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The Evolution of the UK HOT WATER & HEATING MARKET

   

Rinnai’s Chris Goggin examines the current UK heating and hot water markets with a detailed statistical analysis of each notable sector to reveal the preferred methods of supplying both residential and commercial properties with warmth and DHW. This review will also look at the impact of legislation upon customer options.

 

Technology used for heating and hot water options is both a major contributor and solution for lowering emissions. Gas boilers have long been identified as a cause of rising global temperatures but still the gas boiler maintains a central position in heating and hot water options due to customer convenience, cost, current infrastructure and regulations allowing for their permissibility for the mid to long term.

 In time, if hydrogen gas mixes are made available, UK emissions emanating from natural gas-powered systems can also be reduced. However, despite a large increase in the portfolio of available appliances that deliver domiciles and commercial properties with heating and hot water, there is still widespread UK customer reluctance to purchase alternative forms of technology, such as solar, heat pumps and hybrid DHW systems. If gas boilers and water heaters are readily available and there are plentiful reasons as to why this is the case, ranging from a distress sales situation to a lack of trained installers through to cost and perceived practicalities.

 This is problematic towards the aim of decarbonising 28 million dwellings and a further 2 million commercial premises in the UK. By 2028 the UK is determined or at least has the ambition to install 600,000 heat pumps nationwide. In 2024 the total number of heat pumps that had been installed in households across the UK stands at around 320,000. More than 65,000 have been installed from January 2024 to May 2025. UK heat pump installations throughout 2024 experienced a 40% increase – predominantly due to the government funding afforded to them.

Although, renewable energies and technologies are undoubtedly rising and have never been more attractive to UK customers, the problem is centred on more convenient, familiar and cost-effective energy – natural gas.

Gas boilers remain the dominant form of heating and hot water provision for domestic and commercial properties. Domestic gas boiler fittings are greater than heat pump connections by more than 15 to 1 in 2024. Despite national heat pump targets, only one in eight newly constructed homes were equipped with low carbon alternative technological options. Of the new build homes constructed in the UK throughout 2024 13% were finished with heat pumps as a primary source of heating and hot water. This is set to change with the Future homes standard and future building standard – however the replacement market remains a serious barrier for adoption.

A recent article published in the national UK media revealed that 1.5 million gas boilers were fitted across all sectors in the UK, most of which were replacements. Cost is an important factor once a UK household decides not to accept heat pumps over gas boilers. Costs relating to initial heat pump purchase for domestic properties range in between £5,000 and £18,000 whilst initial purchase costs of gas boilers start at £1,600 and can be up to as much as £6,000 – the figure skyrockets with commercial systems yet the sizeable cost difference between gas fired systems and heat pumps remains. High income households and successful commercial enterprises are more likely to view heat pumps as a viable purchase option.

Domestic and commercial Heat pump utilisation is vital towards UK national decarbonising efforts. If NetZero targets are to be met 450,000 households will have to make the switch to heat pumps every year by 2030. Heat pumps offer clean energy usage that alleviates the atmosphere from toxic pollutants in a way that gas boilers cannot albeit to be truly effective the UK government must continue the greening of the electricity grid.

Other alternative forms of clean energy that have become attractive to UK customers include solar. UK residential solar installations throughout February 2025 have contributed a large percentage of UK national solar capacity – 58MW and account for 73% of newly placed renewable schemes.

Statistics accumulated and released by the Microgeneration Certification Scheme (MCS) state that in between January 2024 and January 2025, 2000,010 home solar PV installations were implemented. 2024 saw 2.3GW of solar deployment across the UK, 20% of this is attributed to domestic rooftop solar panels with a further 20% deriving from commercial premises.

A rise in solar purchases can be explained by a drop in average cost to installation in UK household. January 2024 witnessed a domestic mean price of £9,238, whilst in December of the same year the average cost dropped to £7,561. The total average for the year rested at £ 8,198.

Policy is contributing towards the way in which homeowners and businesses select heating and hot water options. The UK alongside Ireland and Portugal were the only three European heat pump markets to expand last year, with sales in France and Germany being significantly reduced due to electrical costs, regulatory and political uncertainty as well as a lack of progress in new construction projects.

Heightened public awareness and acceptance of renewables due to policy amendments is also responsible for a huge increase in solar power distribution. Since 2010 there has been a 18,000% increase in total UK solar capacity. Solar options are popular amongst homeowners with an estimated 1.5 million UK domiciles owning solar panels.

Policy updates and NetZero aims continually produce better market conditions, refinement in technologies and increases in personnel capable of delivering decarbonising product installation. In 2024, 9,062 individuals successfully completed heat pumps training qualification courses, equating to a 15% increase from 2023.

