutional markets in the U.S. After initial developments in the late 1970s, the market declined in the 1980s, but began to grow again in the 1990s as a result of market development activities stimulated by the U.S. and Canadian governments. Recent increases in GSHP sales are attributed to rising fossil fuel prices and concerns over energy security. A substantial U.S. federal government tax credit, equal to an uncapped 30% of the installed cost of a new system, which began in 2009 and will continue through 2016, has also been a very significant factor. Continued growth of this market is inevitable as the benefits become more widely recognized, installers become more proficient and widespread, the infrastructure expands, and the tax credits continue. In a report presented at the 9th International Heat Pump Conference (Groff, 2008), the results of a private study highlighted the growth in ground source heat pump shipments in the U.S. in the period 2001 to This study showed an increase of 65 % over this six-year period. The U.S. Department of Energy EIA (Energy Information Administration) website provides market data on ground source heat pump sales by AHRI product category. Focus reports on selected markets United States of America 129

132 European Heat Pump Statistics OUTLOOK Total EIA 2008 Study Figure 7.2-3: Annual U.S. shipments of ground source heat pumps Sources GDP/capita: 2010 GDP at current prices per inhabitant, Eurostat: AHRI Equipment Statistics, AHRI website: U.S. Energy Information Administration (EIA), Electric Power Monthly. Lovvorn, N.C Reliability and Lifetime of Residential Heat Pumps Proceedings of Joint HPC and IPUHPC Workshop Hands-On Experience with Heat Pumps for Buildings AHRI Canadian Geo Exchange Coalition The State of the Canadian Geothermal Heat Pump Industry 2010 Industry Survey and Market Analysis. EPRI. Groff, G.C th International Heat Pump Conference Proceedings. International Energy Agency. Hughes, P., Kaarsberg, T., Wall, E th International Heat Pump Conference Proceedings. International Energy Agency. HRAI Lapsa, M.V., Khowailed, G th International Heat Pump Conference Proceedings. International Energy Agency. National Home Builder s Association National Resources Canada Energy Efficiency Trends in Canada 1990 to Office of Energy Efficiency. U.S. Department of Energy Water Heater Market Profile. U.S. Energy Information Administration renewables/page/ghpsurvey/ ghpssurvey.html The residential and commercial unit shipments from the 2008 study were combined in order to compare with the EIA data (U.S. EIA 2010), as shown in figure One of the difficulties in obtaining good comparative data for these products is that the equipment used in these systems (packaged water (or brine) / air heat pumps) is classified in several different product areas by AHRI and some product types are not included in the classification areas. Thus it is necessary to separate out the products that are used in loop systems in commercial buildings from those used in ground source heat pump systems to extract heat from ground and ground water sources. Nevertheless, the data from the two sources presented in the figure gives clear indication that sales of ground source systems are increasing. With efforts to improve the infrastructure for design and installation, it is expected that these systems will play an increasingly important role in the U.S. heating market in the future. The unitary heat pump and air conditioner sales statistics presented previously in this report cover products up to approximately 5,5 tons (19 kw) in cooling capacity. Larger capacity units, whose sales are not captured in the small unitary statistics, are also applied to large residences as well as to commercial buildings. Accordingly, it is of interest to consider the recent sales history for the larger unitary products (19 to nearly 200 kw). Annual volumes in this product category are in excess of units, with the 20 60kW range accounting for the majority of shipments. Summary and outlook Despite the severe housing market recession of the past 3 or 4 years, the popularity of heat pumps has shown remarkable strength and it is encouraging to see heat pumps gaining market share in annual shipments of residential heating equipment, and also in the existing building stock. The combination of concerns for energy security and increased price of fossil fuels for residential heating and water heating has given strong stimulus for interest in alternative heating systems. The long track record of reliable, energy efficient performance for contemporary heat pump products has provided end-users with confidence to move to heat pumps for primary or dual-system installations. The commensurate growth in ground source heat pump systems (even without incentives and strong market promotion in the U.S.) and for heat pump water heaters gives further evidence of a bright future for heat pump systems in the U.S. and when the housing market recovers it is expected that sales of these systems will continue at even greater growth rates. Continuing technological improvements and increased efficiency, stimulated by continuing elevation of minimum efficiency standards and competition will provide an even better competitive position for heat pumps against conventional fossil fuel heating systems. It should be an exciting time for heat pumps over the next decade. 130 Focus reports on selected markets United States of America

