UPDATED: New ASHP water heater subsidies stimulate heat pump market growth in China

China’s new subsidies for energy-efficient appliances mean consumers who purchase air source heat pump water heaters that meet specific energy-saving criteria can receive a subsidy of up to RMB 600 (EUR 76). 31 water heater manufacturers in China meet the energy efficiency standards and 9 of them qualifiy for the highest subsidy.The air source heat pump market in China witnessed a 33% growth in 2011. Many domestic manufacturers have begun t

In May China unveiled a series of policy incentives and subsidies to stimulate purchases of energy-efficient appliances. According to the Chinese Ministry of Finance, RMB 26.5 billion (EUR 3.3 billion) will be allocated to subsidise energy-saving household appliances including televisions, washing machines, air conditioners, refrigerators, water heaters and so on.

China’s generous subsidies to air source heat pump water heaters (ASHP)

Under the policy, consumers who purchase air source heat pump water heaters that meet energy-saving criteria can receive a subsidy of up to RMB 600 (EUR 76), around a 10 % discount in the sale price per unit:

Static heating ASHP water heaters with a Coefficient of Performance (COP) over 3.4 can enjoy subsidies from RMB 300 (EUR 38) to RMB 550 (EUR 70) per unit, based on their heating capacity

Direct heating ASHP or circulation heating ASHP with a heating capacity larger than 4.5kW and a COP higher than 3.7 can receive subsidies ranging from RMB 350 (EUR 44) to RMB 550 (EUR 70) per unit

For direct heating ASHP or circulation heating ASHP with a COP over 4.4 and a heating capacity larger than 4.5kW, subsidies can reach up to RMB 600 (EUR 76)

The subsidies are tentatively scheduled to last for one year from 1 June 2012 to 31 May 2013. The incentives apply to all manufacturers registered in mainland China, which also include the local offices of foreign-based manufacturers.

9 manufacturers to get the highest subsidy

After the Chinese government released its new subsidies for air source heat pump water heaters, 31 Chinese water heater manufacturers now meet the energy efficiency standards of the subsidy policy. Among the 31 manufacturers, only Gree, Tongyi, Changling and another 6 water heater manufacturers’ 60 type air source water heater are eligible for the highest subsidy, RMB 600 (EUR 76) per unit. For consumers purchasing these water heaters, the subsidy is equivalent to a 10 % discount in the sale price per unit.

Promising heat pump market in China

The market demand of air source heat pump water heaters in China is growing fast. In 2011, the sales of air source water heaters reached RMB 1 billion (EUR 126 million). According to the China Air Source Heat Pump Alliance, the annual production value of air source water heaters is estimated to reach RMB 10 billion (EUR 1264 million) by 2015.

GCiS, a China-based market research firm estimates that the heat pump market grew by an impressive 33% last year. The entire heat pump market is valued at RMB 9 billion (EUR 1138 million), with air source heat pumps accounting for about 42% of the total market. Of the RMB 3.8 billion (EUR 480 million) generated from all air source heat pumps sold, about 68% of them were from heat pump water heater sales.

Although R22 and R410A remains the refrigerants of choice at present, some producers such like Shanghai HIGHLY Group, Xian Qing’an, GMCC, and Guangdong Wanhe have begun to develop CO₂ heat pump and compressor systems.