German utilities call for abolishing heat pump subsidies in district heating areas

Germany’s municipal utilities are calling for an end to heat pump subsidies for homes that could be connected to district heating in the future. “Double subsidies for heating networks and heat pumps are not a good idea,” Ingbert Liebing, head of utility association VKU, told newspaper Welt am Sonntag. “Where the [district heating] expansion area has been determined, subsidies for heat pumps should therefore be discontinued.” 

By the end of June this year, cities with more than 100,000 inhabitants must submit a final plan for new district heating networks. Germany's coalition government is also locked in negotiations over a law detailing future rules for replacing oil and gas boilers, having announced in December it would present a new framework at the end of January.

Many cities and utilities in Germany are currently investing billions of euros in expanding district heating. But they fear that many homeowners will purchase a heat pump before pipelines are completed, potentially leaving them stuck with investment costs in case too few customers opt for the expanded heating networks, according to the article.

The German city association also warned of high costs and insufficient revenues. “If cities designate areas for the construction or expansion of heating networks, there is no obligation for owners to use the heating infrastructure,” association head Christian Schuchardt told the newspaper.

"This creates uncertainty for utilities, which are facing long-term investments running into the billions. It cannot be the case that cities and utilities make advance investments and then, in the end, citizens switch to their own heat pumps."

Households in Germany can currently receive up to 70 percent of the cost of switching to a climate-friendly heating alternative, for example heat pumps or a district heating connection.