133 7.3 CANADA Key facts Population [1] Area km 2 Capital Ottawa Total detached residential homes National emission factor (CO 2/kWh electricity) g Total electricity generation 2008 Fuel TWh Share Natural gas 31,36 5,1 % Petroleum products 9,49 1,5 % Solid fuels 104,58 16,9 % Nuclear 90,59 14,6 % Hydro 377,37 61,0 % Other renewables 5,41 0,9 % Total 618, % Table 7.3-1: Electricity mix for Canada [2] Present market situation In view of the relatively extreme heating demands in most regions of Canada, ground source heat pumps (GSHPs) are the solution of choice in most Canadian heat pump markets. For that reason this country outlook focuses on GSHPs. Air source heat pumps do have some limited applications in coastal regions in both east and west, and to some degree in southern Ontario, but compared to European markets, little penetration. The overall market for ground source heat pumps in Canada is still immature, but has grown quickly in the past four to five years. As may be expected, the relatively small sector has been undergoing a process of professionalization, under the leadership of a national quality program developed and deployed nationwide by the Canadian GeoExchange Coalition (CGC), Canada s national association for ground source heat pumps. At the same time the technology has reached an increased level of recognition and acceptance amongst the general public in the period from This is mainly due to successful multi-year federal and provincial energy efficiency incentive programs, as well as industry activities such as a national television campaign conducted by the national association. Heat pumps however remain an uncommon choice overall, amounting to less than 0,5 % of the national HVAC market. In marketing terms, while regional disparities exist, the Canadian residential market is now mainly accounted for by sales to early adopters and in some regions the early majority. In the commercial market, sales are principally to innovators and early adopters, generally through green building schemes and networks. One reason for this lag in the commercial market is a delay in the development of specific risk management strategies by the Canadian GSHP industry, as well as some construction industry stakeholders out of date and still negative perception of geothermal suppliers. As expected, sales in the market segment for single family houses only grew by 5 % in 2009 after three successive years of 60% annual growth. Estimates for 2010 indicate that the residential market declined by roughly 20 % but remains very strong considering a five year rolling average. This market adjustment was predictable after many years of over heated growth rates fuelled by a federal Focus reports on selected markets Canada 131

134 European Heat Pump Statistics OUTLOOK 2011 Figure 7.3-1: Fuels replaced by heat pumps in Canada [3] government financial incentive. In early 2011, the federal government officially released a set of regulatory amendments in the tax regime, which allow (under specific circumstances) owners of commercial systems to offset 50 % of a GSHP project investment (including drilling and ground work) against tax in the first year of operation. This accelerated capital cost allowance, successfully lobbied for by the national association, puts GSHPs on the same tax footing as wind and solar technologies and represents a significant industry turning point. There are currently a significant number of projects in the commercial and institutional sector. Recently, dozens of schemes have been completed in schools, hospitals, large surface retail stores, arenas, but also in smaller buildings such as municipal libraries, car dealerships, banks and highway rest areas. Based on The State of the Canadian Geothermal Heat Pump Industry 2010, a report published by the CGC in October 2010, total industry revenues for the design and installation of residential and commercial geoexchange systems (including heat pump, drilling and equipment) totalled approximately $55 million in This figure grew to more than $500 million by In general terms, the chief competitors to heat pumps are Canada s historically low energy prices, followed by high-efficiency gas furnaces at the residential level. District heating, although an increasingly popular discussion topic, is still very limited in its Canadian applications. However, there currently is a strong and growing interest by many municipal stakeholders thanks to the efforts deployed by the CGC and partner associations in promoting the technology in nontraditional applications. Generally industry stakeholders see the advance of district applications as positive for the GSHP market, and lobby for the consideration of low-temperature district systems and their inclusion in these policy discussions. However, because population density is limited even in Canada s cities, and energy prices are low, one could expect district systems to be geographically limited in Canada. Currently, due perhaps to low constituent awareness of district energy or heat pump options, and the fact that both markets are at a very early stage, the policy conflict between district systems and heat pump systems, which is common in Europe, essentially does not exist in Canada or the US. Market trends The GSHP market is generally dominated by new-build installations in single family houses and cottages. However, during the federal government incentive program, it is estimated that over GSHP were installed in existing homes. Figure specifies fuels, which residential installations have replaced in Canada during Historically heat pump sales have been characterized by high 132 Focus reports on selected markets Canada

