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Economy

Heat of the Moment

Seen as a solution to global net zero goals, as well as an efficient and cheap way to heat and cool buildings, heat pumps are expected to be a crucial technology. But as uptake is slower than expected, the industry says more government support is needed, as well as technological breakthroughs

By Xie Ying , Zhou You Updated Jan.1

Holtop, a leading manufacturer of air to air heat recovery equipment, demonstrates its energy-saving air-source heat pump solutions during the China Refrigeration Expo held in Shanghai, April 29, 2025 (Photo by VCG)

Despite the sweltering summer highs of 39 Celsius outside in mid-June, inside the stadium people felt cool and comfortable.  

Interior temperatures at the Oriental Culture Stadium in Shijiazhuang, capital of North China’s Hebei Province, are kept constant by the 20 heat pumps installed on top of the five-story building.  

The stadium manager, who did not wish to reveal his name, said the system was installed over a year ago, and maintains an ambient temperature of 18 Celsius all year round.  

In Zhao County in Shijiazhuang, China’s biggest centralized heating system using heat pumps covers four square kilometers. It was installed six years ago.  

Running on electricity, heat pumps move heat from an air or ground source, working like a fridge in reverse. They can heat and cool, and if they are powered by green energy such as a solar power and battery storage system, are zero carbon. They can also use waste energy, such as heat from a factory or data centers.  

Theoretically, because heat pumps transfer heat and do not generate it, they are much more energy efficient than regular boilers and are cheaper to run. A heat pump has a compressor to move a refrigerant through a refrigeration cycle, and a heat exchanger, which extracts heat from the source, delivering heat to buildings via radiators or underfloor heating. They can be used in industry too, delivering heat in the form of steam or hot air and water.  

Large-scale heat pump systems like those in Shijiazhuang are rare in the country, due to costs and technological barriers.  

In March 2025, China’s National Development and Reform Commission issued an action plan to promote heat pumps, calling for technological breakthroughs in high-power, high-temperature units and expanded use scenarios by 2030. Experts said the industry’s growth depends on increased government support and how well it upgrades technologies to seize market opportunities. 

A Lot of Hot Air?
Yue Jianfu, former director of the heat supply department of Shijiazhuang’s urban management bureau, said the city started developing heat pump systems in 2015, when they were installed in a residential community in a high-tech industrial zone. 
 
Yue told NewsChina that heat pumps were first used in areas where it was hard to extend traditional heating systems.  

China’s energy transition began to speed up in 2014, according to Yue, as the central government promoted energy production and consumption reform. At that time, Shijiazhuang, like much of northern China was home to heavy industry and extensive coal mining and plagued by heavy air pollution. Rural areas still relied on coal for winter heating.  

When government renewal programs started to demolish areas of old village housing which had been engulfed by urban expansion, construction of new apartment blocks provided an entry for heat pumps to be installed.  

“In 2010, the area of Shijiazhuang covered by the centralized government heating system was 67.41 million square meters, but it shot up to 230 million square meters in 2025,” Yue said.  

“In most northern cities, rapid urban expansion has brought about a sharp increase in demand for heat supply, and China’s carbon [reduction] targets have provided a good opportunity for the heat pump industry,” he added.  

To control air pollution, Shijiazhuang demolished several big thermal power plants and central heating boilers in downtown areas, and developed a program that transfers surplus industrial heat from suburban plants to urban areas. In 2017 when the central government released its action plan on air pollution control, Shijiazhuang launched a clean heating program to replace coal use with clean energy. Similar programs were launched in other cities that suffered from heavy air pollution, like Beijing and Tianjin.  

Clean heating includes electric and natural gas-powered heating. But as gas heating requires a pipe network and is affected by global price fluctuations, the “coal-to-natural gas” program did not run as smoothly as expected.  

“Many suburban or remote and rural areas didn’t have a gas pipe network, given the huge cost of construction and maintenance. But every corner of China has electricity, so ‘coal-to-electricity’ is more suitable for those areas,” a retired engineer surnamed Gao, a former employee of a coal-fired power plant in Beijing, told NewsChina.  

Media reported that in the winter of 2017, the “coal-to-gas” program was stymied by a rush to replace coal heating systems in homes before other systems were in place – and lack of natural gas. China’s self-sufficiency ratio of gas was 59 percent in 2023, according to a 2024 report by the National Energy Administration.  

Experts warn that gas is not always the best solution for heating in some remote areas, and that it still emits air pollutants like nitrogen oxide, though at much lower levels than coal burning.  

Wang Zhigao, urban and regional development executive director of the Energy Foundation (EF China), an independent organization focused on clean energy and emissions reduction, told NewsChina that a heat pump system is more flexible than a traditional heating system. They can either be installed in each household or homes can be part of centralized heating networks like in Shijiazhuang’s Zhao County.  

According to engineer Gao, Beijing’s “coal-to-electricity” program started in 2003, mainly in suburban and rural areas. The program has since accomplished 80 percent of the required replacement.  

