MARKET REPORT

Market Report: Sweden
Per Jonasson, Swedish Refrigeration & Heat Pump Association, SwedenEver since 2008 the Swedish market for the heat pumping technology has steadily increased and is estimatedto account for an annual sale of approximately 16 000 MSEK or 1500 MEUR in 2018 (1 EUR equals 10,5 SEK). The
business can be divided into three segments: Air Conditioning 4 000 MSEK, Industrial/Commercial 4 700 MSEK, Heat
Pumps 7 300 MSEK. Going from “busy”, some ten years ago passing “hands full”, the Swedish market situation sincea couple of years can be defined as overheated. Contractors, mainly within refrigeration and air conditioning areoverloaded with work, and there are no signs of any slowing down. On the contrary, the forecast for coming years
indicates continued increase in sales within all segments. The largest challenge for all companies is the difficultyin finding and recruiting competent personnel. This goes for all types of professions, from management via whitecollar to service technicians.

Introduction

The Swedish RACHP market has been growing steadily forseveral years (Figures 1-4). Market drivers differ between
on the one hand refrigeration and air conditioning (RAC),
and on the other hand heat pumps (HP). The growth in theSwedish RAC business is influenced by two main factors:
the F-gas Regulation and people’s desire and financial
capability for improved comfort and “luxury”. For the HP
industry, the influencers are cost and energy savings,
and the construction of new houses and buildings.

The RAC businessIn the past considered an unnecessary luxury, air conditioning in Sweden nowadays is more seen as a necessity. Last
summer, with the highest temperatures ever reportedfor 260 years, clearly showed the consequences of bad
air handling. Numerous incidents were reported, such as:• destroyed and wasted food for millions of SEK, only
for one single supermarket, due to insufficient andbadly maintained cooling and freezing equipment.
Something that happened all over Sweden, fromsouth to north;• hospitals (several) that had to cancel or postpone
surgery due to condensation of water on surgery
equipment;• district cooling plants not able to meet capacity
demands, ending up in sectional shut down of clients.
There are numerous examples. Therefore, the interest
in AC and planning for installations or upgrades aresteadily growing. This definitely will have a positive impact on future sales.

Annual sales, MSEK
20 000

15 000
10 0005 00002010

2011

2012

Air Conditioning

2013

2014

2015

2016

Industrial/Commercial

2017 2018* 2019*
Heat Pumps

Fig. 1: Annual sales 2010-2019 (* estimates for 2018 and 2019) for the three segments Air Conditioning, Industrial/
Commercial and Heat Pumps. Source: Industrifakta AB and Swedish Refrigeration & Heat Pump Association (SKVP)

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Annual sales: Refrigera�on & AC, MSEK
10 000
8 000
6 000
4 000
2 00002010

20112012

2013

2014

Air Condi�oning2015

2016

2017 2018* 2019*

Industrial/Commercial Refrigera�onFig. 2: Annual sales 2010-2019 (estimates for 2018 and 2019) for Air Conditioning and Industrial/Commercial Refrigeration.
Source: Industrifakta AB

Energy supply for heating of buildings
Biomass

Electricity

Oil & Gas

District heating

Heat pumps

Fig. 3: Energy supply for heating of buildings in Sweden 2012. Source: Profu, Värmemarknad Sverige

The impact of comfort need, or “luxury behavior” isalso seen within the commercial segment. A trend, notspecific for Sweden, is that people have less time to spend
on their household. Instead, individual “quality time”
is highly valued. At the same time wealth is increasing,enabling a larger group of people the opportunity toa more “luxurious” lifestyle. As a consequence, airconditioned or chilled areas and display cabinets forready meals and pre-prepared foods are growing, resulting in the demand for more cooling and freezing equipment and larger cooling capacities. Also, the business forhome deliveries is increasing, as are these companies’
cold store facilities and distribution services.