135 Figure 7.3-2: Ground source heat pumps installed per year, [3] sales during the spring, followed by installations during the summer and autumn, and significantly lower sales during the rest of the year. This pattern was however less pronounced during the years of continuous strong sales growth, As the federal incentive program has come to an end (although at the time of publication it is still a possibility that it could be extended by one year to March 2012) and as sales have dropped to their 2008 level, the expected sales pattern for upcoming years remains unknown. Figure shows a graph of actual sales through to 2009 and estimated sales in At the time of writing, there are signs of sales improvements for 2011 but mixed signals are being sent by the markets. Sales in the new built market segment and in the commercial sector appear to be gaining momentum whilst sales in existing homes have stalled as customers wait for a government decision on an extension of the financial support program. The overall picture is also blurred because of major shifts in manufacturers market shares. For example, one major distributor lost massive market share more than 50 % with a number of smaller suppliers gaining. Commercial installations are increasing as the economy recovers from the 2009 economic downturn, despite the fact they have much less industry infrastructure to support them. In recent years, developers and commercial building owners have become more aware and familiar with the technology and its financial benefits. This market segment is expected to increase significantly as the national association develops adequate accreditations to recognize designers and ground installers in the commercial segment. The breakdown of units installed between the residential sector on the one hand, and the commercial and industrial sector, on the other hand, was roughly in recent years. Based on the 2009 CGC Industry Survey and field results, we are confident that the residential market share of units installed was roughly 46 % in both 2007 and Units installed in the commercial and industrial sector accounted for 54 % of all units. Almost all units in the table are brine/water systems, using propylene glycol, ethanol, and in some cases methanol for heat transfer fluids in ground piping. As general knowledge of heat pump technology has not yet reached a high level in Canada, customers are rarely involved to a significant way in their choice of a heat pump, leaving most decisions to the system designers or the contractors. Features such as remote control, capacity control and online connections through internet have yet to attract much interest and attention. A significant feature of the Canadian heating market is the widespread availability of gas, with very affordable prices, thus gas furnaces have a large market share. Focus reports on selected markets Canada 133

136 European Heat Pump Statistics OUTLOOK 2011 Table 7.3-2: Heat pump average system prices in Canada. Historically Canada has relatively low prices for all forms of energy, and in places with robust hydroelectric grids (BC, YK, MB, and QC especially), direct electric heating commands a high market share. Hydroelectric utilities however, are more than ever now aggressively promoting energy efficiency, and this dynamic will help drive GSHP sales and will probably also ensure that most regional incentives will be maintained in the event of an end to the Federal Government s support program. Costs Average Median Standard Average Price / Ton Deviation System Price Closed horizontal loops $ $ $ $ Closed vertical loops $ $ $ $ In the residential sector, horizontal GSHP systems account for about 52,5 % of the Canadian GSHP markets. Vertical systems represent 34,1 % of the activity followed by lake loop and open loop systems at about 5 % each. There are however important and significant regional variations. In Ontario, the geology and the landscape is favorable to horizontal systems and they account for about 67 % of all installations. In Québec, vertical systems account for 85 % of all residential installations. In commercial applications, virtually all the systems are vertical. Brand names Manufacturers with the greatest penetration in the Canadian market are listed in alphabetical order below. Whilst many global brands are present, most Canadian systems to date use one of three US-manufactured appliances. Brine/water heat pumps: ClimateMaster (US), Enertech Manufacturing (US), Enertran (Canada), FHP-Bosch (US/European), GeoSmart (Canada), IceKube Systems (Canada), Maritime Geothermal (Canada), Northern Heat Pump (Canada), Waterfurnace (US). Direct expansion heat pumps: EarthLinked, Maritime Geothermal. Distribution channels Wholesalers and dedicated retail networks dominate the Canadian heat pump market. Market participants generally discourage do-it-yourself approaches, mailorder firms, web-stores etc, though some retailers do exist. Industry infrastructure The following sections highlight some of the existing industry supportive organizations and schemes that serve as part of the industry s infrastructure. National industry association The Canadian GeoExchange Coalition (CGC), Canada s national heat pump industry association, acts as the industry catalyst to unite private and public sector stakeholders, and to expand the market for ground source heat pumps and geoexchange technology in Canada. As the nexus of information, training, certification, standards and public awareness, CGC s mandate is to work with stakeholders to build the necessary infrastructure to foster the growth of the Canadian geoexchange industry. CGC presently comprises about 300 corporate members in eight categories including manufacturers, installers, designers, distributors, energy service companies and utilities, legal and financial support firms, etc. 134 Focus reports on selected markets Canada

