According to the UK’s Center for Energy Research, the total cost of air source heat pumps could drop by 20 percent by 2030. Non-equipment costs can decrease by 30 percent, while equipment costs can decrease by 17 percent.
The researchers focused only on total installed costs and did not analyze data related to lifetime or operating costs, nor the broader costs or benefits of the energy system. They collected over 550 individual data points from three main categories of cost metrics: one-year costs, experience rate (cost trends), and percentage cost reduction. Although a significant amount of data was obtained from outside the UK in the cost trend analysis, the one-year cost and cost saving data is mainly focused on the UK.
Results based on percentage cost reduction data show an average reduction in total installed cost of 20% by 2030, 31% for non-equipment costs, and 17% for equipment costs.
The one-year installed cost results show that the total installed cost has remained relatively stable over time. The average decreases of both air and ground source heat pumps have been very modest between 2010 and 2030. The study sets the value of air source heat pumps at 5%, but the exact value of geothermal heat pumps is not mentioned. The median cost reduction from the beginning of the 2020s to the beginning of the 2030s is estimated to be about 24%, from 11,000 euros ($12,000) to 8,400 euros for air source heat pumps and from 16,700 euros to 15,700 euros for geothermal heat pumps. .
According to its Heat and Building Strategy, the UK government aims to reduce heat pump installation costs by at least 25-50% by 2025. It also aims for cost parity for heat pumps and gas boilers by 2030 in overall purchases and boilers. running costs.
The report’s authors estimate that achieving cost parity in the installation costs of air-source heat pumps would require a 70 percent reduction, assuming current costs of £3,000 ($3,730) for gas boilers and £10,000 for air-source heat pumps.
“A reduction in total installed costs of 70 percent by 2030 is more than three times greater than our estimate of an average cost reduction of 20 percent and nearly double the highest single figure of 38 percent,” the researchers said.
However, they noted that extending heat pump grants and loans such as the Boiler Upgrade Scheme to cover most UK plants could significantly reduce this gap, reducing the percentage required to achieve cost parity to around 40%.