February 16, 2024

The future of the heating industry

crystal ball with a boiler inside it

The heating industry is currently teetering on the precipice of a bold new future. We are about to reach a critical velocity where green technology takes over and a new form of heating rises to the top.

But what does this future of heating look like?

Can we expect to see heat pumps move ahead of traditional gas boilers, or will the convenience of hydrogen win over?

Or perhaps it will be electric heating that will become the heat source of the future or something altogether new we’re not yet talking about.

Whichever horse you decide to back, the world looks set to move away from gas and oil. But what form of heating will come out on top and will we see the green panacea we’re hoping for?

It’s time to dig into the details and make some predictions for the heating industry from 2024 into the future.

The current state of the heating industry in 2024

In 2024 the heating industry faces a number of challenges.

There are currently 23 million homes in the UK that rely on gas boilers - that’s 78% of households nationwide. But this is set to change.

Since signing up to the Paris Agreement in 2015, the UK has pledged to reduce greenhouse emissions by 68% by 2030 and hit net zero by 2050. In 2020 the UK managed a 44% reduction in emissions which bodes well towards hitting that 2030 target.

However, if Great Britain wants to hit that 2050 net zero target, then moving away from gas boilers is going to be a big part of that effort.

To achieve this, any homes built after 2025 will not be fitted with a gas boiler but must install an alternative source of heating such as a heat pump.

So what is the current breakdown of heating sources across the UK?

Currently, gas boilers still hold the top spot with 78% of households using this energy source to heat their homes.

blue gas flame on hob

Below gas boilers, there's a big drop off, with just 9% of households using electric heating.

In the bronze medal position, it’s the oil heating systems with just 3% of households using this method of heating.

Finally, making up less than 1% (based on 2021 figures) of the heating contribution across the country, it’s renewable heating. This is the area where the UK desperately needs a big shift.

If that 2050 target is going to be hit, then renewable sources will need to go from less than 1% to over 70% in combination with electric and hydrogen.

The problem

Despite the massive slant in favour of gas heating, the government is trying to incentivise a move away from gas through its Boiler Upgrade Scheme.

This provides a £7,500 grant per home, providing funding for the installation of 30,000 new heat pumps every year. The aim being to reach 600,000 new installations a year.

But this is where we reach the problem.

Despite the UK government's push for more heat pump installs, the UK (and the US as well) is suffering from a shortage of qualified heat pump installers. Currently, there are just 1,500 certified heat pump installation companies in the UK.

If the government wants to match growing demand then it is estimated that the UK will need 50,000 qualified heat pump installers by 2028.

This means that even if there was significant demand there currently aren’t the installers available to deliver on that demand. Furthermore, the standard of training for heat pump installations doesn’t always reach the necessary levels.

So what does that mean for the future?

The short-term future of the heating industry

The short-term future of the heating industry is likely to see a tug-of-war between different heating companies and competing technologies.

As we’ve shown, heat pumps are the leading contender in the current market, with the UK government heavily backing this technology for the future.

The success of this technology will likely be dictated by how steadfast the government is in backing this heating system.

If investment is made to encourage new heat pump installers into the industry and training is put in place with continued financial support, then this form of heating is likely to become the leading heat source in the UK.

This may well be affected by the upcoming general election in the next year, with a potential new government changing its approach. It does seem likely that heat pumps will be favoured, however, as the other alternatives are still lagging behind.

Hydrogen boilers

On the surface, hydrogen sounds like a certain winner to meet the UK’s green heating demands.

It can be extracted from water using electrolysis, meaning it is in plentiful supply and doesn’t produce greenhouse gasses when it is burnt.

There are already trials taking place to use this technology in domestic boilers, however, it is not yet a viable mass-market product.

There are also a number of significant issues with hydrogen.

Firstly, hydrogen cannot be used in current gas boilers but would require a new hydrogen-specific or hybrid boiler. Furthermore, due to the properties of hydrogen, any metal piping would need to be replaced with PVC to prevent failure through hydrogen embrittlement.

The other issue is a financial one. The cost of producing hydrogen is extremely high, as it requires the use of electrolysis, which is a very energy-intensive process and would be difficult to scale to meet market demand. Using hydrogen would be 4 to 5 times more expensive then a heat pump.

What’s more, not all hydrogen is produced from green energy sources. One form of hydrogen production is extracted from natural gas. This method requires more energy, produces more emissions and is far more expensive.

Despite all this, the government is still pushing hydrogen as a gas alternative, meaning it is likely that this source of heating will appear in more homes.

For the heating industry, this will mean more installers will need to learn about this technology and start to deliver it to customers. The considerable infrastructure and pipework that will need to be fitted will also provide opportunities within the heating industry.

In short, expect this area of heating to grow in the short term, but there is a fair likelihood that it will disappear in the long term if there are policy changes, at least as a domestic heating option.

Electric heating

Interestingly, the humble electric heater might well be the solution the heating industry is looking for.

Electric boilers turn electricity directly into heat. This makes them small, quiet, easy to install and simple to service.

However, they suffer from one major limitation… they are expensive.

This is because electric boilers convert electricity to heat at a one-to-one ratio, significantly below heat pumps which can operate at 250% to 450% efficiency. Electricity is expensive, so this ratio is not a good one for electric heaters.

This means that in the short term, electric heaters aren’t likely to take over, however, you don’t need to look very far ahead to see a world in which electric boilers are the heating system of choice.

This is because electricity produced from fossil fuels is currently taxed under environmental and social obligation charge. Currently, 22.9% of your electricity bill is made up from this charge and only 2% is attributed to gas.

