McKinsey & Company says in its new report that the payback times of heat pumps can decrease by up to 38% by 2030.
“The attractiveness of each investment (measured by payback period) is likely to increase as EU industry expands and reduces production and installation costs,” said the global management consultancy.
The analysis examines three price scenarios, using a German detached house as an example. A “high commodity price” scenario, a “high gas but average electricity price” scenario, and a low commodity price scenario where gas prices return to historical averages and electricity prices reach new lows.
Both heat pumps and rooftop solar have the longest payback periods in the low electricity price scenario, but it also decreases sharply between payback periods between 2022 and 2030. Payback times for heat pumps may decrease by 38% from 17.1 years in 2022. to 10.6 years in 2030. The payback period for rooftop solar could decrease by 31% from 12.6 years in 2022 to 8.7 years in 2030.
Heat pumps have the shortest payback times in the “average electricity price” scenario. The payback period may be reduced by 28% during this time. Average payback periods for rooftop solar could drop from 9.2 years in 2022 to 5.8 years in 2030.
Rooftop solar has the shortest payback times in the “high power price” scenario. It could decrease by 34% from 8.2 years in 2022 to 5.4 years in 2030. The payback period for heat pumps could decrease from 15.1 years in 2022 to 10.3 years in 2030, which is 32% less.
“These payback periods (and thus household energy costs) may decrease further due to lower electricity costs as the electricity system becomes decentralized and decentralized (lower costs during peak hours),” McKinsey & Company said.
The new study focuses on three initiatives that are said to have the greatest potential to significantly improve the energy efficiency of EU buildings: increasing rooftop solar and heat pump installations and improving building insulation.
It states that annual deployment of rooftop solar will need to be around 33GW to meet the EU’s Fit-for-55 and Repower EU targets, compared to a record 22GW in 2022 and an average of 10GW over the past four years. .
“Heat pump deployment must also continue to grow at 12.5% annually until 2030 to meet the RePowerEU target of 54 million heat pumps by 2030,” the authors say. At the end of 2021, Europe had reportedly installed 15 million heat pumps, and McKinsey estimates an additional 2.5 million installations in 2022.
The consulting firm suggests five key factors to catalyze these changes: improving workforce skills, creating appropriate incentive mechanisms, attracting finance and private capital, investing in network infrastructure, and creating net and circular supply chains.
The upcoming March edition pv magazine includes an extended article from the authors of the McKinsey report on the outlook and competitiveness of the European solar energy industry.