Korea proposes incentives for heat pump market growth, targets 3.5M units by 2035
The Korean government plans to foster the heat pump market, targeting 3.5 million units by 2035. It has allocated 22.4 billion KRW in its 2027 budget proposal for demonstration projects in 16 apartment complexes, linking successful outcomes to future deployment incentives.
Our take
Will Korea's heat pump programme create a new flexible load for the power system?
Korea's heat pump programme is too early to count as a flexibility market, because the 2027 money is a proposed KRW 22.4bn demonstration and the incentives are still under review.
The demonstration will test grid impact, heat storage and optimal control across 16 complexes, which is where any flexible load case would come from. The budget still needs National Assembly approval.
What the source says
- The Ministry of Climate, Energy and Environment is considering introducing incentives for companies that achieve successful demonstration results, such as bonus points for future deployment or priority application of their technology in standardization processes.
- The Ministry of Climate, Energy and Environment plans to complete consortium recruitment and demonstration site selection by the first half of 2027, with design and equipment installation starting in the second half.
- The scale and implementation of the joint housing heating/cooling electrification project are contingent on the National Assembly's budget review and final approval.
- Kim Sung-hwan Minister Kim Sung-hwan emphasized the importance of heat pumps in the building decarbonization process, noting their emergence as a key industry in Europe, the US, Japan, and China.
- A government official stated that the demonstration aims to comprehensively verify the stability and economic viability of heat pumps in real residential environments, beyond simple technology application.
- Green Transition Institute The Green Transition Institute reported that the overall GHG reduction performance across 226 local governments reached 87.2% of their 2025 targets.
- Green Transition Institute The building sector accounted for 34.1% of the total GHG reduction but achieved only 66.5% of its reduction target, with low budget execution rates identified as a barrier.
- Korean government The government's K-GX (Korean Green Transformation) strategy includes heat pumps among its 10 national green industries, signaling a commitment to fostering related industries.
- The demonstration projects will support high-efficiency heat pump installation in 8 new apartment complexes and 8 old apartment complexes undergoing remodeling.
For investors — VPP operators and aggregators should follow the demonstration's control and heat storage results before planning around heat pump load.
Watch: National Assembly's final approval of the 2027 budget for joint housing heating/cooling electrification projects.
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