After solar and wind, the next big climate technology to scale is heat pumps. They’re already gaining traction, but unlike solar panels, it looks like their cost won’t drop dramatically with manufacturing scale. Instead, their adoption will be driven by the spark spread—the difference between electricity and gas prices.
Research by Rob Wilkinson highlights this dynamic across Europe:
In the Netherlands, where the spark spread is low, payback times for heat pumps are under 3 years—making them an easy sell.
In the UK, with higher spark spreads, the payback period stretches to 7.5+ years—a hard sell for most households.
In Hungary, where gas prices are extremely low, payback hits 47 years—effectively killing adoption.
From my experience, anything over a 3-year payback struggles to gain traction in residential markets. That means if we want heat pumps to scale as fast as solar, governments and utilities will need to narrow the spark spread. The question is how? Lowering electricity prices is out of question for the moment, heat pumps already enjoy significant subsidies. Should there be higher gas taxes? Could be, to stimulate customers to move away from gas, as Europe depends on it either from Russia (which has fallen dramatically in recent years), or from LNG imports.
So, how do we bring down payback times and make heat pumps the next big climate success story? Thoughts? 🔥💡