Governments and policymakers commonly highlight the essential role of heat pumps in reducing the use of gas and other fossil fuels for keeping homes warm while meeting carbon reduction targets.
Yet despite a range of subsidies and other incentives across Europe and beyond, adoption remains patchy and the installation of new units is stubbornly slow.
Market data from the European Heat Pump Association (EHPA) suggests that, after years of steady growth, sales of heat pumps fell 21 per cent in 2024 compared with the previous year to 2.2mn units (based on data from 14 countries), bringing the total stock to about 26mn.
Sales fell sharply in Germany and Belgium. The one bright spot was the UK, where sales rose 63 per cent, but from a low base.
Paul Kenny, director-general of the EHPA, is confident the pace of installations can recover, but argues more support is needed to drive adoption.
He attributes last year’s decline to three factors: changes in some government support schemes, which unsettled consumer confidence; sluggish economic conditions that constrained household spending; and the low price of subsidised gas.
But Kenny, a former adviser to the Irish government on energy strategy, also blames disinformation campaigns against heat pumps in some countries as part of the opposition to net zero policies. “There has been a backlash,” he says.
Jess Ralston, an analyst at UK-focused think-tank Energy & Climate Intelligence Unit, says confusion over government strategy and technology has played a part in delaying wider take-up, while exaggerated claims of draconian measures to enforce early abandonment of gas for home heating have not helped. “There is no policy from any government to rip out something that’s working,” she says.
Ralston argues that some stability of policy in the UK — including last month’s move to ease planning rules for new installations and a continued commitment of up to £7,500 in grants towards replacing old gas boilers with their energy-saving alternatives — should encourage further adoption. So far it has fallen well short of its ambition to install 600,000 units a year by 2028. The current rate of new gas boiler installations is about 1.7mn a year.
Strong state support for early heat pump adoption has helped the likes of Norway, Sweden and Finland achieve penetration rates approaching or in excess of half of all households. A glut of cheap electricity, particularly hydropower in Norway and Sweden, has supported early uptake of the technology.
Proponents argue the efficiency of heat pumps is reason alone for their adoption, particularly where grid power comes primarily from renewable sources. Typically, a well-installed heat pump can generate three times or more units of heat for every unit of electricity used to run the pump.
But the higher upfront costs of installing domestic heat pumps compared with replacing failed gas boilers are not rewarded with lower operating costs in many European markets. Costs of installation vary considerably, but in the UK, consumer advisory body the Energy Saving Trust suggests a typical cost is about £14,000.
Research by the EHPA suggests that in the first half of last year, the cost of electricity for UK consumers in euro terms was the equivalent of 27.2c per kilowatt hour, compared with 7.9c for gas, a factor of nearly 3.5 times, in effect swamping out any cost savings in running domestic heating. The most recent price cap for consumers has widened this gap, with electricity set at 27p per kWh from July and gas at just under 7p.
The EHPA argues that to make the running costs of heat pumps competitive, the cost of electricity should be at most twice the price of gas. Yet across most of Europe this was not the case last year.
In Germany, the differential was similarly high, with electricity costs at 39.5c per kWh, compared with gas at 12c. Europe’s largest economy is also a laggard in installation, despite its reputation as an early adopter of low-carbon technologies.
Yet more recently, opposition to plans to ban new and replacement boilers under a policy known as the “Heizhammer”, or heat hammer, forced a climbdown by the previous governing coalition before its electoral defeat in February.
Sabrina Schulz, director for Germany at the European Initiative for Energy Security, a think-tank focused on encouraging reliable and affordable power supplies, regrets how the role of heat pumps became “part of the culture war” and contributed to a “green backlash”.
However, with a new governing coalition in place, she argues that progress will be made in cutting Germany’s reliance on gas and other fossil fuels for home heating.
“The new government coalition . . . plans to reduce electricity prices by at least 5 cents per kWh. Additionally, the extension of the EU ETS (the new emissions trading system) to include the heating sector will raise the costs of running gas furnaces,” she says. “As a result, heat pumps will become the more affordable option in the future. However, the issue of upfront investment remains.”
Narrowing the price gap between electricity and gas — and helping overcome the barrier of higher upfront costs facing households when switching to heat pumps — is also essential in the UK, argues Ralston.
She concedes there are pressures on the Treasury to avoid policy changes being a burden on public finances, but says: “We need to make electricity cheaper.”
Bean Beanland, director for external affairs at the UK Heat Pump Federation and co-host of a recent podcast on the topic, says: “We have been through these big transformations before”. He points to the rollout of central heating and the switch from town gas (produced by burning coal) to natural gas in UK housing stock since the 1960s and 1970s.
The UK government needs to “sort out electricity prices” if it wants people to buy heat pumps, Beanland says.
It is not enough to rely on consumers wanting to make environmentally friendly choices. “We are not pushing heat pumps because they will save polar bears,” he says. “What people want is to be warm and comfortable, and for it to be affordable.”