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The industrial refrigeration sector shows a more stablemarket. Growth is mostly seen in areas such as datacenters, ice rinks and distribution centers, but in a more
moderate pace.
Finally, the F-gas Regulation has, since it went into force
in 2015, had a great impact on the whole sector, and will
have for many years to come. Numerous are the plants
and systems that need to be replaced, rebuilt or converted
to new low-GWP systems and refrigerants.
As a result, the RAC business in Sweden has grownsteadily by approximately 70% between 2010 and 2018.

MARKET REPORTHeat Pump sales in Sweden 1982-2018
140 000* Air-Air HP: Sales ﬁgures es�mated

120 000
100 000
80 00060 00040 000
20 000un�l0Air-Water

Exhaust Air

Liquid-Water*Air-Air

Fig. 4: Heat Pump sales in Sweden 1982-2018. Source: SKVPThe forecast for the next few years is that this trend withan annual growth of 5-7% will continue.

The HP business

The main reason for installing a heat pump (HP) is tosave money. As a consequence, factors that influence
this market differ completely from those for the RAC
market. While the RAC technology is a “necessary evil”
in order to operate your business, HPs have to compete
on commercial conditions with gas or biomass boilers
and district heating. Some examples of key arguments
are “cost efficiency”, “simplicity” and “reliability”. Nowadays, also words like “sustainability” and “environmental friendliness” are of interest for potential customers; all “buzzwords” in favor of HPs.
A difference between the countries Sweden, Denmarkand Finland compared to many other countries is the verylarge market share of district heating (DH) for heatingof buildings. This, together with the unique position ofHPs, makes the Swedish heating market rather special,with DH as the definite market leader with 53% of themarket, followed by heat pumps with 22%.
Sweden is by far the country with highest numbers of
HP installed per capita in the world (air-air HP excluded).
With approximately 1,5 million heat pumps in operation(all types included), every second single-family house hassome kind of heat pump installed, and for new constructions exhaust air heat pumps are considered as default.
The contribution from HPs for heating of buildings isestimated to around 30 TWh annually.

After a significant reduction in 2011 and 2012 sales haveincreased every year and has now reached approximately 120 000 units per year, as shown in Figure 4. While
ground source HP have been stable in sales, particularly
exhaust air HP have had a very positive development
during the last five years. The reason for that is theincreased number of new construction of single-family
houses. Almost all developers have this type of heatingsolution as their first choice.

Price level

Every year SKVP conducts a survey among its contracting members, Pulsen (the Pulse). The full report isavailable in English at https://skvp.se/aktuellt-o-opinion/
statistik/pulsen/2018-eng
Figure 5 shows the reported total cost, VAT included, fora complete installation of various types of heat pumpsystems. Notable is the very small price increase shownfor the period 2010 to 2018.
From an international point of view, the installation
cost for, especially, ground source heat pumps has tobe considered as very low. The main reason for theselow prices is the industrialized way of performing thecontracts. Installers together with borehole drillers form
contracting teams executing only this kind of project– day after day.
Another question in the Pulsen survey for what reason
the heat pump system was installed. Of special interest
are the trends for “oil burners” and “old heat pumps”.

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MARKET REPORT

Total cost of installa�on (SEK)
160 000
140 000
120 000
100 000
80 00060 00040 000
20 0000Air-to-air

Vert liquid-water
2010

2011

Horizontalliquid-water
2012

2013

Ground water
2015

2016

Air-to-water

2017Exhaust air

2018

Fig. 5: Total cost for installation of various types of Heat Pump systems. Price based on turnkey
contract for a single-family house with a heat demand of 20 000 kWh/year. Source: SKVPType of heating device replaced by the Heat Pump
30%

25%

20%

15%

10%

5%

0%

Electricboilers

Directelectric

Oil burners Old heatpumps

Wood2010

2013

2011

2012

Pellets
2015

Districtheating2016

Fig. 6: Type of heating device replaced by the Heat Pump. Source: SKVP

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2017

New-builts
2018GasOtherMARKET REPORTEnergy use for heating and DHW [TWh per year] Source: "Energiläget i siffror 2017";
Swedish Energy Agency

504540353025-35% (1987)

2015
105-97% (1983)

02015

2013

2011

2009

2007

2005

2001
Oil2003

1999

1997

1995

1993

1991

1989

1987

1985

1983

Electricity

Fig. 7: Energy use for heating and DHW. Source: “Energiläget i siffror 2017”, Swedish Energy Agency.

