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Home GREEN

How heat pumps became an image of ‘green woke leftist technology’

Siftedby Sifted
January 16, 2025
Reading Time: 6 mins read
in GREEN, UK&IRELAND, VENTURE CAPITAL
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This article first appeared in Sifted’s climate tech newsletter, sign up here.

The heat pump market in Europe has taken off in recent years, with both new and established players entering the sector from various angles. Startups in Europe are working on everything from manufacturing and installation to streamlining behind-the-scenes processes and delivering integrated energy systems for customers.

All of this got investors excited a few years ago; they’ve pumped hundreds of millions of euros into heat pump tech since, and the market to replace the more than 90m gas and oil heaters in Europe with cleaner alternatives could be as big as €150bn.

Despite its recent traction, the market isn’t new across all of Europe. Heating homes and buildings using air-to-air, air-to-water or geothermal heat pumps has been common in the Nordics for decades — I didn’t even know what a gas heater was until I spent 10 years in London.

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The basic idea of a heat pump is that it doesn’t create heat but takes it from outside the home (even on cold days), and uses a liquid to bring it inside to warm up the house. Because they don’t create heat, heat pumps are around three to four times as efficient as gas boilers. For every unit of electricity they use, they can move three to four units of heat into your home.

Today there are around 24m heat pumps in Europe, which is the equivalent of removing the gas emissions of around 7.5m cars from the roads. In parts of Europe where governments are trying to limit the use of fossil fuels, we’ll need a lot more of them. Around half of all energy consumed in the EU is used for heating and cooling with fossil fuels (mostly gas) and heat pumps are seen as one way for the EU to achieve its carbon neutrality goal by 2050.

From 2027, the EU will also put a carbon price on the fuels used in buildings, road transport and other sectors and a dedicated share of that will go to a new financing instrument — a €68.7bn social climate fund — to support the roll-out of heat pumps across Europe.

The snag

Here’s the thing though. Whereas we saw rapid growth in the heat pump sector between 2021 and 2022, that progress has stalled recently — a combination of shifts in policy, cheap gas, expensive bank loans, fluctuating energy prices, a sluggish economy and pushback against climate initiatives has led to declining sales in several countries.

In the UK, for example, the price difference between gas and electricity “means that electricity costs are more than four times higher than gas, making heat pumps less economically attractive to consumers,” Simon Phelan, founder and CEO of UK energy startup Hometree, tells me.

Heat pump makers and installers are also up against government yo-yoing. In the UK, the government recently reversed its decision to ban the sale of gas boilers by 2035. And because the policy challenges currently favour gas over electricity, the heat pump market in the UK is still in its early stages, says Phelan.

In the UK there’s also a challenge to get all the energy needed for the mass roll-out of heat pumps on the grid during days of high usage. With a majority of houses using gas boilers, the shift to heat pumps has yet to add high pressure on the grid – but using electricity to heat houses would see a big increase in electricity demand, especially on cold days.

“When it is cold, countries that have more electrified heating with heat pumps, like France, have larger peaks in their electricity consumption than countries like the UK, which use predominantly gas for heating,” says low carbon energy expert Staffan Qvist.

“Sooner or later, heat pumps have to take over the majority of space heating to eliminate CO2 emissions. To do that in the UK, alongside electrification of transport, the power grid needs strengthening to be able to deliver the necessary electricity. This will be a challenge.”

The politicisation of heat pumps

In Germany on the other hand, heat pumps were politicised by the country’s far-right AfD party after the government introduced a law to phase out fossil fuel heating systems. The anti-heat pump movement plastered its message on billboards and in newspapers across Germany.

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“The heat pump used to be just an efficient heating system and then it acquired, for some reason, the image of a green woke leftist technology,” says Wolfgang Gründinger, energy giant Enpal’s chief evangelist.

“[AfD, the conservatives and FDP] were all against the heat pump. It was very strange because it was very easy to attack the greens on it and to have click rates and approval rates. This was just bizarre.”

Things are slowly changing on that front though. “Homeowners now realise ‘okay, it’s just an efficient heating system’,” Gründinger says.

Thomas Nowak, previous general secretary of the European Heat Pump Association and now head of public affairs and government relations at Swedish heat pump startup Qvantum, attributes the resistance to heat pumps across Europe to lobbying and fearmongering by fossil fuel associations.

According to the investigative journalism platform Desmog, the Energy and Utilities Association (EUA) has paid a PR firm to generate hundreds of articles to lobby the UK government on energy policy.

“There has definitely been a disinformation campaign paid for by the gas industry, where rumours have been spread that heat pumps don’t work when it is really cold, or that UK houses are fundamentally not fit for heat pumps,” Qvist says.

“Once common sense prevails and people realise heat pumps are the best solution for all of Europe, the market will be enormous. The ‘cake’ will be so big we won’t even be able to eat it all,” Nowak adds.

Germany and the UK are working on subsidy policies to make heat pumps more attractive to consumers. In Germany they can typically get 50-55% of the cost of installation paid for by the government, and in the UK there’s a £7.5k cash grant for installing one.

“That consumers can get £7.5k off the price of a heat pump is actually our highest performing ad”, says Pamela Brown, the CMO of Aira, a heat pump producer. “Just by advertising the government message seems to get people to make the switch.”

In the contest of oil boilers and heat pumps, the latter will win across Europe – even if it takes longer than it should. There are more than 30 startups in Europe working on heat pumps. I’ve mapped the key ones here.

Read the orginal article: https://sifted.eu/articles/heat-pumps-green-woke-leftist-technology/

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