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Undertake a scanning exercise of the UK market for Ground Source Heat Pumps. In particular, explore:

The macro environmental factors: to attempt to indicate how this sector might develop. (Both in the short and long term)

he micro environment, with a particular focus upon understanding the nature and basis of competition within the market and in attempting to identify viable market segments. In constructing segments, consideration may be given to a mix of factors including house type, ownership status, geographical location etc.

Note: whilst you may (should??) draw upon worldwide insights for the macro analysis, the micro analysis needs to concentrate upon the UK environment.

Then, taking one of the segments identified, undertake a viability analysis to gauge its future attractiveness / potential (or otherwise) over the next 5 years. The key financial data needed to do calculations against is supplied above, but ensure that you use this in line with the indicators gathered, e.g. market size, growth, etc, from the market data you gather

How GSHPs work

A GSHP is an electrically powered system which utilizes the relative constant ground or groundwater temperatures in order to provide heating, cooling or hot water as and when necessary. Instead of the burning of fossil fuels in order to create the heat like the usual systems that is the conventional method systems. In other words, the GSHPs move the heat that already is present. In a heating mode the GSHP helps in transfer of the heat from the building and its deposition into the ground water.

The geothermal system of heat exchange gives the ground source energy for the suitable systems of heating and cooling. The use of the “ground source systems” for the heating or the cooling procedures have increased in an exponential manner especially in the European country. The basic idea of the system has been existent for a long time where the heat energy which is stored in the ground is utilized and this energy is accessed by utilization of the heat exchanges which are buried in the ground. In ideal situations these systems can offer a bulk of the desired heating and cooling and significant reduction of the costs and carbon footprints.

A “ground source heat pump” system comprises of three simple constituents which are a ground loop, the heat distribution system and the heat pump itself. The horizontal trench or borehole is where the ground loops are buried. The trenches which are horizontal are dug at a level of 1.5-2 metres below the ground and despite they cover more land surface than a borehole they are usually less in price for smaller systems (Sarbu & Sebarchievici, 2014).

Drilling is done at a level of 15-150 metres and they benefit from the higher ground temperatures than the trenches. There are several nature of pipes that are utilized in a trench in place of a straight one that increases the heat that is absorbed form the ground and thereby improve the performance.  For heat absorption from the ground, the water and anti free mixture is put within the pipe. Heat is exchanged and the absorbed heat is then transferred to the heat pump by a heat exchanger. An anti freeze mixture or water is put within the pipe for the circulation where heat is absorbed from the ground The third most important element of a “ground source heat pump”, is the heat distribution system. It can be either radiators at low temperature or under the heating  of floor which are usually preferred.  In case it is required that the heat pump generates elevated temperatures for a radiator circuit which is conventional then the overall efficiency is bound to reduce (Montagud, Corberán & Ruiz-Calvo,F. (2013).

The three components of a GSHP system

Once ground pump installation has been done then there are no external fans or equipments are visible. It can therefore be said that the system is quiet in operation, does not issue any emissions and is very safe and does not require much of maintenance (Yang, Sun & Chen, 2015).

The ground source heat pump is an eligible renewable heat initiative (RHI) and there are two major types of “ground source heat pump” which are open loop system and the closed loop system.

The “closed loop systems” actually pump an anti free solution that are pumped through the pipes kept buried in the ground. The loop s are either horizontally installed in trenches or vertically into boreholes. The total strength depends on the heat pumps size as also the thermal conductivity where they are buried. In case the closed loop systems are poorly designed and installed they can result in ground freezing and efficiency as also the life of the heating system. However they can be installed at any place possible.

These are the most resourceful “ground source heat pump option”.  Heat is extracted from the aquifer with the help of boreholes that passed through heat pumps. This system is applicable in high ground water availability areas. It is possible to filter the water for domestic consumption before returning it to the ground by means of a harvesting link.

The Sun’s radiation heats the earth. The heat is then stored and ultimately maintains just two metres or so down where at around 9-11 degrees Celsius. Due to the ground source heat pumps the completely replenished are heat stores. The hot water provisions are needed for the buildings. Technology which is utilized is the same as that which is utilised in the refrigerators. In the similar way that the fridge does the ground source heat pump extracts the earth’s heat and transfers it to the building (Snape, Boait & Rylatt 2015).

