Paul Kenny, Director General, European Heat Pump Association

– Unlocking Ireland’s Heat Pump Potential – A Deep Dive with Paul Kenny

Following the release of the European Heat Pump Association’s annual market report, Director General Paul Kenny spoke with ROBBIE COUSINS. They discussed the latest data and trends, highlighting key areas that Ireland needs to address to unlock its full potential for heat pump adoption.

The number of heat pumps installed per capita in a country ranges significantly across Europe, according to new data from the European Heat Pump Association. This indicates that there is still significant potential for a broader rollout. Paul Kenny, Director General of EHPA, says the findings in the market report are not a surprise, as the body closely follows trends in the heat pump market and maintains continuous contact with its members. “There has been a slowdown, which we’ve now seen for the past two years, since the record high sales in 2022, has several causes. At the EHPA, we are actively working to promote solutions that will put the sector on track. “These causes include stable support schemes for consumers – examples being Italy and Poland, where support schemes have been hugely restricted or even put on hold, which has hurt sales. Counterexamples are the UK and Ireland, where steady subsidies have boosted sales, bucking the overall European trend. “Another key aspect to boosting heat pump demand is moving taxes off electricity bills to make electricity more competitive with gas. Electricity needs to be at most double the price of gas to make the running costs of a heat pump, which is several times more efficient than a fossil fuel boiler, the more affordable option. Yet this is the case in very few European countries. Focusing on the training of heat pump installers is also essential, as many thousands more are needed. “Overall, the EHPA is confident about the future. Europe needs to decarbonise its heating system, including industry’s process heat, and heat pumps, large and small, are the best way to do this. Plus, installing more heat pumps brings the huge added benefits of providing European manufacturing and jobs, as well as getting free of fossil fuel imports from places like Russia.”

Making EU measures stick

Many needed EU measures are already in place. The EU has set a target of 60 million heat pumps by 2030 and aims for climate neutrality by 2050.  Paul Kenny says, “The EU has introduced many laws to boost renewables, phase out the use of fossil fuels in buildings, and increase energy efficiency. We now need to ensure European governments implement those EU laws. What’s more, they must invest to help households make the switch to heat pumps – for example, via the upcoming carbon price on buildings, which will provide millions of Euros in public revenues – that they offer steady support schemes for consumers and that electricity is competitive with fossil fuels.”

More measures needed in Ireland

Ireland sits fifth in the table in terms of heat pump market deployment per 1,000 homes in Europe. This demonstrates the commitment of multiple governments to transition Ireland’s heat demand from imported fossil fuels to indigenous renewable electricity supplied by heat pumps.

Paul believes this is a remarkable turnaround, demonstrating to other countries that consistent long-term policy can dramatically alter the trajectory of heating systems.

“Ireland’s new build market has transitioned to clean heat, predominantly individual heat pumps, with a small number of heat pump-based multi-unit heating systems installed. This will grow as Ireland scales its new-build housing, a key requirement for Ireland’s growing population.

“On the replacement side, a strong growing demand from renovation, supported by generous grants from a rising carbon tax, is being held back by lengthy, confusing and costly customer journeys. The national energy agency is seeking to fix this, balancing it with ensuring that customers do not end up with high bills from undersized heat pumps or excessive heat demand from poorer buildings.”

He believes that the Irish government could still be doing more to encourage the adoption of heat pumps and renewables.

“There are several key things that the government need to do.

“One, there is a need to streamline the customer journey. Currently, customers must engage an assessor before embarking on a heat pump journey, potentially incurring unnecessary and costly upgrades to their home to make it heat pump-ready. This makes the potential of emergency replacement when a boiler breaks impossible. Some progress has been made in exempting homes post-2007. However, this should be extended earlier, and potentially much earlier, with some basic checks.

“Secondly, there is a clear need to increase the number and skill levels of installers. Ireland has been exploring various innovative solutions, with some positive results emerging.

“The government also needs to invest in widespread consumer engagement through marketing and communications to avoid misinformation reducing the sales of heat pumps.

“Finally, like many European countries, Ireland’s electricity regulator needs to do more to pass on the benefits of the large investment in renewable electricity. Flexible tariffs that encourage heat pumps to utilise lower-priced electricity will enable significant savings to householders using heat pumps.”

European potential

The EU has a target of 60 million heat pumps by 2030, which appears in the European Commission’s impact assessment for the 2040 climate targets.

Paul explains that the EHPA’s data release indicates significant potential across Europe to increase demand.

“The top country, Norway, has 632 heat pumps installed for every 1,000 households, closely followed by Finland at 524. What’s more, sales in those countries are still strong, with 48 heat pumps sold for every 1,000 households in 2024 in Norway, and 33 in Finland – the highest levels in Europe.

“On the other end of the scale, around 3.5 heat pumps were sold for every 1,000 households in 2024 in the UK – 14 times less proportionately than Norway. The UK now has a stock of 19 heat pumps per 1,000 households. The UK market, however, is one of only three in Europe to have grown last year, along with Ireland and Portugal, thanks to a steady support scheme for consumers.

The difference between ‘low’ and ‘high’ countries indicates that there is still massive future growth to tap into. To boost demand everywhere, electricity prices must be more competitive, good long-term support schemes must be implemented, and installers require training. Hence, buying a heat pump is affordable and easy.”

Skills gaps

He says that while Ireland has worked on improving skills with a range of courses available, some subsidised and some where the installer is paid to train, further incentivising the uptake of training courses, coupled with demand stimulation, will increase the number of installers available.

Growth areas

Most heat pumps are installed in new-build homes. However, new build rates are closely linked to the economy, and economic slowdowns resulted in nine countries recording falling construction indices in 2024 (of more than one percentage point) compared to 2023. But, five countries saw increases (of more than one percentage point).

“EU building permits for dwellings have been in continuous decline since 2021. However, laws mandating high energy efficiency standards for new buildings benefit heat pumps more than other technologies in the new-build market.

“While we know that industrial and commercial use of heat pumps is growing, and the potential is massive, EHPA does not gather sales data. It is key to raise awareness of the opportunity offered by industrial and commercial heat pumps, including the reuse of waste heat.”

Heat pump popularity

Ireland’s commercial sector has a high share of heat pumps in commercial heating systems, driven by the need for cooling, demand for A-grade offices, and renovation regulations, which have pushed up the market share of heat pumps.

“In new build, driven primarily by regulation, the market is dominated by air-source heat pumps. In renovation, heat pumps have a lower market share than boilers, with the cost of installation and challenging customer journeys being the key issues.”

Future sales

Paul Kenny explains that the EHPA expects Ireland to continue to grow in the medium term. It is likely to reach 50,000 units within the next year or two, with 100,000 units possible if government housing-building and renovation targets are met by 2030.

“Ireland has been the poster child for the turnaround in renewable heating, from the last large country in the EU in 2018, to a significantly rising market share. A clear plan, clear targets, effective regulation for new homes and a clear funding programme for renovation have made this change possible.

“Streamlining the customer journey, expanding skills and consumer knowledge would have a large impact and potentially allow Ireland to become Europe’s next best pump-lead market,” Paul Kenny concludes.