Why More Homes Are Switching From Gas to Heat Pumps

Heat pumps are becoming an increasingly popular alternative to gas-powered central heating systems and are increasingly being used in new construction, often driven by government incentives. A heat pump uses technology similar to that found in a refrigerator or an air conditioner, extracting heat from a source, such as the surrounding air, and amplifying and transferring the heat to where it is needed. As most of the heat is transferred rather than generated, heat pumps are far more efficient than conventional heating technologies such as boilers or electric heaters, and are often cheaper to run.

Heat pumps have a compressor and a heat exchanger. In buildings, heat is usually dispersed via radiators or under-floor heating. Heat pumps can be connected to a tank to produce sanitary hot water. They can also be used for cooling purposes in the summer, thereby reducing reliance on air conditioners. In industry, heat pumps are used to deliver hot air, water or steam, or to directly heat materials. The heat energy output is typically far greater than the electricity required to power the heat pump, making existing models three to four times more energy efficient than gas boilers.

In countries that are still heavily reliant on fossil-fuel-generated electricity, heat pumps continue to contribute to carbon emissions. Over one?sixth of global natural gas demand and one-third of the European Union’s demand is for heating in buildings. Heating in buildings is responsible for 4 gigatonnes of carbon emissions a year, or around 10 per cent of global emissions. However, when heat pumps are powered by electricity from renewable energy sources, they become a green heating and cooling system. This means they can help shield users from fossil fuel price volatility.

In 2021, approximately 10 per cent of global space-heating needs were met by heat pumps, with global sales increasing by almost 15 per cent that year, double the average of the last decade. Some countries have already widely adopted heat pump use, such as Norway, where 60 per cent of buildings are equipped with heat pumps, as well as Sweden and Finland (over 40 per cent). This has helped undercut the argument that heat pumps are unsuitable for cold climates.

As uptake continues to increase, particularly in regions such as the European Union, researchers are continually improving heat pump technology to make them cheaper and more efficient.

In the United States, heat pump sales have doubled over the last 15 years, according to a recent report. Heat pumps outpaced natural-gas furnaces by 32 per cent in the first quarter of 2026, even after a tax credit for heat pumps concluded at the end of last year. People who installed heat pumps were previously eligible for up to $2,000 in tax credits. However, “It appears that the U.S. market for heat pumps is strong enough that it does not depend on tax credits,” Lucas Davis, an energy economist and UC Berkeley professor, wrote in a new analysis.

In Massachusetts, the Boston-based startup Reservoir announced earlier this year that it had raised $8 million in seed funding, enabling it to expand beyond its 100 local installations to as many as 1,000 by the end of 2027. It is one of many startups offering innovative heat pump technology. Reservoir claims to have built an ultra-efficient water heater that can predict hot water demand, store energy, and detect plumbing leaks. The water heater is programmed to spend the first month in a home collecting information about water use patterns to train a model, which then allows it to run at the most efficient and cost-effective times, cutting costs without limiting the supply.

Reservoir has also fitted its water heater with an ultrasonic flow sensor to help detect plumbing leaks. Its higher-end models include additional features, such as a recirculation valve to deliver instant hot water and a mixing valve that can prevent pipes from freezing in cold weather. Everything can be managed easily through a mobile application.

In the United Kingdom, heat pumps have surprised many users by offering them a much-needed reprieve from the seemingly endless summer heatwaves. Only about 3 per cent to 5 per cent of U.K. homes have air conditioning, but uptake is rising rapidly as temperatures above 30°C are becoming increasingly common in the summer months. However, people who have already switched to heat pumps for heating purposes are now seeing their potential for cooling during hotter periods.

The U.K. government’s boiler upgrade scheme offers grants of $10,100 to help homeowners in England and Wales with the installation cost of an air-to-water or ground-source heat pump (a heat pump that extracts heat from the ground through buried pipes). Households that are not connected to the gas grid qualify for an additional $2,000 in support.

Heat pumps are growing in popularity in various parts of the world as an alternative to gas-powered heating. They can also be used for cooling, making them increasingly popular in countries with lower air-conditioning uptake, where temperatures are rising. Greater innovation and lower prices could make heat pumps much more popular in the coming decades.

By Felicity Bradstock for Oilprice.com

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