137 Training and certification CGC, working with the Government of Canada and many of Canada s provincial and municipal governments has assembled a first-in-the-world quality program for GSHP technology. As part of this quality program, CGC developed Made-in- Canada training in 2006 for installers and designers, and has expanded its course offerings, whilst constantly developing its courses annually through investment of its training proceeds. CGC now offers eight courses, and is constantly and sequentially reviewing its material to ensure content is always up-to-date. CGC has trained over installers, designers, municipal inspectors and/or other stakeholders since Training according to the CGC Global Quality GeoExchange Program is now offered by the association, by each major manufacturer or distributor in North America (Canada and the U.S.), and by a network of seventeen polytechnics and colleges. Third party certification of graduates is not required to apply for CGC Accreditation but is often required to work in a given province; therefore third party certification may be indirectly required to satisfy the requirements of CGC Accreditation. Consumer complaints board CGC has a formal complaints mechanism, which was developed in 2009 and launched in The complaints process is essentially an administration and documentation process, where CGC professional staff make a recommendation to a committee on its board of directors. Where complaints involve the legal system i.e. the customer or contractor goes to court CGC waits for the legal decision before taking its own action. Any action the association takes is executed under the terms of its national quality program, and for the disputants is implicitly voluntary. CGC staff have in the past handled complaints directly, involving approximately serious complaints out of systems certified from 2006 to the present day. Product labels Existing product labels related to heat pumps are:, CAN/CSA C-13256, the Canadian version of ISO (parts one through nine), known commonly as CSA Certification. Heat pumps sold inter-provincially in Canada are required to have this seal and approval. Units are generally tested at facilities in the U.S., as only one testing laboratory exists in Canada., CAN/CSA C-748 Performance of Direct Expansion Heat Pump equipment., CAN/CSA C Design and Installation of Earth Energy Systems updated in 2009 at the request of CGC to include direct systems., CAN/CSA B the key piping standard referred to in C (the design and installation standard above). Significantly this standard was revised in 2009 to include PE100 / PE 4710 at the request of the national association. Incentive schemes Since 1 April 2007, ground source heat pump retrofit installations have qualified for up to $ in grants under the federal government s ecoenergy Retrofit-Homes program. This program officially ended on March 31st 2011 but could be extended for an additional year. However, regional grants are still available in many provinces. Some programs cover new built as well as retrofit; space does not permit a full listing of programs here. As mentioned earlier, an accelerated capital cost allowance was introduced in early 2011, allowing commercial GSHP owners to amortize 50 % of total project costs in year one. This tax credit includes all forms of geothermal energy, but puts GSHP systems and geothermal development projects in line with solar and wind system tax treatments. This tax measure is expected to deliver a significant push to decision makers, and thereby directly influence the market for commercial systems. Sources [1] Statistics Canada's first quarter preliminary postcensal population estimates as of April 1, [2] Statistics Canada, Report on Energy Supply-Demand in Canada, Ottawa, February [3] The State of the Canadian GeoExchange Industry 2010: Industry Survey and Market Analysis. Focus reports on selected markets Canada 135

