Heat pumps, a type of reverse-refrigerator used for warming homes, are not the type of tech that gets most investors hot and bothered. They were, after all, invented in 1856. Harald Mix and Carl-Erik Lagercrantz, two Swedish financiers, see things differently.

The pair, whose investment group Vargas is behind Northvolt, a battery maker, and h2 Green Steel, which uses green hydrogen to produce steel, sense there are big bucks in replacing Europe’s many oil and gas boilers with heat pumps. Earlier this year Aira, a company founded by Vargas, launched a new product that it hopes will entice more people to make the switch. It is not only profits that are at stake.

Gas-guzzling cars and polluting power plants snatch most of the attention in the fight against climate change. The greenhouse-gas emissions produced by heating buildings often go overlooked. Residential heating is responsible for 10% of Europe’s emissions, almost as much as the 12% from petrol-fuelled cars.

European governments are therefore doling out subsidies for heat pumps, which emit a fraction of what boilers do, especially when they run on clean energy. In Britain the average cost to buy and fit one of these devices is a little over £12,000 ($15,000), about four times the cost for a gas boiler. To ease that burden the British government, which has set itself the target of installing 600,000 heat pumps every year, offers to pay households £7,500 to get one. The German government, which is shooting for 500,000 installations a year, offers to cover up to 70% of the cost.

That has already helped grow heat pumps into a sizeable business. Last year close to 3m new ones were installed in Europe, quadruple the amount a decade before, according to the European Heat Pump Association (ehpa), an industry group. There are now 20m of the devices installed in Europe.

The industry still has plenty of room to expand. Martin Lewerth, Aira’s chief executive, notes that there are 130m boilers in Europe, and that every year between 7m and 9m of them break down. Although in chilly Sweden there are 438 heat pumps per 1,000 households, in France, Germany and Britain there are only 157, 50 and 13, respectively (see chart).

Aira hopes to become the leading player in a fragmented industry. Its new factory in Poland can produce 500,000 heat pumps a year, and it is in the process of training up 20,000 technicians across the continent. The company hopes to install 5m heat pumps over the next decade—the equivalent, says Mr Lewerth, of taking 10m petrol cars off the roads.

That will not be easy. Many would-be buyers balk at the hefty cost of heat pumps, notes Mr Mix of Vargas. Although the ehpa reckons sales in Europe rose by a record 38% in 2022, that was mainly because the war in Ukraine, and the resulting spike in gas prices, encouraged many households to make the switch. Sales last year shrank by about 5%, partly owing to the strain on consumers from inflation and higher interest rates.

Worries about costs have also helped fuel a backlash against the technology. In Germany a plan to require households installing a new boiler to switch to heat pumps was watered down after Alternative for Germany (afd), a far-right party, mobilised a campaign against it. (Some tabloids railed that the Heizhammer, or heating hammer, was set to impoverish households.) The eu has also delayed a plan to accelerate uptake of the technology until after elections for the European Parliament in June. Many European heat-pump makers have shed jobs.

Mr Lewerth and his financial backers have come up with some ideas to buck the trend. Aira is pitching a subscription model in which customers pay nothing upfront and are instead charged a monthly fee that covers both installation and servicing, helping to ease worries about cost. It is offering a 15-year guarantee, too, far longer than for most boilers.

The company is also counting on clever software. Aira’s heat pumps are controlled by an app that, among other things, adjusts its activity based on the weather forecast, and learns when in the day a customer showers and how quickly their home heats up. If all this convinces enough Europeans to make the switch, posterity can thank Swedish ingenuity.