This is because historically electricity has had a much higher carbon intensity compared to gas. However, this has been steadily falling, to the point that electricity will become more sustainable than gas. When this happens this tax will swap, greatly reducing the cost of electricity.

As the UK transitions to renewable and green energy sources this tax will come down, as will the cost of electricity in general. This may make electric heating a viable alternative to gas heating or even heat pumps.


This form of heating is still in limited use and is unlikely to be seriously adopted in the domestic heating sector.

The idea behind biofuel is that you grow biological materials which can then be burnt or processed to extract gas.

While greenhouse gasses will be released when generating heat, this gas is then recaptured when new biofuels are grown meaning net emissions remain at zero.

There are, however, still some potential environmental issues associated with this form of heating such as problems with biodiversity and shipping, plus this energy source could be difficult to scale.

This would suggest that biofuel’s short-term future is limited.

Don’t expect this energy source to take off any time soon, although it is still likely to grow, especially in areas where other green alternatives aren’t readily available.

fireplace with wood on the side and black kettle on the top

The long-term future of the heating industry

The only way is green.

It looks pretty clear that the world is only moving in one direction when it comes to the heating industry and that is towards green technology.

Currently, the UK heating industry contributes to one-third of the UK’s annual carbon footprint. That means a big shift will be required to get that down and hit climate targets.

In the short term, there could be some pain in making that transition, but long term it is going to happen.

So what can we expect to see?

Heat pumps

Currently, heat pumps are still not widely used. There are issues with cost, efficiency and reliability, however, all of these problems are fixable with time.

The cost of these pumps is already coming down, but this will drop significantly as demand increases and market forces take effect.

Efficiency has already increased in the last 10 to 15 years, going from a Coefficient of Performance of 2 to 3 - meaning they could produce 2 to 3 times as much heat energy as the electrical energy they consumed - to 5 to 6.

If we follow this trend, we can expect efficiency levels to go up even further. What’s more, as the industry matures the quality of installations will increase, further increasing efficiency.

We can expect to see low-cost, compact, and efficient heat pumps that are the new standard for the heating industry.

Viessmann, for example, has already created what they call an ‘invisible” heating system, which contains a heat pump, hot water cylinders and a ventilation system, all hidden neatly in the walls.

Currently, this is only available in Germany but innovations like this are only going to increase with time.

image of the invisible appearing at a long white box against the wall

Smart Heating and the Internet of Things

One development which is likely to become the new norm is the use of smart technologies connected to the Internet of Things.

Rather than just having a boiler that is switched on and off when it’s needed, heating systems will all be connected up and accessible on a mobile device.

This will provide the heating systems of the future with real-time information, allowing them to make predictions and implement routines based on people's living habits.

For example, a person will be able to switch their heating on and off from their phone, or the heater could turn on automatically based on a phone's proximity to the home.

This will allow for far more tailored and optimised routines resulting in greater efficiency and comfort. This will also make maintenance easier, with smart systems able to diagnose and alert potential issues ahead of time.

Expect to see a far more integrated home system, where every aspect of heating and maintaining the warmth in your home is interconnected and optimised.

For installers, they will need to up-skill and increase their understanding of smart technologies and develop a broader awareness of other related technologies.

smart thermostat screen


Despite the limitations, there is a future for hydrogen in the long term.

The reality is that the UK heating industry is not going to be able to rely on one form of energy. Although we can expect heat pumps to become the dominant form of domestic heating, hydrogen does have a place in the industrial sector and as a form of storage.

Due to the fact that industrial processes require far higher temperatures than domestic properties, then they are going to need a green fuel source that can deliver this.

In the future, large industrial plants will run off hydrogen energy, however, they won’t necessarily need to be reliant on the national grid.

Many industrial processing plants are already looking at self-hydrogen production and it seems likely this is the route they will go down.

Hydrogen also has a place as a form of energy storage for excess green energy.

Energy storage

The future of the heating industry won’t just be about producing heat directly but will also require effective energy storage that can be released at times of low production and high demand.

Hydrogen is likely to become one of the leading forms of energy storage.

Large amounts of green energy can be produced and converted into hydrogen which is stored either in high-pressure containers or as a liquid. This can then be converted to electricity to power heat pumps or other heating systems when energy production is low.

The other promising technology is thermophotovoltaic or TVP storage.

This works by storing heat energy in graphite blocks and transferring this heat between different chambers via molten tin. Tungsten foil is then heated, producing large amounts of light which is picked up by voltaic cells that convert it into electricity.

This form of storage has been shown to be 50% efficient (10% higher than hydrogen) and 30 times more cost-effective than lithium-ion batteries.

There are also other technologies in development such as gravity-based batteries, the use of superheated bricks and sand heat storage.

All of these forms of energy storage as well as private lithium-ion battery storage at domestic properties and offices will create a shift in how heating is produced and managed.

The future of heating will see a far bigger focus on electricity production which can be converted to heat and the storage of this energy for controlled use.

The future for heating installers

With all these developments, those working in the heating industry may wonder what the future looks like for them.

Without question, there are going to be a lot of changes and installers will need to be proactive about upskilling and adopting new technology.

It seems highly likely that there will be a move away from gas boilers and a shift towards heat pumps and electric storage.

While there will be a lot of change there are also great opportunities. For those installers and business owners in the heating industry who are proactive, there is a chance to establish themselves as leaders in this new technology and make good money.

Developing an understanding of heat pump technology, solar panel installation and battery fitting and maintenance will allow heating experts to get ahead and play a leading role in this move into a greener future.