What's the Hold Up on GSHP? Our Industry Study Findings

30 Sept

It is estimated that by 2030, there will be around 253 million heat pump systems installed globally. To be fully ‘Net Zero’, 600 million operational units are actually required by this date.

Unfortunately, if adoption continues at the current rate, this means there will be a shortfall of 58%. To highlight the issue of adoption in this country - compared to the EU, the UK has fewer heat pumps. For example, 55,000 heat pumps were sold in the UK in 2022, compared to more than 620,000 sold in France.

So what’s the hold up on GSHPs? We decided to find out.

Earlier this year, we asked our GSHP industry peers, leaders and stakeholders what barriers arise to adopting GSHPs, what the motivations are for considering GSHPs and what the decision factors are for choosing GSHPs.

From the results, the Genius Energy Lab team has put together a compelling industry report which includes valuable insights, identifying key barriers, motivations, and decision-making criteria that industry stakeholders face concerning GSHP technology.

By understanding these factors, we aim to address the challenges and leverage the motivations to promote wider adoption of this sustainable technology.

Genius Energy Lab CEO, Richard Davis, explains in more detail our rationale for conducting the study.

“The energy landscape is undergoing a transformative shift towards greener and more sustainable solutions. In this context, GSHPs offer a compelling alternative due to their superior energy efficiency, reduced carbon footprint, and long-term cost benefits. However, despite these advantages, we have observed that the adoption of GSHP technology is not as widespread as it should be.
This disparity prompted us to initiate an in-depth industry study to uncover the underlying factors influencing the adoption and implementation of GSHP systems”.

Let’s dive into some of the report’s details and - of course - for the complete survey results, plus analysis, you can download the full report here.

Barrier to GSHP #1: Concern Over Cost

A major barrier identified by our survey respondents is the worry over the potentially high initial cost associated with GSHP installations. Compared to alternatives like Air Source Heat Pumps (ASHP), the upfront investment for GSHPs is substantial, which includes costs for installation as well as borehole testing to assess the energy potential. One respondent emphasised - “The high cost to perform test boreholes to properly assess energy potential undermines the strength of the project if not done.” This perception can cause delays or even lead decision-makers to abandon GSHPs in favour of seemingly more affordable solutions.

Furthermore, GSHPs are often perceived as complex and time-consuming, with more steps required than other systems. This sentiment contributes to the hesitation in adopting the technology, especially when project timelines and budgets are tight.

The irony about this misconception is that the opposite is true: the savings that GSHPs efficiencies deliver over their whole lifecycle mean that they offer cheaper heating and cooling in the long run than any other energy source today. Supporting contractors to recognise the operational savings alongside the upfront cost of GSHPs is a crucial part of our ongoing strategy of educating the market.

Barrier to GSHP #2: Lack of Understanding

Another significant barrier is the general lack of understanding about GSHP technology, highlighted by 40% of our report respondents. Misconceptions are particularly widespread among builders and architects, limiting its promotion and use. The construction industry tends to focus on the initial investment rather than considering the long-term savings GSHPs offer, reflecting a gap in financial education or available financing options.

Additionally, according to our partners Kensa Contracting, most GSHP installations are classified as permitted developments, meaning planning permission isn't always required. With varying legislation, regional planners may interpret the guidelines differently. Early collaboration with experienced companies, such as ourselves, can help navigate this challenge, ensuring a smoother and more cost-effective process.

Here at GEL, we’re moving forward to aid education for GSHP technologies, with targeted and accessible information for all. Our monthly newsletter - “The Source” - is full of insights and innovations in the world of GSHPs. We also run regular ”Lunch and Learn” sessions: free online webinars that dive deeper into all things commercial GSHP with our experts. Subscribe to The Source for news of the next Lunch and Learn event.

Barrier to GSHP #3: Government Support and Education

In addition to cost and complexity concerns, a lack of government funding is also perceived as a critical obstacle. Respondents pointed to the need for more innovative funding solutions to make GSHP deployment more accessible. This aligns with a recent E3G report that stresses the importance of lowering the upfront costs of sustainable energy technologies.

So it is welcome news that the Department for Energy Security and Net Zero opened up new funding on 30th September - the Warm Homes: Social Housing Fund. The aim is to make millions of social homes more energy efficient by 2028 with our partners, Kensa, on hand to support social housing landlords adopt heat pumps and apply for funding to provide their residents with the best possible, low-carbon heating solutions.

Educational efforts must also improve, as respondents indicated that the current communication strategies about GSHPs are not effective. More targeted educational initiatives are required to bridge the knowledge gap among industry professionals and clients. By increasing awareness of the benefits, stakeholders can make better-informed decisions, leading to more widespread adoption of GSHP.

The Good News: Motivators Driving GSHP Adoption

Despite the challenges, there are strong motivators for considering GSHP technology.

The most significant driving force is its potential to reduce carbon emissions. With 33% of respondents motivated by its carbon credentials, it’s clear that GSHPs align with corporate commitments to environmental, social, and governance (ESG) standards. Projects with clear carbon net zero ambitions are more likely to prioritise GSHPs for their environmental impact.

Low running costs also play a major role in GSHP adoption. While the initial cost may be high, the operational savings over the system’s lifetime make it an attractive long-term investment. Respondents noted that GSHPs offer the lowest total cost of ownership, showing a mature understanding of its long-term financial benefits.

Energy security, highlighted by 20% of respondents, is another key motivator. Recent global events have heightened the awareness of stable and reliable energy sources, making GSHPs a favourable option. Its ability to provide consistent heating and cooling, regardless of external energy supply fluctuations, gives it an edge over other technologies.

The Path To Wider Adoption Will Become Clearer

Despite the perceived negative barriers, the benefits of GSHPs are undeniable. The key to unlocking its potential lies in overcoming the initial cost hurdle, improving education on its long-term value, and advocating for greater government support. As more stakeholders become aware of GSHP’s carbon reduction capabilities, energy efficiency, and cost savings, the path to wider adoption will become clearer.

So, while challenges exist, the case for GSHPs is strong. As we push for decarbonisation and energy security, GSHP’s environmental and financial benefits make it a vital solution for the future.

By addressing misconceptions and providing better support, we can help pave the way for a more sustainable, energy-efficient world.

If you have a stake in the energy transition, we believe our industry report is required reading.