Heat Pump

A heat pump is an energy-efficient device that transfers thermal energy using refrigeration to move heat from a warmer space to a cooler space and vice versa. It extracts heat from its surroundings, such as air, ground, geothermal sources, nearby water, or even waste heat, and amplifies it for transfer to the designated location. It is superior to the traditional fossil fuel-run heating system in terms of efficiency, operating costs, and climate-friendliness.

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Why do we need heat pumps?

Fossil fuels still make up 63% of the energy used to heat buildings globally. This share has only gone down by 4 percentage points since 2010. In 2022 alone, emissions from heating buildings added up to around 4.2 gigatonnes (Gt) of carbon dioxide – that’s 2.4Gt of CO₂ directly from the fuel combustion within buildings and about 1.7Gt of CO₂ from indirect emissions attributed to external electricity and heat production. These heating emissions make up more than 80% of all the CO₂ released directly from buildings. 

Heat pump vs gas boiler

Energy efficiency: a heat pump can deliver 300%-500% more heat than the electricity it uses, while the top gas boilers have an efficiency of around 90%, meaning some energy will always be lost. 

Energy source: heat pumps are powered by electricity, which is becoming less and less dependent on fossil fuel supply chains and can lead to carbon-neutral electricity. Gas boilers, on the other hand, rely on burning natural gas, which causes high carbon emissions.

Environmental impact: when powered by renewable electricity, a heat pump can reduce green gas emissions by up to 80% compared to gas boilers, which produce around 2.2 tonnes of CO₂ per year.  

Installation costs: heat pumps have higher upfront costs (that’s why EU governments offer subsidies), but the long-term savings can offset the initial investment through reduced energy bills. Gas boilers have lower upfront costs but their gas consumption makes them more expensive to run, increasing their lifecycle costs. 

Lifespan: heat pumps, when maintained properly, last up to 20 years as the absence of combustion reduces maintenance and repairs. Gas boilers, on the other hand, generally have a lifespan of 10-15 years, which is highly dependent on regular maintenance.

Noise level: newer heat pump models have improved sound insulation to minimize noise levels, while gas boilers operate quietly. 

Safety: heat pumps operate without combustion, eliminating the risk of carbon monoxide emissions. Gas boilers operate with combustion, posing inherent safety risks. 

Heating capability: heat pump’s high efficiency may be reduced in extremely cold conditions, but improved heat pumps can handle cold temperatures (two-thirds of Norwegian households have heat pumps installed). Gas boilers still function well in extreme sub-zero conditions.

Usage: heat pumps can provide both heating and cooling, acting as air conditioners during warmer months, while gas boilers are only used for space heating and hot water. 

Heating and cooling

With the reasons mentioned above, heat pumps replace fossil fuels and reduce dependence on imported gas for space and water heating. 

A typical household heat pump has a coefficient of performance (COP) of about four, meaning its energy output surpasses the electrical energy used to power it fourfold. But they also go beyond heating.

An air conditioning system, depending on its size, requires up to 440 kWh hours annually. This means that the widespread use of air conditioners simultaneously draws a vast amount of electricity, potentially straining power grids to their limits. Moreover, conventional air conditioners use fluorinated greenhouse gases as cooling agents – they have  a greenhouse effect up to 24,000 times greater than carbon dioxide. The EU aims to reduce the emissions of fluorinated greenhouse gases by 80% by 2030, making alternative cooling agents or systems essential.

According to Till Sonnen, gridX’s Business Development expert, “people often overlook a much more sensible and sustainable technology for room air conditioning, which can efficiently cool and serve as a year-round heating solution: the heat pump. It’s truly an all-rounder among heating systems,” he says. Despite its potential, not many non-experts are familiar with the fact that heat pumps have the capacity, at least in theory, to provide heating and cooling on a national level.

Types of heat pumps

The air-source heat pump (ASHP) has two types: air-to-air and air-to-water. Air-to-air (ATA) heat pumps are not so different from your typical air conditioner. The only difference is that, aside from cooling, they can also heat up the space, which can even be connected to a hot water tank. In contrast, air-to-water (ATW) heat pumps heat up radiators, underfloor heating, and hot water in a wet central heating system – a central heat source that produces hot water, which is then distributed in the property. 

A ductless air-source heat pump offers efficient heating and cooling for homes without ducts. Its reverse circle chillers generate hot/cold water for radiant floor heating systems. 

‍A geothermal heat pump, also called a ground-source heat pump (GSHP), transfers heat between the house and the ground or a water source nearby.

A hybrid heat pump (HHP) is a heating system that involves both a heat pump and an additional heat source. Typically, this includes combining a heat pump with a fossil fuel boiler (gas or oil), which can be existing or installed alongside the heat pump.

An absorption heat pump (AHP) is more complex by nature and a relatively new technology. They use heat or thermal energy, which comes from a wide variety of heat sources, such as combustion of natural gas, steam, solar-heated water, air or geothermal-heated water. 

A domestic hot water heat pump, otherwise known as a sanitary hot water (SHW) heat pump, only heats domestic hot water (kitchens, bathrooms, and laundries) with electricity to generate heat from the environment. This saves up to 70% of energy, significantly more efficient and economical than conventional heaters. 

How does a heat pump work? 

A heat pump system has three important components: the outdoor unit (evaporator), the indoor (condenser), and the refrigerant—the refrigerant cycles between the outdoor and indoor units, transferring heat. 

The evaporator harnesses energy from renewable sources (air, water, waste heat, or geothermal) by transforming liquid into gas. And then, as the compressor compresses the gas, its temperature rises, and the recovered heat can be used for the heating system.

