Iran war boosts global demand for EVs, solar and heat pumps

Yesterday 16:20

By: Dakir Madiha

Iran war boosts global demand for EVs, solar and heat pumps

The war in Iran has upended energy markets and exposed vulnerabilities in fossil fuel supply chains. Consumers and governments now show sharp interest in clean energy technologies, from electric vehicles and rooftop solar panels to heat pumps and induction stoves.

Fighting has nearly halted oil exports through the Strait of Hormuz, the narrow waterway that carries one-fifth of global oil and liquefied natural gas. Crude prices have surpassed $100 per barrel, straining import-dependent economies in Asia, Europe and Africa. Unlike past oil shocks, renewables now cost less than fossil fuels in most markets. Over 90 percent of new renewable projects worldwide in 2024 undercut fossil alternatives, per the International Renewable Energy Agency.

Household buying patterns shift amid price spikes. Germany's E.ON reports doubled demand for home solar installations. Berlin-based Enpal sees 30 percent more interest in solar panels and heat pumps. UK firm Octopus Energy logged 50 percent higher residential solar sales, 30 percent more heat pump purchases and 20 percent growth in home EV charger orders. US used-EV dealers note surging inquiries. Chinese maker BYD set sales records in Southeast Asia. India faces a rush on induction stoves due to liquefied petroleum gas delays.

International Energy Agency head Fatih Birol said at a Sydney news conference that energy security, not climate change, will drive the shift.

Early clean energy adopters gain protection. Consumer-led solar growth in Pakistan has avoided $12 billion in fossil fuel imports since 2020 and could save $6.3 billion more by late 2026, per Renewables First and the Centre for Research on Energy and Clean Air. Solar panel imports there jumped from under 1 gigawatt in 2018 to over 51 gigawatts early 2026, cutting oil and gas imports 40 percent from 2022 to 2024. Ethiopia banned gasoline and diesel vehicle imports in 2024 to push electric vehicles and leans on domestic renewables to shield development from oil shocks.

China, top global crude importer, gains partial shelter. One in 10 Chinese cars now runs electric. Without its renewable shift, the country would face far greater supply and price vulnerabilities, says Lauri Myllyvirta of the Centre for Research on Energy and Clean Air.

Wealthy nations moved slower. After Russia's 2022 Ukraine invasion, many European governments sought new fossil suppliers over clean energy acceleration. Germany rushed LNG terminals to replace Russian gas, while broader energy transition efforts stalled, per King's College London researcher Pauline Heinrichs. Europe's post-Ukraine fossil spending equaled 40 percent of needed clean power system investments, a 2023 study found.

Heinrichs said Europe drew the wrong lesson. Japan focused past shocks on diversifying fossil imports, not domestic renewables.

The UK now mandates solar panels and heat pumps in all new England homes from 2028. Slovenia started fuel rationing. Renewables and electrification gain traction as energy security tools beyond climate policy, though fossil fuels still supply 80 percent of world energy use.