Heat pumps will be the cheapest green heating option for consumers

The urgency of the challenge to mitigate the climate crisis will force all of us to change how we heat our homes: away from polluting sources like gas to greener and more efficient alternatives. According to a new study released by BEUC (The European Consumer Organisation) this week, heat pumps will be the cheapest green heating option for consumers. They will be both more affordable and convenient for consumers than hydrogen, which is the only other non-fossil fuel solution.


Goodbye gas: heat pumps will be the cheapest green heating option for consumers

The study – ‘Goodbye gas: why your next boiler should be a heat pump’ – looked at the cost of heating the two most typical homes (house/apartment) in Italy, Czech Republic, Poland and Spain with electric heat pumps, hybrid electric/hydrogen heat pumps and hydrogen boilers from 2025-2040.1

The result? Electric heat pumps emerged as the cheapest green heating option in all four countries in terms of the ‘total cost of ownership’,2 with heat pump-powered district heating a strong option for high density urban areas.3

BEUC Director General Monique Goyens commented:
“Millions of consumers in Europe today rely on fossil fuels like gas to heat their homes. The problem is that these are heavily polluting. The climate crisis means we’ll have no other choice than to find greener and more efficient alternatives to heat our homes. Fossil fuels also expose consumers to volatile energy prices, as they are experiencing the hard way at the moment.

“The good news is that the solutions are out there. Our research shows that for consumers across Europe, electrification – whether by a heat pump or district heating in cities – combined with energy efficiency improvements, will be much cheaper and convenient than hydrogen. Making homes more energy efficient will help consumers save considerably – be it by insulating walls in Poland or installing blinds on windows in Spain. What’s more, moving away from the volatility of gas prices will offer consumers more stability and predictability in their energy bills.

“But let’s face it, the transition to heat pumps is still too difficult. Consumers face big up-front investment costs and issues with installation. As such, it is crucial that public authorities provide financial support to allow consumers to invest in a heat pump and energy efficiency improvements in their homes. It’s just as vital that consumers aren’t pushed into investing in expensive experiments, like hydrogen. Authorities must instead allocate public money to proven technologies instead of over-hyped and unproven ones likes hydrogen”.

Main findings:

  1. Electric heat pumps are the cheapest green heating option for consumers. Renewable district heating is also competitive in urban areas. Hydrogen boilers and hybrid heat pumps (hydrogen/electric) are the most expensive option and hydrogen will be more expensive than gas is today
  2. In cold climates, major home energy efficiency improvements deliver big financial benefits, helping to reducing energy bills. This applies in all four countries, helping to keep homes warm in winter. In warm climates, shading (e.g. the use of blinds) can cut consumption and improve comfort
  3. ‘Smart heating’ (e.g. when it’s cheaper at off-peak times) with heat pumps will reduce consumers’ heating costs by up to 25% compared to gas. This is because using electricity smartly reduces the need for investments in electricity grids. The savings could help reduce grid charges on energy bills
  4. If national governments roll out ambitious home renovation programmes, allowing many consumers to improve the energy efficiency of their homes, this could also mean lower grid tariffs (and energy bills) for all if savings are passed on to consumers
  5. But to be able to reap the benefits of lower energy bills, consumers will need financial support to help purchase a heat pump and pay for energy efficiency improvements.

More information

1 This period was chosen as it is when residential heating legislation currently being revised or due to be will enter into force. 15-20 years is also the average lifetime of a heating appliance.
2 Includes: cost of energy generation, cost of operating and upgrading energy networks, building insulation and purchasing/installing the appliances.
3 District heating distributes heat through pipes to multiple buildings, meaning consumers do not need to have their own individual heating systems. District heating powered by heat pumps is a promising option: it offers extra efficiency gains although is still in the early stages of development.


External link

6 thoughts on “Heat pumps will be the cheapest green heating option for consumers

  1. The report is somewhat one-dimensional: looking only at the cost of HPs. In the real world:
    1. Some houses do not have space for HPs.
    2. Houses gas boilers & micro-bore piping for existing rads ( a feature of many houses post 1980) have to rip all that out because it does not work with HPs.
    3. Green H2 is cost competitive at a retail level with nat gas – right now and even down to a Nat gas price of circa Euro40/MWh. (based on elec costs of circa Euro35/MWh)
    4. Smart heating implies HPs that need to be oversized (to get the HH back up to a comfy temp asap), this costs more (see also next comment).
    5. Most North European LV distribution networks cannot support HP penetration much past 35% (notice the word: “most”).
    6. The 35% penetration assumes well insulated households.
    7. EV charging will compete with HPs for network capacity – it will be one or the other – not both.

    All the above is based on an engineering viewpoint, rather than a comparison of HPs vs other devices, & which is cheapest. The issue is far far more complex that than. To decarb residential heating requires a hybrid approach – fuel-cells plus HPs with the generation that fuel cells bring being embedded exactly where it is most needed: in the LV network.

    1. You’re right but it was so important to get BEUC come out so strong this way. This was quite a shock to me to see this. But, I certainly hope people scroll down to read your comment. It is important

  2. Rod, I am curious to know quite why you think it is “important” that BEUC publishes a document that appears to ignore all the important issues that Mike Parr raises in his critique (above)?

    1. We tried before for BEUC to take any position on energy efficiency and they always said they didn’t have the capacity to do it. I have no idea who wrote the report. They obviously didn’t have someone of the quality of Mike Parr. But to me getting them to be positive about heat pumps is an important step.

  3. The main problem with air-source heat pumps is that below a certain ambient temperature (29 degrees fahrenheit in our case) the heat pump cannot operate and the electric resistance heating in the furnace switches on instead, costing all the economic, efficiency and emissions advantages unless the power is renewable. So air-source heat pumps have to be carefully calibrated to the prevailing regional winter temperatures. Ground-source heat pumps don’t have that issue, but are dramatically more costly to install.

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