138 European Heat Pump Statistics OUTLOOK CHINA Key facts Population Area km 2 Capital Beijing Number of households Share of RES in final consumption of energy % Binding target for the use of renewable % National emission factor (CO 2/kWh electricity) 2008 National emission factor (CO 2/kWh electricity) 2010 Standard coal equivalent / kwh electricity 745 g 823 g 335 g Generation of electricity 2010 Table 7.4-1: Electricity mix for China Fuel TWh Share Gas 737,14 1,7 % Solid fuels ,75 76,8 % Nuclear 768,17 1,8 % Hydro 6 863,07 16,2 % Wind 500,97 1,2 % Others 921,05 2,2 % Total , % Table 7.4-2: Energy prices in China Energy prices Electricity (domestic) Electricity (industrial) Coal gas Natural gas District heating Approximate figures for 2010, 1 Euro = 9 CNY. 0,053 Euro/kWh 0,062 Euro/kWh 0,156 Euro/m3 0,278 Euro/m3 0,02 Euro/kWh Present market situation After more than 20 years in development, the market for heat pumps in China has now grown to one of significance. Today, air source heat pumps are widely used for space heating. Around 90 % of room air conditioners (RACs) sold in China are reversible, having both a cooling and heating function. In areas without district heating, generally south of Yangtze River, RACs are the most popular form of residential space heating due to the limited networked gas supply. In 2010, sales of domestic room air conditioners exceeded 50 million units. According to a five cities consumer survey done in 2008, the average heating function operation time for each room air conditioner in China is around 200 hours. (This is interestingly far lower than in Japan). Thanks to the efforts of various stakeholders including the Government and manufacturers, the efficiency of RACs has improved dramatically since Currently, the minimal efficiency performance standard (MEPS) for RACs in China is EER 3,2. Inverter technology is becoming increasingly popular in China. In 2010 the market share for inverter RACs was around 20 %. 136 Focus reports on selected markets China

139 Export Domestic Figure 7.4-1: Room air conditioner shipments, China, (1 000 units). [1] The market for sanitary hot water heat pumps has been growing strongly since According to a market survey completed in 2005, there were 54 manufacturers producing sanitary hot water heat pumps in China, but in 2010, the number had grown to more than 300. The sales also increased quickly from units in 2003 to units in 2010, with approximately 60 % of revenue accounted for by sales to the residential sector. The typical product sold to this sector comprises a 1,5-horse power compressor with 150 liter water tank. The national standards for commercial and residential use were published in 2008 and 2009, which requested that the COP of sanitary hot water heat pumps should be greater than 3,5. Unlike Japan, in China these products are still using R22 and R134a refrigerants. The principal barrier to entry is that air source heat pumps are not officially accepted as a renewable energy source in China. As a result, there is few governments subsidy or incentive for air source heat pump water heater. On the other hand, the electric resistance water heater still has the biggest market share in China. Ground and water source heat pumps are mainly used in commercial buildings and this sector has also developed rapidly since 2001, mainly in cold regions with strong support from both central and local government. In 2010, around 100 million m 2 of building space had geothermal and water source heat pumps , ,30 82,30 39,30 2,71 11, Figure 7.4-2: Air source heat pump shipments, China, (1 000 units). [2] Focus reports on selected markets China 137

140 European Heat Pump Statistics OUTLOOK 2011 Table 7.4-3: Water source heat pumps, China, [3] installed. According to the Chinese Refrigeration and Air Conditioning Industry Association (CRAA), the production data in 2010 for these types of systems was as follows: Product Production (units) Sales (units) Water source heat pump (water/air) Water source heat pump (water/water) For the water/air types, 74 % have a cooling capacity of less than 7 kw, For the water/water type, 44,5 % cooling capacity is less than 50 kw, 31,4 % is between 50 kw to 200 kw, and 24,1 % is greater than 200 kw. According to the China Renewable Energy Society (CRES), approximately 85 % of this number is accounted for by geothermal heat pumps, and around 15 % is water source heat pumps (sources such as sewage water or brine). Half of them are for heating only purposes. Heat recovery systems are also widely used in China. CRAA data indicates that in 2010 the total market for such systems was units, however they also believe this to be underestimated. The China Gas Appliance Center (CGAC) estimates that sales of gas driven heat pumps were around units in Some local governments, like that in Shanghai, offer incentives for this technology, as it helps to reduce peak load on the electricity grid. Market trends With overall GDP per capita increasing annually and supportive government incentives, the demand for heat pumps in China is expected to grow steadily in the coming years. Firstly, the RAC market will continue to mature. The Chinese central government launched a large subsidy scheme in 2008 to encourage people in rural areas to purchase more home appliances. Under the scheme consumers can claim a 13 % rebate on systems they purchase. Currently in rural areas, the RAC ownership rate is still very low only 12,23 units per hundred households compared to 106,53 units in urban areas. This subsidy will benefit the air conditioning industry. The efficiency standards for the heating function of RACs is also set to increase. The Chinese National Institute of Standardization (CNIS) plans to use the Annual Performance Factor (APF) to evaluate RAC energy efficiency instead of the Energy Sanitary hot water 697 (1,5%) Air/air (reversible) ,2% Figure 7.4-3: Chinese 2010 market by type of heat pump, units. 138 Focus reports on selected markets China

