Summary
Adveco presents research providing an overview of the UK’s commercial water heating market, establishing the baseline against which all future decarbonisation efforts will be measured. In part two we explore the status and adoption rates of the leading sustainable alternatives intended to disrupt the gas-dominated domestic hot water (DHW)market…
Adveco presents research providing a data-driven overview of the UK’s commercial heating market, establishing the baseline against which all future decarbonisation efforts will be measured. In part two, we explore the status and adoption rates of the leading sustainable alternatives intended to disrupt the gas-dominated domestic hot water (DHW)market…
Recent Installation and Sales Trends
The UK heat pump market has demonstrated a significant acceleration in recent years, reaching pivotal milestones in 2024. Factory-gate sales data from the Heat Pump Association (HPA) indicates that 98,469 hydronic heat pumps were sold in 2024, representing a substantial 63% increase over the previous year.7 This growth was particularly pronounced in Air-to-Water (A2W) monobloc sales, which rose by 64%, and in the “other heat pump” category, which saw a 100% growth.7
A complementary but distinct picture emerges from the Microgeneration Certification Scheme (MCS), which tracks certified installations for small-scale projects. The MCS recorded nearly 60,000 certified heat pump installations in 2024, marking a 43% increase compared to 2023.8 This positive trajectory continued into the first half of 2025, with a new record of 30,000 certified heat pump installations completed, a 12% increase on the first half of 2024.9
A notable finding from the market data is the significant disparity between the number of units sold at the factory gate and the number of installations officially certified by MCS. The HPA’s own data acknowledges that MCS notifications account for approximately 60% of total sales. 7 This means that over a third of heat pump sales in the UK are not captured by the official certification and data-tracking framework. This segment of the market may include larger commercial installations that fall outside MCS’s small-scale scope, projects in new-build properties that are not eligible for the Boiler Upgrade Scheme, or installations conducted by non-MCS certified companies. The existence of this parallel market highlights a fundamental gap in the statistical understanding of the sector and raises questions about the quality and standards of installations that are not linked to the MCS quality assurance framework.10 The data suggests a growing “organic” market driven by factors beyond direct government grants, which may represent a more resilient growth pathway for the sector.
UK Performance in a European Context
Despite the robust growth observed domestically, the UK’s heat pump market still lags significantly behind its European neighbours when viewed from a per-capita perspective. In 2024, the UK sold just 3.5 heat pumps per 1,000 households, an adoption rate that is more than 14 times lower than Norway’s 48.1 heat pumps per 1,000 households.11 Similarly, the total stock of heat pumps in the UK, at 19 per 1,000 households, places it last in the European Heat Pump Association (EHPA) ranking, with Norway and Finland leading the way at 632 and 524, respectively. 11
This data presents a situation where the UK is simultaneously a “poor performer” historically, yet one of the fastest-growing markets in the world in 2024. 11 This is not a contradiction, but rather a pattern characteristic of a nascent market entering a period of rapid acceleration. The high growth rate demonstrates that policy reforms and economic conditions, such as the increase in the Boiler Upgrade Scheme (BUS) grant and the volatile cost of fossil fuels, have been effective in stimulating a previously stagnant market. It indicates that the UK market is far from saturated and possesses immense potential for future growth. If this momentum can be sustained with ongoing policy support, the UK has the opportunity to rapidly close the adoption gap with its European peers in the years to come.
Technological Breakdown and Applications
The MCS data confirms that heat pumps, alongside solar panels and battery storage, are primary contributors to the record-breaking uptake of small-scale renewable technologies in the UK. An earlier government study on non-domestic properties found that only 5% of buildings surveyed had a heat pump installed. This finding, combined with the fact that 79% of those users reported satisfaction with their system, highlights the vast potential for future adoption across the commercial sector.12
A review of the legacy Non-Domestic Renewable Heat Incentive (NDRHI) scheme reveals a distinct technology mix. From the scheme’s inception to its closure in March 2025, solid biomass boilers accounted for 77% of the 22,703 accredited installations, with ground source heat pumps representing 12%.13 This historic preference for biomass boilers, particularly on off-gas-grid properties, stands in contrast to the current market focus, which is seeing a surge in heat pump applications under the Boiler Upgrade Scheme. 14
In part three, Adveco examines the cornerstones of decarbonisation, assessing the adoption of heat pumps and solar technologies…
Read Part 1 | Part 2| Part 3 | Part 4 | Part 5 |
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