We have more data on the energy benefits of heat pumps — and they’re big

The push to electrify everything has been very good for heat pump sales. Americans are now buying more heat pumps than gas furnaces — outpacing the number of units sold in Europe.

Heat pumps are wildly more efficient than furnaces, and the technology continues to improve. But what does real-world experience tell us about how they impact energy consumption and household emissions?

A new study by the Centre for Net Zero has found that households with installed heat pumps reduce their average energy demand by 40%, and their carbon dioxide emissions by 36%. 
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Heat pumps, on average, reduce home gas use by 90% and increase home electricity use by 61%, according to the study. For gas, this corresponds to a 9,351 kilowatt-hour reduction, from a baseline of 10,336 kWh per year — a far greater reduction than the electricity increase they require, which corresponds to a 3,080 kWh increase, from a baseline of 5,062 kWh per year. 

“You get a coefficient of performance of 300%,” Robert Metcalfe, chief economist at the Centre for Net Zero and one of the study’s co-authors, told Latitude Media. “Which means that you only need a third of the energy to get heating in the homes through a heat pump, as opposed to a gas boiler.”

The study analyzed performance of heat pumps in the U.K. installed by Octopus Energy.

That’s a positive sign for heat pump advocates in the U.S., who are pushing an ambitious plan to install heat pumps in 140 million homes by 2050. In 2020, there were only about 17 million households with heat pumps. 

Specifically, the households in the study reduced their end-use energy demand by approximately 40% when they replaced their gas boiler with a heat pump.

“This is whopping numbers, huge numbers that we get because we just converted the source of the energy in the home without consumers actually doing anything apart from adopting the heat pump,” Metcalfe said. “We've never seen changes in any heat demand for anything in that order of magnitude.”

It’s widespread knowledge that current models of heat pumps are three to five times more energy efficient than gas boilers, according to data from the International Energy Agency. But those are numbers coming “from just the engineers doing engineering research,” according to Metcalfe, and based on a restricted number of households. Trying to determine the efficiency of heat pumps by comparing households with heat pumps to households without heat pumps would be like comparing apples to oranges, he said.

Instead, the new analysis leverages a staggered rollout of heat pumps from Octopus Energy Group across Great Britain, using consumption data from the renewable energy group’s customers to have access to enough data. (The Centre for Net Zero is Octopus Energy’s research arm.) 

Additionally, it provided the researchers with information about which heat pumps customers adopt, when they ask for it to be installed, and when it actually gets installed. 
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“There's normally a lag between signing the deal and getting the heat pump,” Metcalfe said. “The staggered rollout allows us to credibly say what would happen in absence of adopting a heat pump, which is the most important thing.”

Another key benefit: heat pumps do not require drastic changes in habits to produce results. 

In addition to confirming heat pumps’ efficiency, the study investigated the impact of a heat pump time-of-use tariff implemented by Octopus Energy.

The tariff includes two three-hour periods when it’s 40% cheaper to heat your home and a three-hour peak period when it’s 60% more expensive to do so. It was designed to shift electricity consumption away from peak times, which are growing in frequency due to electrification, data center expansion, and extreme weather.

The study examined the habits of over 6,000 customers and found them very responsive to the tariff’s incentives.

“In those off-peak periods, they consumed a lot more electricity, which is good,” Metcalfe said. “But they also reduce their demand dramatically in the peak period. There's potential for customers to benefit economically from doing this, even beyond how great this is for decarbonization.”