Despite the dominance of gas boilers as heating and hot water provision for domestic and commercial properties alternative clean and renewable energy markets continue to grow and gain traction. Additional legislation like the Future Homes Standard 2025 and more stringent conditions towards EPCs (Energy Performance Certificates) will strengthen directives that enforce cleaner energy technologies upon households and commercial dwellings.

Future UK energies aim to be carbon neutral, all current renewable markets are in a healthy position and continue to expand with additional growth expected in the coming years. Work on encouraging lower income households also continues. It is estimated that only 19% of heat pumps are in the poorest third of areas whilst 45% are installed in the richest third of neighbourhoods. Initiatives like the Boiler Upgrade Scheme are assisting these ambitions.

Domestic and commercial properties are adapting the way in the which the UK seeks out and distributes cleaner energy, meaning that natural gas usage will be at some point be vastly reduced, then eliminated altogether.

 

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INSTALLERS ACROSS UK SPEAK ON THE DIRECTION OF CURRENT & FUTURE COMMERCIAL & DOMESTIC ENERGY 

 

  
 
  
Chris Goggin expands his recent discussions that focused on the concerns of heating engineers and system designers regarding the malleable condition of UK energy policy. He has listened to 10 installing contractors, from all parts of the UK for their views, from a pragmatic level on how they see the market and developments.

 

 

Rinnai has continued to listen to 10 professionals who specialize in domestic and commercial properties with heating and hot water provision. We asked them a series of further questions and promised anonymity so that they could speak freely. Heating engineers, system designers and boiler installers were asked what current systems and appliances attract customer interest, what future options do they consider viable and if they worry about a lack of clear governance affecting their future.

A range of professionals who work in heating and hot water from across northern, east midlands, southern England, and Scotland share what they think on the UK government’s strength of direction relating to future energy dispersal.

The southeast region of England is the most affluent and holds the highest population density in the country. Four installing contractors who specialize in commercial and domestic heating were asked on their thoughts about central policy and governmental direction.

Please note that these are personal views from a selection of installers around the UK.

An installer from Orpington, Kent said:

“I’m only currently fitting gas equipment now. In terms of the future, I think hydrogen will be used over electric boilers. Electric boilers are expensive and need an electrician when fitted. They’re inconvenient and costly.”

A gas engineer located in Sevenoaks, Kent shared his observations:

“I like the idea of hydrogen going forward. The only thing that worries me is extra costs that installers must incur through regulations and yearly skill renewal classes. I’m not a huge fan of heat pumps, they can be temperamental. I recently had to take out heat pumps from a whole block of flats. Once temperatures dropped below zero outside, they stopped working.”

 A solar engineer based in Biggin Hill, Kent recently switched from installing gas equipment to fitting solar panels shared his thoughts:

“I didn’t want to be left behind because they won’t be fitting gas in new builds from 2025. All in all, I’d say solar offers proven technology, is best for the environment and can also be a good investment. I have heard of hydrogen but don’t think it is proven or profitable enough for the government to use.”

A gas engineer from Croydon, Surrey offered similar opinions:

“I think the industry has already started to go solar. If you don’t mind the sight of them on your roof, solar panels can be a good investment. Now I’m fitting more gas equipment than anything else. Hydrogen can be used but extra registration costs worry me.”

A gas engineer from Birmingham is aware of a change to UK energy dispersal – he says:

“I still fit gas boilers but have also completed a solar course. I’m still not one hundred per cent sure where the industry will go in the future. It makes sense to think that the government will move towards solar as they profit from it. I’ve heard of hydrogen, but I don’t think big business, or the government will want to use it. It’s cheaper to run and better for the environment but less profit for the big cats. I can’t see hydrogen being used for those reasons.”

A plumber from Nottinghamshire is not happy with the current quality of governmental advice, he added:

“the government need to clearly outline the future after natural gas heating, so we know where to focus our attention. It worries me, do I go solar, electric or hydrogen? I’m not being told anything useful, and I’m worried for the future.”

A gas engineer based in Sheffield, Yorkshire believes future UK power will not be gas based:

“the future is heating pumps and solar. I’ve worked with both and can recommend either of them to my customers. I cannot see hydrogen being used – no way. Existing pipework can’t withstand hydrogen. All pipework will have to be replaced with plastic to cope with hydrogen. That’ll be too costly. Hydrogen can be used for industrial purposes but not for domestic heating.” When also asked on any future fears for job security: “none, I already work in other areas other than gas.”

Another located in Sheffield, Yorkshire feels the future should be focused on green gasses:

“looking at the options available to heating I’d have to pick hydrogen – although there are no domestic boilers available, apparently, they are on their way. Electric is too expensive, and I don’t trust solar. I’m currently advising my customers to update their appliances over the coming years to accept hydrogen.”

