When will heat pumps have their solar moment?

BNEF named them the third scalable climate technology after wind and solar. The IEA says they could cut global CO₂ emissions by 1.5% annually by 2030. In Europe, the ambition is clear: 60 million heat pumps by 2030, up from around 45 million today. By 2050, the goal is 90 million. That’s big. But the path is far from smooth.

Unlike solar panels or batteries, heat pumps won’t see massive price drops from R&D or learning curves. They are relatively simple electro-mechanical devices, and the manufacturing process is already quite optimized. Today, they’re still up to 5x more expensive than gas boilers—and that won’t change much. So if you’re waiting for a breakthrough innovation to make heat pumps cheap, don’t hold your breath.

Instead, three things will shape how fast we get to 60M:

🏛️ Government support schemes (subsidies, tax credits, mandates)

⚡️ The ratio of gas to electricity prices (the “spark spread”)

🏗️ The pace of new housing construction and renovation

Right now, too many companies in the space are built around short-term government support. And while that may be necessary to kick things off, it’s not sustainable. Long-term deployment will only work if the economics make sense to households.

That means two things:

💸 Cheaper electricity relative to gas,

💰 Better financing options that reduce the upfront pain.

How can we achieve that without government policy? The only available option I see is Virtual Power Plants (VPP). They can bring enough electricity price flexibility to the customer so they can enjoy lower heating bills. And they can reach a big enough scale to leverage big enough and cheap enough long-term capital, to finance massive installations of heat pumps

If you want heat pumps to scale like solar—don’t just bet on policy. Fix the payback. And if you are working in the heat pump sector or looking to invest in it - reach out, I’ll be happy to chat!

Image credits: https://warmichko.com