“We installed our first [household] heat pump in 2015. Before that, we used coal... and we had to spend so much time transporting and cleaning up [storage areas],” Lü Chao, a resident in a village in the outskirts of Beijing, told NewsChina.  

“The government is really promoting the ‘coal to electricity’ program by subsidizing this transition. Since 2015, 100 percent of the households in our village have shifted to heat pumps,” he said, adding that the government provided pumps to each household for free and gave villagers subsidies for electricity use.  

“In my old home, which was about 70 square meters, we had to spend at least 4,000 yuan (US$574) just for heating each year based on the coal price 10 years ago. That was for about three tons of coal. Since we started using the heat pump, we’ve been paying less than 3,000 yuan (US$429) for electricity annually,” he said.  

Lü and other villagers told NewsChina that their homes feel warmer now than when they burned coal, and the heat pumps are more stable and convenient.  

Energy efficiency is expressed by the coefficient of performance (COP). For heat pumps, it is measured by dividing the heat output by the electrical energy input. The higher the COP, the more efficient it is.  

“The COP of heat pumps is usually 2.5-4, and maybe higher than 4 when the surrounding environment is particularly suitable. It means each unit of electricity consumed has an output of four units of heat,” Zhao Hengyi, deputy director of the China Energy Conservation Association (CECA), told NewsChina.  

“In North China, heat pumps may maintain the temperature at 18 C or above, and they can operate even in extremely cold [northern] areas like Harbin and Mohe where it’s often -30 C in winter, though the COP may be a bit lower,” Wang Zhigao said.  

“Compared to air conditioners, heat pumps are designed to apply to a wider range of areas, especially in extremely cold areas where heat pumps are much more stable and efficient,” Gao said. 

Gree, a leading Chinese air conditioner manufacturer, showcases its high-capacity, high-temperature centrifugal heat pump for industrial use at the China Refrigeration Expo held in Shanghai, April 29, 2025 (Photo by VCG)

A worker works on the assembly line for ultra-low temperature variable-frequency air-source heat pump units at Gansu Hanchang New Energy & Environmental Protection Technology Company, Zhangye, Gansu Province, June 7, 2024 (Photo by VCG)

Slow Take-up 
But adoption of heat pumps for centralized heating networks has been slow, which accounts for only 7 percent of the country’s total heat supply, Wang Zhigao said.  

He attributes the low take-up to existing subsidies given to consumers, which make heat pumps less attractive than conventional energy sources. “Without the subsidies or other strong support polices, in most cases, traditional energy sources still have price advantages,” Wang said.  

“Many local governments believe that electricity is a higher-quality type of energy than heat, so officials may think that using electricity to supply heat is a waste of energy,” Yue told NewsChina. “Furthermore, heat is only needed in winter and traditional centralized heating has been trusted by people for decades. Alongside the high cost of infrastructure and facilities, local authorities feel reluctant to make such a big shift,” Yue said.  

In many Chinese residential compounds, centralized heating is provided by State-run companies, using systems that leave residents unable to control temperatures in their individual units. The heat, usually supplied by water-heated radiators through a central network of building pipes, is switched on and off on certain dates according to region and average temperatures, and residents pay a fixed fee for the whole winter based on the size of their apartment. In rural areas, and those south of the Yangtze River, residents have to arrange their own heat supply, as it was deemed these areas did not need central heating.  

Working in the sector for 14 years, Yue said that the current heating system, which mostly uses coal to heat water, suffers from high heat loss through pipes, inflexibility for users who cannot adjust the temperature, and uneven distribution across households, especially in old compounds with outdated heat supply networks.  

“Many central heating pipes are very long, with a diameter of over 1.6 meters, and the water weighs thousands of tons, so it’s hard to precisely control the temperature. The heat supply networks we have now are usually very crude and imprecise,” Yue said.  

Such disadvantages may be further aggravated if they shift to centralized heat pump networks without necessary hardware like radiators and thermostats, according to Yue.  

Gao agrees. “Central heat pump units need more space than a coal-fired boiler room, since the equipment is very large and the units need lots of room around them [for air circulation], otherwise they may cause a ‘cold island’ or ‘heat island effect,’” he said.  

The “island effect” means the temperature of areas near pump units becomes obviously lower or higher than surrounding areas, which reduces the efficiency of heat exchange.  

To solve that issue, enough space for air circulation is required, Gao said.  

That is why Zhao County’s big pump units were built on an empty lot, with an underground parking lot beneath. The heat pump units sit on top in the open air. However, this model is difficult to achieve in crowded downtown areas.  

“If a building doesn’t have enough space for [central] heat pump units, it’s difficult to use heat pumps, as their efficiency is much reduced in narrow spaces. Meanwhile, we have to consider the noise problem. These problems are actually similar to those of big air conditioners,” Wang said.  

