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Last edited 07 Jun 2021
2021 UK HVAC trends: winners and losers
Both hydronic heat pumps < 50kW and chiller heat pumps increased their share in a depressed construction market in 2020, and this trend is set to continue. Hydronic heat pumps < 50kW are expected to be driven by RHI applications in existing builds up to 2022, after which the new build market will increase its share.
In 2020, domestic boiler sales decreased, especially for new build. Boiler sales are likely to recover some lost share in 2021 over 2020, but this will depend on the outcome of the British Gas engineer pay dispute.
Gas boilers are likely to be banned in new build dwellings across UK from 2025 when the forthcoming Future Homes Standard will be implemented. Heat pumps installed by national house builders will start to gain ground in 2022, but it is not until mid-2023 that the trend is expected to accelerate. This is because the revised building regulations are likely to contain a transitional period of 12 months, during which the builder must comply with the latest set of regulations.
If the house on a plot is not built within 12 months, it will need to comply with the new regulations. By mid-2023 this will start to happen, because the Future Homes Standard will be implemented in 2025. Since new build has a very small share of the gas boiler market, it is not likely to impact sales significantly.
Electric boilers are likely to continue to see an increase in demand as a cheaper solution in small new build flats. Heat Interface Units fell in 2020 but are expected to bounce back in 2021. These products will compete for installations in new build against hydronic heat pumps.
In the commercial boiler market, BSRIA expects a drop in floor standing units compensated by growing wall hung boiler sales in cascades, with heat pumps taking share in the new build market. In terms of any changes in design, 2021 is expected to be business as usual instead of making big strides forward, however, certain consultants will be looking to change out gas boilers with heat pumps.
By 2022, this trend will start to gain momentum. Consultants will increasingly be designing hybrid systems (heat pump + gas boilers) as confidence may be low for heat pump systems amongst consultants. Heat pump sales will be driven by a few factors including the London Plan and a number of councils declaring a climate emergency.
The market for air-to-air single splits saw a fall in 2020, which is not surprising considering the share they have of the retail high street. Smaller splits increased their proportion of the market, partly due to the trend away from larger splits driven by price and legislation. RAC splits are becoming the new PAC, as they are now more effective at cooling and cheaper, whilst at the same time we are seeing an increasing trend towards residential units - albeit from a low base.
Outlook for single split is one of decline overall in 2021, especially as the UK has experienced a cool spring. The summer needs to start quickly to drive a significant up-lift in sales. However, it is likely smaller splits will continue to increase their share.
Sales, especially those < 7kW were up, driven by increasing demand from residential. This market is expected to hold up better than single splits in 2021, in part due to the trend in changing out mini VRF due to budget constraints as well as residential sales.
Mini VRF is also changing out maxi VRF where the trend is towards installing two mini VRF systems instead of one maxi VRF. The trend is towards smaller systems with lower refrigerant volumes. There is a higher confidence level for sale of mini VRF sales than maxi. Overall, the VRF is expected to be flat in 2021, with a slight decline in maxi VRF and a slight increase in mini VRF.
To summarise, it is still unclear what the long-term trend is for VRF, but most industry experts expect a rise in chiller heat pump sales pushing the chiller market higher. Hydronic heat pumps < 50kW will grow more towards 2025, but sales will be limited by the number of dwelling completions each year and the Government budget from the successor to the RHI scheme.
- BSRIA UK (Europe): [email protected]bsria.co.uk; +44 (0) 1344 465 540.
- BSRIA USA (Americas): [email protected]bsria.com; +1 312 753 6803.
- BSRIA China (China): [email protected]; +86 10 6465 7707.
This article originally appeared on the BSRIA website under the headline, 'UK HVAC trends: Winners and Losers'. It was published in May 2021.
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