- Existing heat pumps avoided around 53 billion cubic metres (Bcm) of gas consumption across Europe, China and Japan last year.
- Global sales stabilised in 2025 and are expected to more than double by 2035 under policies already announced or in preparation.
- Britain’s central obstacle is economic rather than technical, with high electricity prices and installation costs weakening the case for switching from gas.
Heat pumps displaced approximately 53 Bcm of gas across Europe, China and Japan in 2025, illustrating the technology’s growing contribution to energy security as well as emissions reduction, according to the International Energy Agency (IEA).
Without the installed heat pumps, gas demand for heating buildings would have been more than 10% higher in Europe and about 35% higher in both China and Japan, the IEA found in its first Heat Pump Monitor.
The avoided consumption increased from approximately 50 Bcm in 2024. For comparison, the larger figure is equivalent to a substantial share of the LNG historically imported into Europe from Qatar in a normal year.
Heat pumps met about 12% of global space-heating demand in 2024, although their contribution to all forms of heating was only around 5%. Adoption varies widely between countries because of differences in building stock, electricity prices, gas availability and government support.
Global sales weakened in 2023 and 2024 after reaching a peak during the energy crisis, but stabilised in 2025 and continued to grow during the first quarter of 2026. Sales in Europe increased at a double-digit rate last year, following a steep contraction in several markets as subsidies changed and gas prices eased.
Under policies already implemented or in advanced preparation, the IEA expects annual sales to more than double between 2025 and 2035. Heat pumps would then provide around one fifth of global space heating, although that trajectory remains below the level required for a net-zero energy system.
The IEA’s findings also challenge the view that electrifying heating necessarily creates unmanageable electricity peaks. Heat pumps accounted for between 2% and 16% of peak demand across major markets in 2024. Thermal storage, digital controls and time-of-use tariffs can shift part of that load away from periods of system stress.
The industrial opportunity is less developed. Commercially available heat pumps could technically supply about 20% of global industrial heat demand, particularly in food production, chemicals and other processes requiring low or medium temperatures. Actual deployment remains minimal because of high capital costs, limited familiarity and the complexity of integrating new equipment into existing plants.
Sectoral challenges
Manufacturing is comparatively localised. More than 70% of heat pumps sold in each major market were sourced domestically in 2024, while global manufacturing capacity reached approximately 145 GW a year. China accounted for about 35% of that capacity, followed by the US with 25% and the EU with 20%.
The sector has expanded employment by approximately 50% since 2015, but shortages of trained designers and installers are becoming a constraint. Poorly specified or installed systems can produce higher bills and damage consumer confidence, making workforce quality as important as manufacturing volume.
Britain exemplifies the remaining economic challenge. UK heat pump sales reached a record 125,000 in 2025, up 27%, according to the Heat Pump Association. Sales figures cover more than subsidised domestic retrofits, however, and fewer than 2% of UK homes are currently heated using the technology.
The Climate Change Committee has identified Britain’s unusually high ratio between electricity and gas prices as one reason deployment remains weak. Under the April to June 2026 price cap, electricity cost approximately 4.3 times as much per kilowatt-hour as gas. A heat pump’s greater efficiency can offset much of that difference, but the resulting saving may be too small or uncertain to justify the initial investment.
Equipment can cost two or three times as much as conventional heating technology, while installation expenses may equal or exceed the price of the heat pump itself. Grants can address the upfront gap, but do not correct the underlying price signal.
The report consequently reframes heat policy as an energy security intervention. The installed fleet is already removing gas demand equivalent to that of a sizeable importing country.
For the UK to capture a larger share of that benefit, stable grants will help – but rebalancing policy costs between electricity and gas, improving finance and building a dependable installer base are likely to matter more than announcing another deployment target.
