UK Heat Pump Sales Reach Record High in 2025

Record 2025 sales show promise but fall short of 2030 targets

Heat pump sales in the UK reached 125,037 units in 2025, according to data released by the Heat Pump Association (HPA) UK on 12 February 2026. This represents a 27% increase from 2024 figures and marks the highest annual total on record. However, industry leaders warn that current growth rates remain insufficient to meet government decarbonisation goals.

The Warm Homes Plan sets a target of 450,000 installations per year by 2030. Achieving this will require a compound annual growth rate of 33% from current levels. Meanwhile, 2025 sales account for just 28% of the annual volume needed in five years’ time.

Charlotte Lee, Chief Executive of HPA UK, welcomed the progress but stressed the need for sustained momentum. She called for the swift publication of Future Homes and Building Standard Regulations, alongside reforms to electricity pricing that currently make heat pumps less attractive to many households.

The 2025 figures include 110,353 hydronic units, with notable increases across categories. Air-to-water monobloc systems grew by 26%, while ground-source and water-source models rose by 32%. Domestic hot water heat pumps saw the strongest growth at 36%.

Manufacturing growth supports domestic supply chains

British-made heat pumps accounted for 36% of 2025 sales, an increase from the previous year. This shift supports domestic manufacturing capacity and could create up to 55,000 jobs in production and export sectors.

The expansion of UK manufacturing offers supply chain resilience at a time when European heat pump sales dropped 22% across 19 markets in 2024. Domestic production also reduces exposure to international supply disruptions and import costs.

Paul Kenny, Director General of the European Heat Pump Association, described the UK market as an inspiration to EU countries. He highlighted the Warm Homes Plan as a policy framework that other nations might emulate.

Nevertheless, the UK still lags behind European neighbours in market penetration. British households have approximately 19 heat pumps per 1,000 homes. In 2024, the UK installed 3.5 units per 1,000 households, compared to Norway’s rate of 48 per 1,000.

Policy incentives drive adoption but barriers remain

The Boiler Upgrade Scheme continues to provide grants for heat pump installations, reducing upfront costs for homeowners. This support has contributed to year-on-year growth since the scheme launched. However, several structural barriers continue to slow adoption.

Electricity prices in the UK remain significantly higher than gas prices per unit of energy. This pricing disparity makes running costs less competitive for heat pumps, despite their superior efficiency. Industry groups have repeatedly called for reforms to rebalance energy levies and taxes.

Regulatory uncertainty also affects market confidence. Developers and installers await final details of building standards that will govern new construction and major renovations. Clarity on these requirements would allow businesses to plan investments and training programmes.

Jess Ralston, an analyst at the Energy and Climate Intelligence Unit, framed the issue in energy security terms. She noted that rejecting heat pumps means continued reliance on gas boilers increasingly fuelled by imports. North Sea gas production is projected to decline sharply, with imports expected to rise by 60% by 2035.

European context reveals scale of challenge ahead

The UK installed 3.5 heat pumps per 1,000 households in 2024. This compares to a European average that demonstrates substantial room for growth. France installed 621,776 units in 2022, while the UK managed 55,000 in the same period.

Norway leads the continent with adoption rates 14 times higher than Britain’s. However, Norway benefits from lower electricity prices due to abundant hydropower, making heat pumps more economically attractive from the outset.

Across Europe, 19 countries saw a combined 22% drop in heat pump sales during 2024. This decline reflects economic pressures and reduced consumer confidence following earlier years of rapid expansion. The UK’s continued growth therefore stands out in regional terms.

Even so, European installation rates highlight the distance the UK must travel to reach its 2030 goal. The target of 450,000 annual installations would represent roughly 12.5 units per 1,000 households, assuming steady housing stock growth. This remains below leading European nations but would mark a substantial improvement.

Growth rates tell a story of slowing momentum

Sales grew by 56% in 2024, then by 27% in 2025. This deceleration suggests the market may be approaching a plateau under current conditions. Reaching 450,000 installations by 2030 requires reversing this trend with accelerated growth.