141 Efficiency Ratio (EER) or the Seasonal Energy Efficiency Ratio (SEER) in the future. The new standard will set higher standards for the heating function of these systems. The sanitary hot water heat pump sector is booming in China and this is expected to continue, with a projected growth rate in the next 3 to 5 years of 25 % annually. CNIS is also developing an energy efficiency standard and associated label. Government incentives will support these products in replacing electric water heaters with the aim of achieving significant CO 2 reductions. Currently, most sanitary hot water heat pumps are installed in the south of China. Chinese manufacturers have developed systems that can operate at outside air temperatures down to 15 C or lower. However efficiency and costs are still barriers to these products meeting mass market requirements. Ground source heat pumps, as a recognised renewable energy source, will continue to get support from government. According to the 12th five year plan of China s Government, at the end of 2015, the annual building penetration of geothermal heat pumps will be more than 250 million m 2, which is 2,5 times that in Costs The table below shows the average cost for a household reversible air/air room air-conditioner and a heat pump water heater including the installation cost and the consumption tax. (1 Euro=9 CNY) Product Air/air (Mini-split) Air/water Price (Euro) Table 7.4-4: Air/air and air/water heat pump costs, China Brand names Ground source heat pumps: Fuerda, Climaveneta, Trane, Beijing Yongyuan, Yantai Landoc, Tsinghua Tongfang. Water/water chillers: Gree, Midea, Carrier, Daikin, Mcquay, York, Trane, M. Universe, Bright. Air/water heat pumps: Midea, Gree, Daikin, Tongyi, Jinjiang, Tianshu, Chigo, AO Smith, Tsinghua Tongfang, M. Universe. Air/air heat pumps: Gree, Midea, Haier, Chigo, Hisense, Aux, Daikin, Mitsubishi, LG, Samsung. National industry associations China Energy Conservation Association (CECA) set up the China Heat Pump Alliance (CHPA) in The CHPA aims to promote the development of the heat pump industry, especially for air/water heat pumps, which has no government support currently and for which the market is immature. Since 2008, the CHPA has been working with several sanitary hot water heat pump OEMs and the International Copper Association launched a market education campaign and held training seminars in more than 20 cities from 2008 to 2010 to improve the market awareness for this product category. The CHPA is also working closely with the national authority to prepare an appropriate incentive policy. The Chinese Renewable Energy Society (CRES) set up a ground source heat pump unit in 2006 and held several training courses for installers. They also provide technical support for their members. Focus reports on selected markets China 139

142 European Heat Pump Statistics OUTLOOK 2011 The Chinese Refrigeration and Air Conditioning Industry Association (CRAA) has a long history and its members are getting more and more involved in the heat pump business. They provide annual statistics for heat pump products, and also have technical test capability. Product labels CRAA Certification (since 2003) CRAA provides quality, energy saving, and safety certifications for several product categories including sanitary hot water heat pumps and chillers. Energy Efficiency Rating Labeling Program (since 2004) The Energy Conservation Labeling Program is widely used for many kinds of appliances and lighting products. Consumers have a preference to purchase products with high efficiency ratings. The efficiency standard and label for sanitary hot water heat pumps is currently under development and is expected to be completed by the end of Sources [1] China Industry Online. The definition of RAC in China is with cooling capacity less than 14 kw. [2] China Heat Pump Alliance. [3] China Refrigeration and Air conditioning Industry Association. Incentive schemes As a recognised source of renewable energy, geothermal systems qualify for subsidies from central and local government. For example, since 2009, ground source heat pumps installed in rural areas may qualify for a subsidy of 60 CNY/m 2 from central government. In Beijing the subsidy is 50 CNY. Many additional subsidies are also made available through Energy Supply Companies (ESCOs), which the government also supports. 140 Focus reports on selected markets China