The GSHP’s and 3-4 units are trapped and distributed by each of the electricity units. This implies that there is an efficiency of 300-400% in electricity utility. At this particular level of efficiency there will be lesser amount of carbon dioxide emissions in comparison for a heating system of a gas boiler. There might also be a provision for the required amount of electricity by renewable source of energy thus doing way with fossil fuel use of any sort and reduction of the overall carbon emissions.

Types of GSHP systems

The target market for the domestic homes has to target properties which give more and more appeal and demand to the pumps. There have been significant number of data which have been collected from the detached bungalows, end terraced houses, detached houses, flats, maisonettes, mid terraced houses, semi detached bungalows, semi detached houses among others. The number of pumps which are needed and the values of the pumps against all of the types of the buildings are also mentioned accordingly (Bayer et al., 2012).

The micro market segmentation related to the study reveals that South West parts of England, the London and South East parts of UK and also the Yorkshire and Humber Regions have a high level of awareness. In the Yorkshire and Humber regions are dominated by the public sector. There is significant amount of exposure as well in the eastern parts of England. In case of the north west and north eastern parts of England there is the dominance of the public sector system (Erbay & Hepbasli, 2014).

  • Most efficient among all the three different types of heat pumps
  • Good amount of energy efficiency
  • Runs on the electrical grid and does not require other supply of resources
  • Uses environmental energy and does not use other energy types
  • Does not produce carbon emission
  • Water supply temperatures are relatively attainable for heating and cooling
  • High costs of installation
  • Taking up facility ground space
  • Does not work in the sections of building with the existing radiators
  • Requires supplement to bring DHW to sixty degrees Celsius
  • Competitive with other renewable energy sources
  • Slow pace of the legislations supporting renewable energy (Ally et al., 2015)
  • There is spare ground on the site to be used
  • It can be utilized with air conditioning system
  • Government investments in the renewable energy projects
  • The current hike in the prices of energy  (Luo et al., 2015)
  • The fear of reduction of the LCBP grant by the government due to austerity measure
  • Competition with the rival suppliers
  • More developed technologies available

The political, economic, social and technological factors are clearly explained with regard to the ground source heat pumps.

  • The stability with concern to the government
  • Rule of the majority
  • Taxation policy
  • Regulation and deregulation trends
  • The corruption levels prevalent in the society
  • The ease with which business can be performed
  • The ease with which a business can be initiated
  • The rapid growth of the population leading to the needs of the pumps
  • Diversity of ethnicity and gender
  • Education and health
  • Welfare of the society
  • Economic diversity
  • The disparity in digital space
  • Business cycle categories
  • Costs of labour
  • Variations in the economic environment
  • emerging technologies and their effects
  • technological transfer
  • Technological dissemination
  • Technological interruption

In this connection it can be said that all the factors need to be kept in mind including the energy saving for the commitment to cut the emission of carbon. The sustainability of the environment need to be maintained. The affordable heat for the long life has to be looked into and the technological suitability also needs to be understood. Appropriateness for lower environment is impactful with regard to the projects (Chong et al., 2013).

The market for the GSHP’s is only well established in the European Countries. Other countries like UK, Ireland, Finland, Switzerland among others explain a great amount of potential but are unable to gain a self-sustaining market. Ground source heat pumps are responsible for presenting a technology which has proven to be extremely effectual in the green house gas emission reduction. The following barriers need to be overcome in order to reach a self sustaining market (Banks, 2012).

The inadequate amount of awareness among the decision makers and the public, the authorities and the political bigwigs who deal with the matters relating to energy is due to the absence of professionalism at all situations. It is to be understood that renewable energy sources like that of wind, solar, biomass and photo voltaic are suitable change options due to the effective information campaigns and support of the authorities. Therefore there is the need for long term strategic communication.

GSHP efficiency and environmental benefits

The high original costs in several cases are an obstruction to the system despite the overall lifecycle cost being satisfactory. The people in charge of the promotion and marketing of the “ground source heat pump” systems might be encountering an educational or pedagogical challenge. In addition to the marketing concerns the comfort and environmental advantages of the heat pumps need to be given proper importance. The cost barriers might be hard to overcome without any sort of economic support or sharing of cist between the manufacturers and suppliers.

It often happens that the poor perceptions have a detrimental effect on the market of the heat pumps. This is the effect of a market which is fast growing and has vendors or installers who do not have sufficient amount of experience. The reasonable amount of efficiency needs to be reached at. In case a suitable amount of efficiency and quality standard are not maintained it can lead to a bad reputation and a setback in the sales. This needs to be avoided and the initiatives to increase the future utilization of heat pumps need to be supported.

