Heat pumps are yet another new obstacle on the path to the Green Deal. The goal was 10 million new installations between 2022 and 2027. Up until this year, the race for alternative heating to gas boilers was ongoing. But enough is enough. In the first six months of 2024 there was a 47% drop in purchases. A problem for Brussels, for European decarbonisation.
In the first six months of the year, 765 thousand heat pumps were sold. In the same period in 2023 there were 1.44 million. The data (released by the Financial Times) refers to thirteen European countries, including France, Italy, Sweden and Germany, which alone represent 80% of the total market. A hard blow not only for the industry, but also for the ambitious objectives of the European Green Deal, which aims to reduce emissions and reach 10 million new installations by 2027. What is happening? According to the European Heat Pump Association (EHPA), the reduction in government subsidies is affecting consumer choice, which is essential to incentivize citizens to replace traditional gas boilers with more sustainable solutions. Countries such as Italy and Germany, which alone represent a significant part of the market, have revised downwards the economic incentives for the purchase and installation of heat pumps. The second reason is the fall in gas prices, which had reached record levels at the beginning of the Russia-Ukraine war and which has now made it less urgent for many consumers to switch to more expensive heating sources. Furthermore, there are criticisms from the industry which continues to consider the times dictated by the Green Deal too stringent and there are problems with finding the workforce: there is a lack of installers. Thus the forecasts for 2024 speak of a maximum of 1.5 million units, bringing the market back to pre-pandemic levels, in stark contrast to the boom of previous years.
A collapse in sales which is a serious problem for Brussels. Heat pumps, which use electricity, are a key technology for decarbonising home heating, especially when powered by renewable energy. And now, looking at the numbers, the goal of 10 million new heat pumps by 2027 seems truly utopian.
So the EHPA urged Brussels to intervene quickly. Paul Kenny, head of the association, called for concrete measures to “reverse the market slowdown”, recalling how the European Commission had promised an action plan by the end of 2023, which however has not yet arrived. Between 2020 and 2023, investments in heat pumps had grown by 75%, reaching 23 billion euros, according to data from Bloomberg NEF. But the current slowdown puts the positive trend and Europe’s ability to rapidly decarbonise its real estate stock at risk. To stem the problem, Commission President Ursula von der Leyen included the housing sector in the Energy Commissioner’s responsibilities, signaling her willingness to address the issue with greater attention. And there is a request from many quarters for targeted incentives, to convince consumers and companies and thus help get the European Green Deal back on track.
