Main figures for the Australian heat pump market

Australia is experiencing a surge in heat pump sales, according to a report published in September 2023 by the Department of Climate Change, Energy, the Environment and Water. The authors expect this upward trend to continue at least into the mid-2030s, as heat pumps continue to replace gas appliances in both existing and new buildings. 

 

The introduction of financial incentives for the installation of heat pumps has resulted in a fourfold increase in domestic heat pump installations between 2019 and 2022. There were 117,000 hot water heat pumps installed in 2022. It is estimated that this product category could reach 450,000 hot water heat pumps sold in 2036. 

 

Heat pumps that offer both heating and air conditioning are commonly called reverse cycle air conditioners in Australia. The most popular segment of this category is ductless split systems, which covers a wide range of formats such as an outdoor unit combined with single or multiple indoor units. Single split system sales  were estimated at 1.32 million units in 2022, comprising 1.14 million ductless split systems and 181,000 split ducted systems. Sales are projected to grow at a 4% compound annual growth rate until 2036. 

 

In Australia, the market for commercial heat pumps is small. In 2022, only 250 units were sold. Space constraints and long payback periods are the main reasons why heat pumps and multi-function chillers are not gaining traction in retrofit commercial buildings. Nevertheless, the need to decarbonise opens a growth potential of 15% per year until 2036, equating to more than 1,750 units sold in 2036. 

 

The surge in heat pumps will lead to an increase in the use of HFCs estimated to add up to 0.071 million tonnes of carbon dioxide equivalent (Mt CO₂e), equating to around 4.4% of the limit of 1.622 Mt CO₂e set by the Montreal Protocol in 2036. In order to mitigate this issue, the Australian Government will ban the import and manufacture of small air conditioners using refrigerants with a GWP over 750 from 1 July 2024. In addition, domestic heat pumps containing refrigerants with a GWP greater than 700 will no longer be eligible for some financial incentives. 

 

 

The report is available here.