IEA Webinars: 2026 Energy Shock Drives a More Measured but Structurally Deeper Heat Pump Response

The International Energy Agency's two webinars on 29 October, built around its 2026 Heat Pump Monitor, concluded that the current energy shock is generating a more measured but structurally deeper response in heat pump markets than the 2022 crisis. Energy resilience has moved from a crisis-triggered argument to a standing driver of adoption, alongside decarbonization, efficiency, affordability, and clean air.

Market backdrop

Residential heat pump sales rose by 11% in the first six months of 2026 across 12 European countries, according to statistics presented by the European Heat Pump Association (EHPA). A key factor behind the increase was the closure of the Strait of Hormuz in February 2026, which sent oil and gas prices sharply higher. The IEA noted that in Q3 2026, Asian and European gas prices averaged their highest Q3 levels since 2022, and that the 2022 energy crisis had already reshaped Europe's heat pump market.

The IEA hosted two sessions: a morning webinar focused on Asia and Europe and an afternoon session covering the Americas and Europe. In each, IEA analysts presented the Heat Pump Monitor, published earlier in the summer, followed by a panel discussion with heat pump sector representatives.

A more measured response than 2022

Monica Axell of the Heat Pump Centre (HPT TCP) opened the panel by noting that an energy crisis alone does not guarantee heat pump market growth. Consumers must be aware of and trust the technology, installers and market actors must be available, supply chains must function, and policy support must be consistent and predictable.

Several panellists agreed that the current effect, particularly in Europe, is far more modest than the 2022 surge, which was followed by a sharp market decline in 2024. Duncan Gibb of RAP described such a "boom-and-bust" cycle as harmful to both industry and consumers. In China, Hengyi Zhao of CHPA reported that sales have decreased after several years of growth, largely due to a slowdown in the construction sector. In the United States, David Smedick of NEEP noted that heat pump sales outpaced gas furnace sales in 2022 and that the country has the highest heat pump penetration globally, driven by the combined need for heating and cooling. With fossil fuel prices rising again, he saw good potential for further roll-out, especially in the north-east of the country.

Lessons from the 2022 crisis

Martin Forsén of NIBE drew an analogy with an alarm clock. In 2022, the alarm went off and everyone reacted quickly: the European Commission published REPowerEU just weeks after the invasion of Ukraine, heat pump demand surged, and manufacturers announced capacity-investment decisions. A year later, once alternative gas supplies had been secured, many pushed the "snooze button." Forsén argued that the alarm will sound again, and that consumers and policymakers are now more aware that measures to shift away from oil and gas are needed to protect against price shocks and strengthen energy security. He observed that many consumers now think twice before replacing an old fossil-fuel boiler with a new one.

Multiple panellists stressed that consistency and predictability of policy are essential for a sustainable transition to electric heating.

Structural drivers and policy levers

Justin Tamasaukas of CanmetENERGY (Canada) emphasized the importance of skilled installer availability, noting that replacing a boiler is very rarely a planned activity. When an old fossil-fuel boiler or furnace breaks down, building owners need to be able to contact qualified installers quickly to arrange a heat pump installation.

Paul Kenny of EHPA summarized his recommendations as "tax and flex." He urged shifting taxation off electricity to match the tax on fossil energy, and making heat pumps operate flexibly in both summer and winter: running when electricity prices are lower and the renewable share in generation is high, avoiding peak-price hours, and storing heat or cool between periods. Sweden was cited as a market where flexible heat pump operation is becoming increasingly common. Kenny also recommended that subsidies aimed at offsetting high energy prices should target those who need them most and should preserve the electricity price signal.

The electricity-to-gas price ratio has a large impact on heat pump penetration in different markets, and spiking gas prices affect this ratio considerably. The European Commission, in its Electrification Action Plan, states that the tax on electricity should be no higher than that on gas and encourages EU governments to lower electricity taxes to accelerate the shift away from oil and gas. The Commission is also proposing a revision of network charges on power bills to reward flexible options such as heat pumps.

Heating and cooling convergence

Air conditioner sales surged in key heating markets such as Europe and Japan in 2026, raising the question of whether growing thermal-comfort demand is a catalyst for wider heat pump adoption.

David Smedick confirmed that high air-conditioner penetration in the US is an important driver of heat pump roll-out. Homes that previously did not need comfort cooling but now require it because of rising outdoor temperatures and more frequent heatwaves represent significant market potential for heat pumps that provide both heating and cooling. Homes that already combine an AC unit with a gas furnace also offer potential: when both appliances need replacing, a single heat pump can cover both functions.

Martin Forsén noted that in some European countries where electricity for residential comfort cooling was previously hardly permitted, only heat pumps with a reversible cooling function are now considered eligible for subsidies.

Monica Axell agreed that growing cooling demand and more frequent heatwaves are clear catalysts for heat pump growth. She highlighted the opportunity to address heating and cooling together: for new buildings, a heat pump providing both functions is an attractive choice, but the largest market lies in existing buildings, where the situation is more complex. There, the need for cooling can create an opportunity to invest in a heat pump. She called for policy, research, and innovation to address not only technology but also system integration, market formation, user acceptance, and social impact, creating conditions that favour planned reinvestments focused on secure, affordable, and sustainable thermal comfort.

Sources:

https://www.iea.org/events/heat-pump-monitor-2026-webinar-afternoon-session

Post-Hormuz heat pump sales climb 11% – European Heat Pump Association