The UK could realise £22.55 billion in economic benefits by 2035 by accelerating the decarbonisation of residential heating, according to a new report from the Heat Pump Association UK (HPA UK). The report, titled *From Carbon to Competitiveness: The UK Opportunity Associated with Decarbonising Residential Heating*, coincides with the recent Warm Homes Plan. This plan commits new funding towards heat pumps, as well as solar and battery initiatives, yet stops short of banning gas boilers, which could influence heat pump sales.
Despite the absence of a regulatory boost for heat pump installations, HPA UK emphasises the substantial economic advantages of adopting the technology. Electrifying home heating, primarily through hydronic heat pumps, could elevate the Gross Value Added (GVA) from residential heating from £12.2 billion today to £22.5 billion by 2035, representing an 85% increase from 2025. HPA UK insists that decarbonising residential heating should be viewed not only as a climate imperative but also as an industrial strategy opportunity that encompasses manufacturing, installation, and services.
HPA UK projects significant growth opportunities linked to heat pump deployment. The report indicates that by 2025, heat pump manufacturing, installation, and use were valued at £1.0 billion to the UK economy, which could rise to £15.0 billion by 2035 with accelerated deployment. Regarding employment, the report estimates that heat pump-related jobs could expand by over 110,000 full-time equivalent roles by 2035, accounting for 82% of jobs in the residential heating sector.
The report also highlights the potential for domestic manufacturing growth, suggesting that UK manufacturing capacity could increase by 15 to 27 times by 2035, with additional potential through exports if supply chains expand alongside demand. On energy security, the report claims that gas demand could decrease by 63 TWh between 2025 and 2035, equating to enough energy to power the London Underground for 75 years.
The analysis further notes environmental and health benefits, asserting that reducing fossil fuel boilers could contribute to a 6% reduction in overall UK air pollution by 2035. It estimates that annual carbon abatement from heat pump deployment could reach 17 MtCO₂e by 2035, equivalent to 20 million passenger flights from London to New York.
Charlotte Lee, Chief Executive of HPA UK, stated, “Today’s findings show that decarbonising residential heating should not be viewed as a cost burden, but a major economic opportunity. Heat pumps can drive billions of pounds in growth, support tens of thousands of skilled jobs across the country, and strengthen the UK’s energy security by reducing reliance on imported gas. With the right long-term policy clarity, the UK can build a world-leading heat pump industry, grow our domestic manufacturing, and deliver cleaner, healthier homes for millions of residents.”
While the economic potential is clear, some industry voices express concern that consumers, rather than legislators, need convincing. The high cost of electricity is often cited as a significant barrier to adopting the technology. However, if the Warm Homes Plan enables more households to generate their own affordable, clean electricity, it could encourage a shift towards heat pumps as households seek to reduce their gas bills.
