Korea targets 3.5M heat pumps by 2035, industry faces cost hurdles
The Korean government is expanding support to achieve a target of 3.5 million heat pump units by 2035, with major corporations like Samsung Electronics and LG Electronics actively entering the domestic market.
Our take
What are the key challenges and government strategies for heat pump adoption in Korea?
The Korean government's aggressive heat pump adoption target of 3.5 million units by 2035 faces a critical challenge in overcoming the significantly higher upfront costs and, under current residential tariffs, higher operating expenses compared to established gas boilers, despite heat pumps' superior energy efficiency.
The government's strategy of subsidies and tariff reforms aims to mitigate the **initial cost barrier** and make heat pumps more competitive on operating expenses. However, the deep penetration of city gas networks and the relative affordability of gas boilers mean that the long-term success of heat pump adoption hinges on achieving a clear and sustained economic advantage in total cost of ownership, which current electricity tariffs (especially residential progressive rates) do not always provide. This tension between high efficiency and economic viability for consumers is the core challenge.
What the source says
- The Korean government aims to expand heat pump support to single-family homes not supplied with city gas, then to social welfare, agricultural, and public facilities.
- Support for heat pump adoption will expand to multi-family housing starting in 2027.
- The Ministry of Climate, Energy and Environment plans to implement a demonstration project for 'gas-pipe-free apartments' in new multi-family housing, using heat pumps for heating and hot water.
- International Energy Agency The IEA identifies Korea as a leading nation in high-efficiency heat pump systems and compressors.
- Samsung Electronics Samsung Electronics established an EHS heat pump boiler production line in Gwangju with an annual capacity exceeding 100,000 units, supplying them entirely to the domestic market.
- LG Electronics LG Electronics launched an integrated heat pump system boiler in Korea in May 2026, applying its air-to-water heat pump technology developed in Europe.
- High initial installation costs and electricity prices relative to gas prices are key barriers to heat pump adoption in Korea.
- The Korean government is lowering cost burdens by providing subsidies and reforming electricity tariffs, allowing heat pump electricity to be separated from residential progressive tariffs and charged at general rates or through time-of-use (TOU) tariffs.
- Im Hyun-ji Im Hyun-ji of the Green Energy Strategy Institute states that after initial subsidies, the relative price structure of electricity and gas is crucial, as a clear difference in operating costs is needed to incentivize gas heating households to switch to heat pumps.
- Im Hyun-ji Im Hyun-ji also emphasizes that as installations increase nationwide from 2027, the availability of skilled installation and maintenance personnel, especially in remote areas, will affect initial consumer acceptance.
- A shortage of skilled HVAC installers and plumbers is a bottleneck for heat pump adoption in Europe and globally, impacting performance and consumer experience.
- LG Electronics LG Electronics supplied and began operating an industrial heat pump with an outlet temperature of 108°C and a maximum capacity of 1040 RT to a domestic paper mill in July 2026.
For investors — For investors and operators, the Korean heat pump market presents a significant growth opportunity driven by government policy and corporate investment, but success will hinge on the government's ability to make heat pumps economically attractive to consumers through sustained tariff reforms and subsidies, alongside developing a robust installation and maintenance infrastructure.
Watch: Further announcements on electricity tariff reforms for heat pumps, detailed subsidy programs, and progress reports on the 'gas-pipe-free apartment' demonstration projects.
Weekly digest
What changed in Korea's power market this week — one email, every week.
Email only, used solely to send this digest (delivered via Resend). Unconfirmed sign-ups are deleted after 30 days. Free.