Installed capacity [kW]450 000
400 000
350 000
300 000
250 000
200 000
150 000
100 000
50 000
02009

2010

2011

2012

2013

Multi family

2014

2015

2016

2017

2018

Single house

Fig. 8: Annual installed capacity in kW for multi- and single-family houses. Source: SKVPAs Figure 6 shows, the number of oil burners that are
replaced decreases rapidly; a consequence following
the fact that oil for heating more or less has disappeared in Sweden, clearly shown in Figure 7. Figure 6 also
points out the loyalty we see by those who have an HP
that needs to be changed (the “old heat pump” data inthe figure). A large share of contracts executed by ourinstallers consists of replacing an old HP with a new one.
In other words - if you have an HP that is getting old, you
do not change technical solution for heating your house– you stick to the HP.
It is also interesting to notice that despite the great number of installed HPs, use of electricity for heating and
DHW has decreased by 35% from the peak year 1987.

Expectations for the future

Heat pumps is a mature product in Sweden. Every Swede
has a heat pump or knows someone who has one. Despite
this, expectations for the future are very positive. New
constructed single-family houses are almost always builtwith heat pump as the heating source, Figure 8. And for
multi-family houses, the transition from district heating
towards heat pump systems continues. This is still in
limited numbers of units, but the positive trend is clear.
Another very interesting market is the replacement business. All HPs sold in the early 2000s will soon have to be
replaced. We can already see that the figures for replacements increase, but have not yet seen the boom.

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TOPICAL ARTICLE

Technicians
100%
80%
60%
40%
20%
0%

13:1 13:2 14:1 14:2 15:1 15:2 16:1 16:2 17:1 17:2 18:1 18:2
EasyHard

Very hard

Fig. 9: Difficulties in finding technicians to recruit from year 2013, first half year (13:1), to second half of 2018 (18:2).
Source: Industrifakta AB

Challenges

The main challenge for the whole RACHP business inSweden is lack of resources.
Twice a year a research company (Industrifakta AB) makes
a survey among the members of the Swedish branchorganisation SKVP. Among questions on business climate,trends and sales volumes, they also ask how easy or difficult it is to recruit employees within the three categories“management”, “white collar” and “technicians”.
Since many years the answers have indicated difficulties
in finding employees, Figure 9. But bad has turned worse, and in last survey 92% replied “very hard”, 8% “hard”
and 0% “easy” in finding technicians to recruit. The corresponding figures for management were 87/13/0% (veryhard/hard/easy) and white collar 85/15/0%.
The problems in finding and recruiting skilled employees
have now reached such a magnitude that it hurts thedevelopment of the industry. Several companies avoid
to quote for projects as there is no one to put on thejob, and the transformation from high-GWP refrigerants
to low within the F-gas regulation is ongoing at too lowa pace.

Conclusions

The RACHP businesses in Sweden is performing extremely well – to some extent too well. Sales figures are
steadily increasing, clearly above inflation. Estimatedannual sales in 2018 are expected to be approximately
16 000 MSEK or 1500 MEUR, divided into the three seg-26

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ments Air Conditioning (4 000 MSEK), Industrial andCommercial (4 700 MSEK), Heat Pumps 7 250 MSEK. The
forecast for the coming years is also very positive, withno signs of slowing down.
There are mainly two market drivers for the RAC business: the F-gas Regulation and people’s wish and financial capability for improved comfort and “luxury”.
The HP industry, on the other hand, is influenced by costand energy saving, and the construction of new houses
and buildings.
Expectations for the years to come are that sales will
increase. The only threat is the problem of finding skilled
personnel. This goes for all types of professions, all frommanagement via white collar to service technicians.

PER JONASSONMDSwedish Refrigeration & Heat Pump Association
Swedenper.jonasson@skvp.se
www.skvp.se
https://doi.org/10.23697/a9xf-3a75