A gas engineer residing in Glasgow, Scotland, agrees with hydrogen:

“we must go hydrogen because it’s compatible with existing infrastructure and the cost won’t be too different to switch your gas system over. It’s best for the environment and all other options have flaws. I’m not concerned for my future.”

Another gas engineer who works in Glasgow, Scotland, is more sceptical on the overall direction of the UK government:

“I know the goal is no more gas equipment by 2025, but that’s only new builds – and what are new builds after 2025 getting? Hydrogen could be an easy switch over but there isn’t even any hydrogen equipment or large-scale hydrogen available and we’re two years off. I don’t think the powers have made up their minds. I’ll be okay, I’ll adapt to whatever they come up with.”

 

It is evident that heating professionals believe they are provided with unclear information of future UK energy dispersal and could benefit from agreed centralized instructions. Decarbonisation of all industrial, domestic, and commercial UK practises is a huge task – however, insight passed down to installers from the UK government could help to accelerate UK decarbonisation aims.

Rinnai understands the current pressures faced by installers, system designers and customers alike. Rinnai aims to provide all customers and professionals with information that creates a better understanding regarding all UK energy matters. Enhanced levels of knowledge encourage improved decision-making skills when purchasing a heating and hot water system.

CLICK HERE TO VISIT THE RINNAI WEBSITE

or HERE to EMAIL RINNAI

CLICK HERE For more information on the RINNAI product range

 

RINNAI’S H3 DECARBONISATION OFFERS PATHWAYS
& CUSTOMER COST REDUCTIONS FOR
COMMERCIAL, DOMESTIC AND OFF-GRID HEATING &
HOT WATER DELIVERY
                                                   

Rinnai’s H3 range of decarbonising products include hydrogen / BioLPG ready technology, hybrid systems, and a wide range of LOW GWP heat pumps and solar thermal. Also, within Rinnai’s H3 range is Infinity hydrogen blend ready and BioLPG ready continuous flow water heaters which are stacked with a multitude of features that ensure long life, robust & durable use, customer satisfaction and product efficiency.

Rinnai’s range of decarbonising products – H1/H2/H3 – consists of heat pump, solar, hydrogen in any configuration, hybrid formats for either residential or commercial applications. Rinnai’s H3 range of products offer contractors, consultants and end users a range of efficient, robust and affordable decarbonising appliances which create practical, economic and technically feasible solutions. The range covers all forms of fuels and appliances currently available – electric, gas, hydrogen, BioLPG, rDME solar thermal, low GWP heat pumps and electric water heaters.

Rinnai H1 continuous water heaters and boilers offer practical and economic decarbonization delivered through technological innovation in hydrogen and renewable liquid gas ready technology.

Rinnai’s H1 option is centred on hydrogen, as it is anticipated that clean hydrogen fuels will become internationally energy market-relevant in the future; Rinnai water heaters are hydrogen 20% blends ready and include the world’s first 100% hydrogen-ready hot water heating technology.

Rinnai H2 – Decarbonization simplified with renewable gas-ready units, Solar Thermal and Heat Pump Hybrids. Rinnai H2 is designed to introduce a practical and low-cost option which may suit specific sites and enable multiple decarbonisation pathways with the addition of high performance.

Rinnai H3 – Low-GWP heat pump technology made easy – Rinnai heat pumps are available for domestic and commercial usage with an extensive range of 4 – 115kW appliances.

Rinnai’s H3 heat pumps utilise R32 refrigerant and have favourable COP and SCOP.

Rinnai is a world leading manufacturer of hot water heaters and produces over two million units a year, operating on each of the five continents. The brand has gained an established reputation for producing products that offer high performance, cost efficiency and extended working lives.

Rinnai’s commercial and domestic continuous flow water heaters offer a limitless supply of instantaneous temperature controlled hot water and all units are designed to align with present and future energy sources. Rinnai condensing water heaters accept either existing fuel or hydrogen gas blends. Rinnai units are also suited for off-grid customers who require LPG and BioLPG or rDME.

Rinnai products are i2HY20 certified, A-rated water efficiency, accessed through multiple fuel options and are available for purchase 24/7, 365 days a year. Any unit can be delivered to any UK site within 24 hours. Rinnai offer carbon and cost comparison services that will calculate financial and carbon savings made when investing in a Rinnai system. Rinnai also provide a system design service that will suggest an appropriate system for the property in question. Rinnai offer comprehensive training courses and technical support in all aspects of the water heating industry including detailed CPD’s. More information can be found on Rinnai’s website and its “Help Me Choose” webpage.

 

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