Future of Space and Water Heating 

In 2021 the climate charge commission released its draft proposal to the government on how New Zealand could meet our legislated objectives to become carbon neutral by 2050. The initial public submission was further updated in June 2023. 

One of the key elements of the commission’s recommendations, that directly impacts on the heating and cooling industry, was “To Develop a plan to transform buildings to low emissions”.  

The Commission report under Section 7.3 has outlined recommendation for building as part of their demonstrated pathway. 

Outlined below are the key recommendations: 

  1. Focus will be on lowing heat demand by 6% by 2035. This will be achieved by improved insulation standards (New H1/H2 standards).
  2. There is an assumption in the modelling that all new builds will require 35% less heating compared to today’s performance.
  3. Transition homes/buildings away from coal and fossil gas.
  4. Heat pumps will offer lower cost options to heat homes and hot water production.
  5. The commission identified significant opportunity to replace existing commercial and public buildings fossil fuel systems with low emission central heated systems using heat pumps and biomass, modelling is based on heat load reduction of 25% by 2035 for all new commercial builds.
  6. Recommendation is that all new space heating or hot water heating installed after 2025 and all buildings be heated/cooled with decarbonised technology by 2050.
    For existing buildings phase out begins in 2020. No fossil gas connections to grid or bottled LPG after 2025.

Please note this recommendation has not been committed to by the government. There continue to be industry discussions regarding biofuels and hydrogen however there is a lack of commitment from the government to support these alternatives commercially.  

(Refer to Stuff Article Here.) 

There are also other factors contributing to changes in the market:

  1. The high cost of refrigerants
  2. Health and safety concerns with regard to the potential risks of refrigerants leaks coming into contact with building occupants

Potential Impact of all these changes 

A growing demand for hydronic Air-to-Water heat pumps not only to heat buildings but also for domestic hot water
Between now and 2035 there will be a decline in the use of gas and diesel boilers. 

Potential Product Changes 

Water Heating 

  1. Small 4-6kW heat pumps either integrated with cylinder or sold separately
  2. Integrated hot water and space heating of homes using Air-to-Water heat pump.  

This is nothing new to Central Heating New Zealand and has been part of our value-added options for several years.  

Home Heating 2022-2030

Home Heating will transition to high wall heat pumps, ducted heat pumps or Air-to-Water heat pumps or biomass boilers as the more prevalent mediums for heating and cooling homes. 

  1. Hybrid heat pump and gas or diesel boiler. As the industry transitions away from fossil fuels we see an opportunity in the market to offer a smaller kW heat pump and reused existing boiler configurations as a steppingstone towards fully integrating Air-to-Water heat pump. This reduces the overall capital cost of the installation.  
  2. Transition diesel boiler installs to either biomass boilers or Air-to-Water heat pumps. 
    High temp heat pump technology is evolving and there is an opportunity for this technology to fill a void in the market, but there is a misconception in the market that High Temp Heat pumps will be a like for like replacement for Gas or Diesel Boiler. 
  3. High Temp heat pumps will definitely play a part in the transition away from Fossil fuel dependent systems however there are some limitations with the technology that need to be understood in order for existing central heating system to deliver the same level of comfort that it once did when powered from a boiler.
    • Heat pumps and boilers operate in very different ways, part of this is that to meet their set point they will want to have a 5°C delta (difference) between their flow and return temperatures. As the existing boiler system will have been designed to operate on a larger 20°C delta, additional equipment such as a buffer tank and additional system pump may be required to ensure correct operation of the heat pump. Additionally The COP (Coefficient Of Performance or efficiency) and the maximum flow temperature of these units, decreases as the ambient external temperature drops, meaning in low ambient conditions (especially in some of our colder climates, such as the lower south island where our 2.5% design temperature can be as low as -5°C a single heat pump without an additional heat source may struggle to meet the load of the building.