The prices of energy do not always show the outer  costs of the several energies and are a noteworthy barrier in certain countries of European origin. It often happens that even if a ground source pump is economically viable and a financially competitive option, the cost difference in the energies might become too small to understand the suitability of the system heat pump. The barrier is becoming of lesser importance as the general public has realised the future is bound to lead to the increased energy prices.


The ground source heat pumps work best when utilized in a properly designed installation in order to manage the heating and cooling requirements of a building over all the seasons. A GSHP can perform this by the transfer of heat to or from the ground on where it stands in order to achieve a properly moderated temperature in the buildings all the year round. The heat pumps can even be cost effective with certain considerations. The GSHPs are most likely to be successful. All the suitable conditions for the proper working of the heat pumps need to be understood such that the implementation can be proper and correct. The cost effectiveness and the economic and political factors should also be kept in mind.  The financial analysis and the economic breakdowns of the heat pumps are mentioned clearly. This helps in clearly understanding the implications of the proper use of the heat pumps as and when required.

Market potential of GSHPs


Ally, M. R., Munk, J. D., Baxter, V. D., & Gehl, A. C. (2015). Exergy analysis of a two-stage ground source heat pump with a vertical bore for residential space conditioning under simulated occupancy. Applied Energy, 155, 502-514.

Banks, D. (2012). An introduction to thermogeology: ground source heating and cooling. John Wiley & Sons.

Bayer, P., Saner, D., Bolay, S., Rybach, L., & Blum, P. (2012). Greenhouse gas emission savings of ground source heat pump systems in Europe: a review. Renewable and Sustainable Energy Reviews, 16(2), 1256-1267.

Chong, C. S. A., Gan, G., Verhoef, A., Garcia, R. G., & Vidale, P. L. (2013). Simulation of thermal performance of horizontal slinky-loop heat exchangers for ground source heat pumps. Applied energy, 104, 603-610.

Erbay, Z., & Hepbasli, A. (2014). Application of conventional and advanced exergy analyses to evaluate the performance of a ground-source heat pump (GSHP) dryer used in food drying. Energy Conversion and Management, 78, 499-507.

Lundström, L., & Wallin, F. (2016). Heat demand profiles of energy conservation measures in buildings and their impact on a district heating system. Applied Energy, 161, 290-299.

Luo, J., Rohn, J., Bayer, M., Priess, A., Wilkmann, L., & Xiang, W. (2015). Heating and cooling performance analysis of a ground source heat pump system in Southern Germany. Geothermics, 53, 57-66.

Montagud, C., Corberán, J. M., & Ruiz-Calvo, F. (2013). Experimental and modeling analysis of a ground source heat pump system. Applied energy, 109, 328-336.

Sarbu, I., & Sebarchievici, C. (2014). General review of ground-source heat pump systems for heating and cooling of buildings. Energy and buildings, 70, 441-454.

Self, S. J., Reddy, B. V., & Rosen, M. A. (2013). Geothermal heat pump systems: Status review and comparison with other heating options. Applied Energy, 101, 341-348.

Sivasakthivel, T., Murugesan, K., & Thomas, H. R. (2014). Optimization of operating parameters of ground source heat pump system for space heating and cooling by Taguchi method and utility concept. Applied Energy, 116, 76-85.

Snape, J. R., Boait, P. J., & Rylatt, R. M. (2015). Will domestic consumers take up the renewable heat incentive? An analysis of the barriers to heat pump adoption using agent-based modelling. Energy Policy, 85, 32-38.

Wang, E., Fung, A. S., Qi, C., & Leong, W. H. (2012). Performance prediction of a hybrid solar ground-source heat pump system. Energy and Buildings, 47, 600-611.

Wu, W., Wang, B., You, T., Shi, W., & Li, X. (2013). A potential solution for thermal imbalance of ground source heat pump systems in cold regions: ground source absorption heat pump. Renewable Energy, 59, 39-48.

Yang, W., Sun, L., & Chen, Y. (2015). Experimental investigations of the performance of a solar-ground source heat pump system operated in heating modes. Energy and Buildings, 89, 97-111.

Zarrella, A., Emmi, G., & De Carli, M. (2015). Analysis of operating modes of a ground source heat pump with short helical heat exchangers. Energy Conversion and Management, 97, 351-361.

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