Russia’s invasion of the Ukraine and the resulting fossil energy crisis has highlighted the urgent need for many European countries to reduce their dependence on Russian gas specifically, and fossil fuel imports more generally. Simultaneously, the looming climate crisis demands a rapid acceleration in transitioning towards climate-neutral buildings. The need for action is immense, as the climate progess of the buildings sector is not sufficient in order to reach the climate goals.
Lastly, high oil and gas prices are placing a heavy financial burden on many households and are likely to continue to do so for the foreseeable future.
A rapid roll-out of heat pumps is an effective response to all of these challenges: replacing existing fossil fuel-based boilers has an immediate, persistent, and significant mitigation effect. As heat pumps are largely powered by electricity, which is increasingly generated from local and renewable sources, they make a considerable contribution to energy security and independence. Finally, heat pumps can help to keep heating people’s homes affordable, especially if policies target high investment costs and the electricity-to-gas price ratio.
This project assessed the techno-economic viability of heat pumps. The report (which was published in German language in autumn of 2022) clearly shows that heat pumps can operate efficiently in more than half of the German buildings stock, while a further 20-30 percent can be made fit with small investments in building insulation. It also demonstrates that the monthly operating costs of heat pumps are lower than those of gas boilers, making heat pumps a sensible investment for homeowners.
The scale-up of heat pumps in other European countries has also yielded positive results: Sweden, for example, has achieved a remarkable 90 percent market share for heat pumps, ensuring reliable heating even in severe winter conditions. The Netherlands, traditionally reliant on natural gas, has increased its heat pump installations almost tenfold since 2014. Meanwhile, Poland is Europe’s fastest-growing heat pump market, with sales volumes more than doubling between 2021 and 2022.
These examples show that a large-scale roll-out of heat pumps is not only feasible, but also a necessary step for achieving climate neutrality in Germany and beyond. Scientific evidence unequivocally points to heat pumps as the key heating technology of choice. It is now imperative for policymakers and market actors to work together and create the right conditions for widespread adoption. This study examines the existing market conditions in Germany and provides strategic recommendations for effectively scaling up their deployment.