CORRECTION: Low electricity prices relative to gas will boost European heat pump uptake – report
Clean Energy Wire
Corrects third paragraph to specify share of heat pump sales compared to all heating sytems sold, a previous version of the article incorrectly stated this was the share of heat pumps in buildings.
A comparatively low electricity price relative to gas is an important lever to accelerate the uptake of heat pumps throughout Germany and Europe, according to a report by the state-owned bank KfW. The report found that heat pumps, which run on electricity, are used frequently under those conditions at the European level, even when country-specific conditions are taken into account. The trend is further corroborated by survey data from the KfW Energy Transition Barometer, as households cited cost-effectiveness as a key factor for the use of heat pumps.
A reliably rising CO2 price, which would make heating with gas more expensive, could help widen the electricity-gas price gap, the authors wrote. This is expected as a result of the expansion of European emissions trading system from 2027 onwards. Another option is to offer heat pump electricity tariffs that vary over time, so they run on periods when electricity is plentiful and therefore power prices lower.
Sales of heat pumps in Europe have roughly quadrupled in the past ten years. Of the 21 countries surveyed in the report, Germany came in seventeenth place with 11 heat pumps sold per 1,000 households in 2023; Norway led the way with 57 heat pumps. In total, of all new heating systems sold in 2023, 98 percent were heat pumps in Norway, compared to 27 percent in Germany, according to the report.
A report by the German Energy Agency published in January found that 65 percent of newly completed residential buildings had a heat pump as their primary heating system. However, the country’s existing buildings continue to heavily rely on fossil fuels. The heat pump industry has called for more investment security to boost sales in the sector after a 45 percent decline in sales in 2024 compared to the previous year.