Cooling with heat pumps can be divided into active and passive cooling: active cooling involves using the compressor and a reversible refrigeration cycle, typically possible with any type of heat pump. 

On the other hand, passive cooling extracts excess heat from the building’s interior and dissipates it into the cooler ground or groundwater using a circulating pump. This method works only with ground or groundwater-based systems.

The benefits of heat pumps

For consumers

End users enjoy cost savings with heat pumps, as they reduce the total cost of ownership (TCO) compared to the constantly escalating costs of gas boilers. Optimizing heat pump usage, for example by integrating them with photovoltaic systems or using time of use tariffs (ToUT), further maximizes consumers’ savings. 

And to further help consumers, governments across Europe offer a number of heat pump subsidies to lower the initial purchase costs of this future-proof technology and accelerate the heating transition away from natural gas and oil.

On top of the long-term financial benefits, heat pumps align with the pressing need for a more sustainable way of life.

For energy providers 

The electrification of heating offers huge potential for energy providers to extend their offering and provide end users with holistic home energy solutions. Heat pumps are also highly cost-efficient. 

The inclusion of heat pumps in energy suppliers’ portfolios holds immense potential, considering that only 13% of surveyed German suppliers presently provide them to their customers. 

Verivox states that an average single-family consuming 20,000 kWh of natural gas spends about €2,100 annually. However, opting for an efficient heat pump with a COP factor of 4 would significantly reduce costs, bringing it down to €1,451 per year.

Opening up new revenue streams and using future-proof technology that is growing exponentially is a major motivation for energy providers to include heat pumps in their portfolio.

For real estate companies and property developers 

Real estate companies and property developers gain a competitive advantage by incorporating energy-efficient buildings into their portfolios. Buildings designed with energy-efficient features and sustainable technologies like heat pump-solar integration lower operational costs for residents. Plus, with the growing emphasis on environmentally-friendly practices, aligning with Environmental, Social, and Governance (ESG) principles makes property developers more appealing to socially-conscious investors and consumers.

For governments

Across the world, most buildings still heavily rely on fossil fuels for space and water heating. However, heat pumps present a highly efficient and climate-friendly alternative, offering cost savings for consumers and a pathway for countries to decrease their dependence on imported fossil fuels. When integrated into energy systems and controlled intelligently, they help to stabilize power grids on a large scale.

Heat pump market in Europe 

EU countries are finalizing a 42.5% renewable energy target by 2030. With this, governments roll out subsidies to encourage private and public stakeholders to switch to distributed energy resources.  

The European heat pump market is constantly rising. Installations surged in 2022, reaching 3 million units, marking a significant 38% year-on-year growth. This upward trend continued from the previous year’s 34% increase, which exceeded the projected annual 10% growth.  

Growth in the heat pump market

• Germany targets 500,000 heat pumps installed annually from 2024 onwards.
• France aims to reach a total of 2.7 million to 2.9 million heat pumps installed by the end of 2023
• Belgium witnessed a significant growth of 118%, while Poland and the Czech Republic are not too far behind at 112% and 105.9%, respectively in 2022.

Heat pump subsidies across Europe

• Germany: up to 25% of the investment costs of installing a new heat pump are covered, in the case of a GSHP up to €18,000
• The Netherlands: the government offers an average subsidy of 30% of the purchase price of a new heat pump. 
• Austria: the government provides grants of up to €5,000 for single-family homes and €1,000 for multi-story homes for air, water, or ground-source heat pumps.
• Croatia: the government provides a subsidy of up to 40% for ATW, GSHP, and SHW heat pumps, or up to 80% in less economically developed regions.
• Denmark: the government rolls out different grants and tiers up to €4,572.9 for new and renovated buildings for ATW and GSHP.
• France: up to €15,000 for renovated single-family houses from 2020 to 2024
• Lithuania: the government offers grants of up to €14,500 for new and renovated single-family houses with ATA, ATW, GSHP, HHP, or SHW. 

Using heat pumps for self-sufficiency optimization

Heating decarbonization is accelerated by self-sufficiency optimization. This is achieved by integrating the heat pump with a photovoltaic system to maximize the amount of locally-generated renewable electricity that powers domestic heating. In more advanced use cases, the heat pump can store surplus solar energy as thermal energy to be used later when the sun is no longer shining, thereby boosting homeowners’ self-consumption and self-sufficiency. 

Electricity flows between assets can only be optimized with an intelligent home energy management system as the foundation. “Integrating a photovoltaic system with a battery storage system and a heat pump not only promotes the consumption of locally generated, eco-friendly electricity but also reduces dependence on conventional grid electricity,” explains Sonnen, gridX heat pump expert. 

To further minimize energy costs, heat pumps can be programmed to operate during low-price periods using dynamic electricity prices. “Relying extensively on heat pumps with self-produced sustainable electricity can significantly reduce electricity bills, as the consumption of self-generated and cost-free energy rises, while guaranteeing occupants thermal comfort at all times,” says Emeline Georges, gridX’s Techlead Rule-based EMS. 

Heat pump control

Heat pumps add large and, to some extent, flexible loads. However, they must be connected to a meter in order to be monitored. In addition, standards and protocols are required to facilitate the smart operation of heat pumps. 

1. EEBus communication protocol: facilitates seamless communication between energy devices, regardless of their manufacturers or underlying technologies.
2. SG Ready: a label certifying that a heat pump or a complimentary management technology can respond to defined external control signals.

The gridBox supports smart grid-ready (SG-Ready) heat pump control, commonly achieved through serial contacts or specific protocols. An I/O extender must be integrated to handle the interface between the gridBox and the heat pump pins. The heat pumps are then controlled via the digital output ports of the I/O Extender.