Several factors contribute to the slowdown. Homeowners who were early adopters and most responsive to grants have already made the switch. Reaching mainstream households will require different messaging, financing options, and installer capacity.

The supply chain for installation services also faces constraints. Training sufficient numbers of qualified installers takes time, and competition for skilled labour affects other construction trades. Expanding training programmes will be essential to support higher installation volumes.

Consumer awareness remains patchy. Many homeowners still lack accurate information about running costs, performance in UK climates, and suitability for different property types. Addressing misconceptions and providing clear guidance will be necessary to broaden market appeal.

Key facts about the 2025 heat pump market

• Total UK sales reached 125,037 units in 2025, a record high and 27% increase from 2024.
• The government’s Warm Homes Plan targets 450,000 installations annually by 2030, requiring 33% compound growth.
• UK-manufactured heat pumps represented 36% of sales, supporting domestic jobs and supply chain development.
• The UK has approximately 19 heat pumps per 1,000 households, compared to much higher rates in Norway and other European countries.
• Data from the Heat Pump Association UK, released on 12 February 2026, includes sales from grants and new build properties.
• Air-to-water monobloc systems showed 26% growth, while ground and water-source models increased by 32%.
• North Sea gas production is projected to decline, with imports expected to rise by 60% by 2035.

Cost dynamics shape household decisions on heating

Upfront installation costs remain a primary barrier for many households. Heat pumps typically cost between £7,000 and £14,000 depending on system type and property characteristics. The Boiler Upgrade Scheme provides grants of up to £7,500, reducing but not eliminating this financial hurdle.

Running costs depend heavily on electricity and gas price ratios. Heat pumps achieve efficiencies of 300% to 400%, meaning they produce three to four units of heat for every unit of electricity consumed. However, electricity costs roughly four times as much as gas per kilowatt-hour in the UK.

This pricing structure means that despite higher efficiency, heat pumps can cost more to run than gas boilers in poorly insulated homes. Therefore, properties often need insulation improvements before heat pump installation becomes cost-effective. These additional works add to the total investment required.

Long-term energy price trends favour heat pumps. Gas prices have reached 11-month highs recently and face upward pressure from declining domestic production. Conversely, electricity prices should fall as renewable generation expands. Households making decisions today must weigh current costs against future projections.

Compliance and tender requirements drive business decisions

Public sector organisations increasingly specify low-carbon heating in new builds and retrofit projects. Contractors bidding for public contracts need to demonstrate capability in heat pump installation and wider decarbonisation measures. This creates commercial pressure to develop relevant skills and supply chains.

Private sector landlords face growing expectations around energy performance. Minimum Energy Efficiency Standards already set baseline requirements for rental properties. Future regulations are likely to tighten these standards, potentially mandating low-carbon heating systems in the longer term.

Businesses managing their own property portfolios must consider heat pumps as part of net zero strategies. Many organisations have committed to carbon reduction targets that require decarbonising building heat. Heat pumps offer one of the few proven technologies capable of delivering this at scale.

Supply chain partners are adapting to customer demands for sustainable procurement. Manufacturers, installers, and maintenance providers who can evidence low-carbon credentials gain advantages in competitive tenders. For SMEs, building this expertise now positions them for growth as the market expands.

Installation capacity and skills gaps pose delivery risks

Scaling from 125,000 to 450,000 installations annually requires a massive expansion of installer capacity. The industry currently faces shortages of qualified engineers who can design, install, and commission heat pump systems correctly.

Training pathways exist through certification schemes. However, training alone cannot instantly create the workforce needed. Experienced installers require years to develop the judgement necessary for complex projects.

Quality control becomes more challenging as installation volumes increase rapidly. Poorly installed systems underperform, creating dissatisfied customers who may discourage others from adopting the technology. Maintaining high standards while scaling quickly requires robust oversight and clear accountability.

