Cygnet or ugly duckling – what makes the difference? A tale of heat-pump market developments in Sweden

Lars J. Nilsson, Max Åhman, and Joakim Nordqvist, Lund University

Keywords

Market transformation, Policy environments, Procurement, Residential heating, Heat pumps, Technical change, Transition management

Abstract

Who can pick a winner? Since 1974, various types of targeted support have at different times been directed at the development of the heat pump market in Sweden - which in the following decades oscillated violently between soaring sales and collapse. Eventually, however, small heat pumps for space heating of residential buildings have in recent years securely established themselves as a mature and competitive technology within the Swedish energy system. This presentation portrays the events and actors that defined the formation and transformation processes of the heat pump market segment in Sweden, extracting pieces of experience that contribute to our improved understanding of how combinations of policy instruments, their application and termination, can affect whether a technology is perceived and received by the market as a handsome swan-to-be or no more than a simple duckling.

Despite failing policies and markets, and despite continuously changing drivers in national energy policy, this technology has now lived up to the expectations of its proponents of the 1970s. One part of the explanation is found in the unique composition of the Swedish electricity supply and energy mix. Another is the perseverance of important key actors. A third part lies within the learning process that has taken place on the policy-making arena, and among manufacturers, installers, etc. Observations are made concerning the prospects for managing technical change. The evolution may be seen as an uncoordinated transition management process over 25-30 years. A coordinated effort might have produced better results, but it is not clear whether it could have been sustained over such a long time period in changing organisational and political contexts.

A number of evaluations of policy instruments used in efforts to manage heat pump development have been performed along the way. These provide important information about the course of transpired events. But it is noted that such documents are permeated by the context in which they were written. Their assumptions and results need to be read and interpreted accordingly.