Zhao believes that replacing coal heating with central heat pumps might not work. “The ideal is to install separate heat pumps for each household that support separate adjustment and use,” he said.  

But interviewed users of household heat pumps told NewsChina that without subsidies, they are too expensive to buy. One user who refused to reveal his name told NewsChina that the heat pump in his 100-square meter apartment cost over 20,000 yuan (US$2,857). Although their first pump was free, it stopped working after about seven years, and the subsidy to get a new one was only 6,000 yuan (US$857), one-third of the cost.  

“If we didn’t get the electricity subsidy, we couldn’t even afford to keep it on all day,” he said. Subsidies for electricity to low-income households vary by region. In Beijing’s outer Huairou District, residents receive 0.1 yuan for every non-peak unit of electricity used.  

“If we use heat pumps to heat and cool a 100-square meter, two-bedroom apartment, the basic equipment may cost more than 20,000 yuan (US$2,857), while running costs depend on how much domestic electricity costs in the area. Heat pumps will only prove they are more effective if domestic electricity charges are low,” Wang Shuguo, a heat supply engineer at the Institute of Tsinghua University, Hebei Province, told NewsChina, adding heat pumps now usually last for 10-15 years. 

Not Pumped 
Zhao said the heat pump industry needs much more promotion so it can compete with other energy systems and increase market share. “We can’t survive on government subsidies only,” he said, adding that the heat pump market makes around 30 billion yuan (US$4.3b) in sales each year, with around 70 percent from private purchase.  

A director of a heat pump enterprise in Beijing who did not reveal his name told NewsChina they have to look for clients themselves.  

“It’s very hard to promote heat pumps to ordinary residential compounds – maybe developments of detached houses are more suitable as they’re bigger,” he said, adding that heat pumps are now often used to supplement traditional heat supply, with installations in new buildings or industrial zones.  

Interviewed experts suggest heat pumps should expand into southern areas of China where there is no winter central heating supply, but temperatures can still be low.  

“After we make core breakthroughs in high-power, high-temperature pumps, high-efficiency compressors and new refrigerants, the use scenarios for heat pumps may extend to cold-chain transportation and food processing,” Wang Shuguo said.  

He pointed out that utilization of surplus heat is a solution for China’s carbon targets. “Surplus heat from urban and industrial wastewater and gas, and from data and computing centers, is being emitted. There’s a great deal of potential in collecting and recycling this scattered and low-quality heat, and heat pumps may be key to recycling it,” he said.  

According to the government’s action plan, upgrading the heat pump industry will focus on the design, production and maintenance of pumps, with use of AI and smart tech encouraged.  

The anonymous technological director of the Beijing heat pump enterprise said that several enterprises have already tried to use AI to more precisely control heat exchange temperatures in pumps, but they are not on sale yet.  

“We expect that future households will use just one heat pump for heating, cooling and hot water,” Wang Shugao said. “If we make technological breakthroughs in heat storage, we can also store heat emitted from cooling for use in winter. That’s pretty much zero cost, and it means heat supply enterprises will become an energy service supplier,” he added.  

Internationally, heat pumps are considered crucial to achieving carbon neutrality goals, Wang Zhigao said. Based on the International Energy Agency’s Net Zero Emissions by 2050 Scenario, heat pumps should account for 52 percent of the world’s heat supply market. In China, heat pumps should account for around 30 percent of residential and commercial heat supply. Given fluctuating natural gas prices influenced by the Russia-Ukraine war and the increasingly urgent demand to fight climate change, some countries are doing more to promote heat pumps.  

Many German regions offer generous subsidies for homeowners who want to install heat pumps. 

“In March 2025 I attended a heat supply expo in Europe and learned that people in Germany could receive a government subsidy of up to 50 percent of the price of a new heat pump,” Wang Zhigao said.  

A German law in 2024 offered subsidies of 30 percent of the cost of installation, with a further 20 percent offered to those replacing a gas or coal system before 2028. Low-income households can apply for more assistance, according to German broadcaster Deutsche Welle in September 2024.  

Wang Zhigao said the Chinese government is gradually providing institutional support for heat pumps, including its push to exchange old equipment and appliances for new, more environmentally friendly models, which includes heat pumps in some regions.  

“In the future, heat pumps may be preferred for heat supply when ultra-low-energy-consumption buildings and zero-carbon buildings are further promoted and expanded. This way, we can reduce reliance on large-scale centralized heat supply systems and heat networks,” Wang Zhigao said.  

But more action is needed, according to Yue. “The heat pump industry still needs support from government policies and standardization to encourage enterprises to upgrade their technologies and commercialize their products. Meanwhile, the industry needs a fair and reasonable environment for equal competition with other means of heat supply. We expect that in the future, infrastructure investment, energy prices and subsidies for different means of heat supply will undergo a shake-up, and the market will decide resource allocation and technology choice,” he said.  

“We could be on the cusp of rapid development in the heat pump industry,” Wang Zhigao said.
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