Some existing heating engineers express reluctance to transition from gas boiler work to heat pumps. This reflects concerns about retraining costs, unfamiliar technology, and business model changes. Addressing these concerns through financial support and clear career pathways would help retain experienced professionals.

Business planning considerations for the next five years

Companies should assess how heat pump market growth affects their operations and customer base. Businesses in construction, property management, facilities maintenance, and energy services all face direct impacts from the transition away from gas heating.

For manufacturers and suppliers, the expanding market offers revenue opportunities but also competitive pressures. UK-made products captured 36% market share in 2025, suggesting room for further domestic manufacturing growth. However, established European and Asian producers also compete for market position.

Service sector businesses need to consider skills development and accreditation requirements. Offering heat pump installation, maintenance, or energy auditing services could diversify revenue streams. However, entering this market requires investment in training, equipment, and insurance.

Property developers must anticipate regulatory changes that may mandate heat pumps in new builds. The Future Homes Standard is expected to set stringent requirements for heating systems. Developers who prepare for these changes early will avoid delays and cost overruns when regulations take effect.

Organisations tracking ESG compliance and carbon reporting requirements should include building emissions in their assessments. Scope 1 and 2 emissions from gas heating contribute significantly to carbon footprints. Transitioning to electric heat pumps powered by increasingly renewable electricity reduces these emissions substantially.

How accelerated deployment affects energy infrastructure

Adding hundreds of thousands of heat pumps to the grid each year will increase electricity demand, particularly during winter months. National Grid estimates suggest that widespread heat pump adoption could add 10-20% to peak electricity demand by 2035.

This requires investment in grid capacity, particularly in distribution networks serving residential areas. Local substations and cables may need upgrades to handle increased loads. Planning and delivering these upgrades takes years, making early action essential.

Smart controls and time-of-use tariffs can help manage demand. Heat pumps work most efficiently when run steadily rather than in short bursts. Thermal storage allows systems to heat properties during off-peak hours when electricity is cheaper and cleaner.

Integration with renewable generation offers system benefits. Wind and solar output varies through the day and year. Flexible heat pump operation can help absorb excess renewable generation, reducing curtailment and improving grid economics. This creates value that could be shared with consumers through innovative tariff structures.

Carbon accounting implications for businesses and supply chains

Switching from gas boilers to heat pumps affects carbon accounting across multiple scopes. Direct emissions from gas combustion fall under Scope 1. Electricity consumption for heat pumps appears in Scope 2, with emissions dependent on grid carbon intensity.

As the UK electricity grid decarbonises, Scope 2 emissions from heat pumps will decline year by year. Gas boilers offer no such trajectory. This makes heat pumps increasingly attractive for organisations with science-based targets or net zero commitments.

Supply chain impacts extend to Scope 3 emissions. Businesses procuring heat pumps should consider embodied carbon in manufacturing and refrigerant global warming potential. Lower-GWP refrigerants are becoming available, reducing the climate impact if systems leak.

For businesses supporting net zero programmes and carbon reduction planning, heat pumps represent one of the most significant available interventions for building emissions. Accurate measurement and reporting of heating emissions helps identify opportunities and track progress.

Government guidance and regulatory developments to monitor

The Department for Energy Security and Net Zero oversees heat decarbonisation policy, including the Warm Homes Plan and Boiler Upgrade Scheme. Updates to these programmes will shape market conditions and business opportunities.

Future Homes and Building Standard Regulations are expected to set new requirements for heating systems in buildings. Consultation documents and final regulations will provide detail on timelines, technical standards, and compliance pathways.

The Office of Gas and Electricity Markets regulates energy pricing and tariff structures. Reforms to reduce electricity costs relative to gas would significantly improve heat pump economics. Ofgem consultations on these issues merit close attention.

The Heat Pump Association UK publishes market data, technical guidance, and installer directories. Their quarterly statistics provide the most comprehensive view of market trends and help businesses benchmark their position.

Local planning authorities may implement policies affecting heat pump installations, particularly for listed buildings or conservation areas. Understanding local requirements helps avoid delays and additional costs in project delivery.