143 8 FUTURE CITIES = HEAT PUMP CITIES? Background An important item on today s political agenda is Smart (electric) grids. There is wide agreement that an upgrade of today s dumb grids ( only delivering energy) to smart grids is necessary. Smart must be understood in a way that components in such a grid collect and distribute information on prices and usage patterns. This information can then be used via user independent automation or control systems to balance electricity supply and demand and consequently enable a more efficient and more cost effective use of electricity. If smart (electric) grids are the younger brothers of the Internet, they have another, much less known sibling the smart energy grid. An upgrade of the energy grid by smart communication and control components is expected to bring similar benefits towards the efficient use of energy. Its combination with the electricity grid will allow energy grids to serve as storage for intermittent electricity, mainly from wind and photovoltaics. Such low temperature / cold energy grids connect suppliers and users of thermal energy used for heating, cooling and sanitary hot water. Unlike district heating, they are run at temperatures around 10 C and thus need little or no insulation. Pipes and pipework are comparatively cheap. They balance the spatial distribution in supply and demand of energy. Waste heat, for example from power plants, solar thermal collectors or residential / commercial cooling activity is fed into the grid. The stored energy is available to users that require heating or sanitary hot water at the same time. As the required energy level does not match the temperature provided by the grids, heat pumps are an integrator technology for such applications. They can efficiently lift the temperature level of the water in the energy grid up to the required level, thus reversing the usual cascade of temperature levels in an energy flow. When used for cooling, they discharge energy to the thermal grid. Heat pump cities? Heat pump technology can be used in the majority of application fields in cities. Thus, cities could rely to a large part on using heat pumps to efficiently accommodate for the demand for heating, cooling and sanitary hot water and at the same time use renewable energy sources. This chapter will provide a short overview on the components of such a heat pump city. Each city has a set of different functional areas for:, living (residential buildings),, working (office, industrial buildings),, public services (school administration, sport buildings), and, public infrastructure including transportation. Most of the buildings in these areas require some kind of energy supply for heating, cooling and sanitary hot water, all of them have a connection to the electricity grid. Thus heat pumps are a natural technology to be used to fulfill this function. Future cities = heat pump cities? 141

144 European Heat Pump Statistics OUTLOOK Heat pumps in residential buildings 1a Heat pumps in singlefamily houses 1b Heat pumps in multifamily houses 2 Heat pumps in office and commercial buildings 3 Industrial use of heat pumps 3a Source for district heating 3b Process energy 4 Heat pump use in and for infrastructure 4a Subways/Tunnels 4b Sewage systems 4c Energy grid (district heating or cold source ) 5 The building structure as heat exchanger 5a Heat piles 5b Activated concrete 6 Heat pumps as storage for green electricity Figure 8.1: Application fields of heat pumps in cities. Heat pump application areas The idea of a heat pump city is used to explain the application potential of heat pump technology in a city (see figure 8.1). Heat pumps can be used individually or connected to an energy grid, operating stand-alone or in hybrid systems. They use energy from air, water, ground, exhaust air for stand-alone installations, electric or gas backup as well as solar thermal energy for hybrid systems. Heat sources for ground coupled heat pumps can be horizontal pipes or vertical drillings, trenches or wells. Similarly, underground parking garages or basement structures can be used. In larger construction, where several supporting concrete foundations are necessary, these concrete piles can be thermally activated thus transporting the heat from the ground to the heat pump (heating mode), or the heat from the building to the underground (cooling mode). Thermally activated walls and ceilings can also be used for cooling (see point 5 in figure 8.1). A special form of hybrid installation is the combination of a heat pump with PV where solar electricity is used directly to produce thermal energy, heating or cooling. This energy can be stored in the water storage and the building mass. Similarly, heat pumps can transform and store wind electricity as thermal energy (see point 6). Residential buildings (point 1): In single family houses (point 1a) energy demand can be covered by an individual heat pump or a heat pump based hybrid system with an output capacity of 3 20 kw, larger in multi-family houses. The use of heat pumps in the residential sector is possible today. A nearly unlimited number of design options exists and heat pumps can be applied in new and renovated buildings. The building envelope should however be built/renovated towards energy efficiency and should ideally be equipped with low temperature heating system! 142 Future cities = heat pump cities?