New government statistics reveal a significant fall in UK heat pump installations during Q2 2026, challenging the national target of 450,000 installations per year by 2030.

UK Heat Pump Rollout Sees Q2 Dip Amidst Ambitious 2030 Goals

Recent statistics from the Department for Energy Security and Net Zero (DESNZ) indicate a significant slowdown in heat pump installations across the UK during the second quarter of 2026. Despite a general upward trend in deployment over the past five years, the period from April to June 2026 saw a 22% reduction in retrofit installations compared to the same quarter in the previous year.

The data, released as 'Official Statistics in development', provides a crucial update on the progress towards the government's ambitious target of 450,000 heat pump installations annually by 2030, as outlined in the January 2026 'Warm Homes Plan'. While 2025 recorded 48,857 retrofit installations, marking a 9% increase from 2024 and over four and a half times the volume of 2020, the current year's performance suggests a potential deceleration.

Challenging Targets and Methodological Development

The DESNZ report, developed in collaboration with the Welsh Government, Scottish Government, and the Department for the Economy Northern Ireland, focuses on retrofit installations in existing properties. The statistics do not yet include installations in new-build properties or those without Microgeneration Certification Scheme (MCS) certification, areas which DESNZ aims to incorporate into future releases to provide a more comprehensive picture of total deployment.

Since March 2026, the scope of these statistics has expanded beyond solely government-supported installations to cover all retrofit installations, addressing a recommendation from a March 2024 National Audit Office report on decarbonising home heating. This broadened coverage aims to offer a clearer understanding of the market's trajectory.

Image: gov.uk

Performance Against Historical Data

Cumulatively, the first two quarters of 2026 saw 20,895 heat pump installations, a notable decrease from the 26,768 recorded during the same period in 2025. This 22% year-on-year drop for Q2 presents a challenge for the sector.

However, the long-term trend remains positive. The 2026 Q1-Q2 figure is nearly double the 10,605 installations from the corresponding period five years ago in 2021, demonstrating substantial growth over half a decade. This contrast highlights the volatility of quarterly figures within an overall expanding market.

The government's 'Heat and Buildings Strategy', published in October 2021, initially laid out plans for decarbonising buildings and scaling up heat pump deployment. The recent 'Warm Homes Plan' reiterated and reinforced these targets, making the quarterly performance particularly scrutinised as the 2030 deadline approaches.

What this means for asset owners and insurers

• Market Volatility & Business Interruption (BI): The fluctuating installation rates could impact the revenue streams and business continuity of installers and manufacturers. Insurers may need to consider this market volatility when assessing BI risks for companies in the heat pump supply chain.
• Installation Quality & Professional Indemnity (PI): As the sector scales up, maintaining high installation standards is crucial. Any rapid increase or decrease in demand could pressure installer capacity, potentially leading to errors. PI insurance for installers and contractors remains vital, covering potential claims arising from faulty installations or design.
• Property & Liability Risks: Heat pump systems, while generally safe, carry risks such as water leakage, electrical faults, or refrigerant leaks. Asset owners need comprehensive property insurance, and installers require Public Liability (PL) insurance to cover damages or injuries to third parties during or after installation.
• Technological Advancement & Obsolescence: Rapid advancements in heat pump technology, coupled with evolving policy incentives, mean that asset owners need to consider the long-term viability and efficiency of their installed systems. Insurers may need to adapt policies to cover against unforeseen technological obsolescence or significant efficiency changes.

Source: gov.uk