22 June 2026
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Jason Tinsley, Vice President of Blue Star Global, explains why heat pump design is becoming a critical differentiator in this shifting market.
In the UK and across Europe, heat pumps are now central to national energy strategies, decarbonisation targets and long-term energy security.
The UK government recently boosted its support of heat pumps by announcing early moves to de-couple electricity pricing from gas which should eventually reduce the price of operating a heat pump. In addition, households on LPG and oil heating systems were offered extra support through the Boiler Upgrade Scheme (BUS). And the Future Homes Standard has set a clear pathway to use of heat pumps in new homes from 2028.
At a European level, initiatives such as REPowerEU are targeting tens of millions of new heat pump installations by 2030, supported by regulatory measures, incentives and manufacturing investment.
A market shaped by uncertainty
Despite this growing momentum to low-carbon heat, the market itself is far from straightforward for manufacturers. Market growth has not followed a smooth upward trajectory, and as a result they are navigating a landscape shaped by uncertainty, complexity and rapid change. Yet, without a steady flow of heat pump product development and manufacturing, no amount of grants or policy will deliver the low-carbon future.
Those in the market recognise this issue. For example, the HPA UK has called for greater policy certainty to accelerate heat pump adoption in residential and commercial buildings, stating: “Without a clear strategy and stable policy framework, the retrofit market risks underperforming, putting these vital supply chains, including UK companies and employment, at risk.”
It’s a call that highlights the key challenge in the heat pump sector across the UK and Europe. There is opportunity ahead for heat pump manufacturers (and installers), but getting there means navigating risk.
In our work with international clients, Blue Star sees three interconnected challenges that define the sector: volatility, fragmentation and acceleration. Together, they are reshaping how manufacturers must respond to the market.
Volatility in the heat pump sector is clear. The past two years have demonstrated that demand for heat pumps is highly sensitive to external factors. Periods of rapid growth have been followed by slowdowns, often linked to changes in subsidy regimes, energy pricing and consumer confidence.
In the UK, for example, annual sales have continued to rise, reaching over 125,000 units in 2025, but this growth remains heavily weighted towards the domestic sector, with non-domestic adoption still lagging, as UK HPA highlights.
Similarly, in Europe, after a decade of expansion, the market dropped in 2023 and 2024, raising concerns about the impact on planned investments in manufacturing and research.
This creates a difficult planning environment for manufacturers. Product development cycles in HVAC are typically long, and require significant upfront investment in engineering, testing and certification. When demand fluctuates, the risk associated with those investments increases.
The result is growing emphasis on flexibility in product design. Systems need to be adaptable to different price points, installation scenarios and levels of performance without requiring complete redesign. Modular architectures, scalable platforms and configurable components are becoming more important as manufacturers look to respond quickly to changing market conditions.
If volatility reflects change over time, fragmentation reflects difference across geography.
Different markets, different requirements
Although often discussed as a single market, Europe is of course a collection of distinct national and regional ecosystems. Building stock, climate conditions, regulatory frameworks and installer capabilities vary widely, creating very different requirements for heat pump systems.
In the UK, much of the opportunity lies in retrofit, where systems must work within the constraints of existing buildings, often with limited space, legacy emitters and varying levels of insulation. Hybrid systems and high-temperature performance can be important considerations in this context.
Northern European markets place a strong emphasis on cold climate performance and efficiency at low ambient temperatures. Meanwhile, in Southern Europe, cooling capability can be just as important as heating, shaping system design in different ways.
Overlaying climate issues are regulatory differences. The implementation of the revised Energy Performance of Buildings Directive in the EU, alongside different national boiler phase-out timelines, and differing incentives across borders all influence how systems are specified and installed.
The implication is clear: a one-size-fits all product strategy is increasingly difficult to sustain for manufacturers. This requires a deeper understanding of local conditions and closer collaboration with distribution partners, engineers and installers.
User experience of heat pumps is also key to success. For homeowners, ease of use, cost of operation and system reliability are critical. For installers, simplicity, familiarity and ease of commissioning can be decisive factors. Designing systems that balance these requirements across different markets is a complex task.
The third defining factor is acceleration. Across both the UK and Europe, regulatory change is happening at pace. The phase-down of F-gases, stricter energy performance standards, and ambitious decarbonisation targets are compressing the timelines in which manufacturers must develop and deploy new products.
While policies to support heat pump adoption are needed, the pace of change creates pressure. Products must not only meet current standards but anticipate future requirements, often within shortened development cycles. Decisions around refrigerants, system architecture and performance characteristics must be made with an eye on evolving regulation.
In addition, the technology of heat pumps is advancing. Improvements in compressors, controls, system integration and digital connectivity are opening new possibilities for efficiency and performance. But integrating these innovations into robust, cost-effective products at speed is a significant engineering challenge.
Taken together, volatility, fragmentation and acceleration point towards a broader shift in the heat pump sector. Historically, success in HVAC manufacturing has often been linked to scale and standardisation. Today, those factors remain important, but they are no longer sufficient on their own.
Design-led strategies for the future
There is growing recognition that product design must sit at the centre of strategy. The ability to develop heat pumps that are tailored to specific markets, adaptable to changing conditions and aligned with future regulatory requirements is becoming a key differentiator.
This does not necessarily mean developing entirely new products for every scenario. More often, it involves combining core technologies with flexible design frameworks that allow systems to be configured for different applications and regions. Design characteristics such as manufacturability, ‘installability’ and usability are just as important as designing for performance.
From a UK perspective, this has particular relevance. The success of heat pump deployment is heavily reliant on policy support and consumer demand, but it’s equally critical to think about the availability of systems that are suited to the realities of British building stock and installation practices.
The direction of travel for heat pumps is set. Across Europe and the UK, they will play a central role in the transition to low carbon heating. What is less certain is how smoothly that transition will unfold. Market fluctuations, regional differences and rapid regulatory change will continue to shape the landscape in the years ahead.
For manufacturers and their partners, this reinforces the importance of a design-led approach. Heat pumps must be developed to perform in a market that is evolving quickly and often unpredictably.
Approaches such as custom design and manufacturing models, like those offered by Blue Star, address this shift, enabling greater alignment between product development and market needs. By focusing on how heat pumps are designed rather than simply how many are produced, the industry is better placed to navigate the challenges ahead and deliver on the significant opportunities that lie beyond them.
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