Read A2EP's new annual snapshot of industrial and commercial heat pump installations in Australia
15 October 2026
More than 230 major Australian industrial sites and commercial buildings will have switched from gas to large-scale heat pumps by the end of 2027, according to a new report documenting this ‘hidden energy transition’ for the first time.
The report, published by the Australian Alliance for Energy Productivity (A2EP), calculates that the number of major heat pump installations in existing buildings has doubled since 2022, and the pace is poised to accelerate.
“There’s a hidden energy transition happening in Australia – without fanfare but with very real benefits for energy efficiency and security and lowering production costs,” says Jarrod Leak, CEO of A2EP.
For many manufacturers, food processors and commercial buildings, industrial and commercial heat pumps are a major viable near-term opportunity to cut emissions and reduce heating costs. Heat pumps are typically three to five times more efficient than the gas boilers they are replacing, leading early adopters to recognise that energy efficiency is business efficiency. Industrial and commercial heat pumps can offer 40 to 60 percent energy operating cost reductions over time.
Examples of businesses that have already made the switch include leading healthcare company Blackmores Group, commercial laundry Alsco Uniforms, red meat processor Hardwick Meats (owned by Kilcoy Global Foods) and iconic Melbourne office building 101 Collins. More businesses that have made the transition, including video case studies, are available at A2EP’s FutureHeat website.
“We’ve tracked heat pump installations in every state and territory across a range of industry sectors,” says Mr Leak. “This is a big shift that’s largely gone unreported because it’s happening behind factory doors or in the mechanical rooms of major buildings – places the public usually doesn’t see.”
“Our study finds that pharmaceutical, food and beverage, commercial laundries, aquatic centres and universities are leading the race to renewable heat. The next sectors that could benefit from making the switch to heat pumps are brewing and malting, hospitals and aged care.”
The report singles out the federal Community Energy Upgrades Fund (CEUF) as an example of good government policy that is enabling heat pump upgrades at more than 40 community aquatic centres. A similar scheme for the aged care sector could result in up to $20 million in gas bill savings for participating facilities.
As part of the renewable energy and decarbonisation discussion in Australia, an ambitious rollout of heat pump technology could reduce cumulative emissions by 391 million tonnes in industrial processes, and 96 million tonnes in commercial buildings, between 2020 and 2050.
“The transition to industrial and commercial heat pumps has started, but it can be turbo charged with smart government policy. This is a huge untapped, near-term opportunity to reduce emissions which Australia’s industrial and commercial sectors can’t afford to miss,” says Mr Leak.
