22 Jan 2024, 15:09
Franca Quecke

Heat pump sales reach record in 2023, but controversial law causes uncertainty

Clean Energy Wire / Welt am Sonntag

Heat pump sales in Germany reached a record of almost 400,000 units last year, but the positive development is at risk in 2024, the German Heat Pump Association (BWP) has said. While sales of heat pumps jumped in the first half of 2023 as a reaction to rising gas prices following Russia's invasion of Ukraine, the intensive public debate about the controversial heating law and linked uncertainty about subsidies dampened sales in the following months. 2022 had set the previous record with 236,000 units sold. BWP said that the industry stood ready to make sure Germany could reach the government's target to install 500,000 units annually and reach a total of 6 million by 2030. However, the association warned that the growth could level off, unless the government made sure that electricity becomes cheaper relative to gas, by reducing taxes and levies. "If the framework conditions do not improve and politicians do not actively intervene, we expect sales to remain the same or even decline in 2024," BWP managing director Martin Sabel said.

Welt am Sonntag reported that the uncertainties surrounding funding for heat pumps also caused fluctuations in applications for heat pump subsidies. Changing conditions from January 2024 was likely a key reason for a jump in applications in December, after several months of little interest. "We assume that those consumers who were better off under the old funding regime took the last opportunity to submit their application in December," BWP's Sabel told the newspaper.

As fossil fuel-powered heating systems are still the norm in homes across Germany, heat pumps are regarded as a key technology for decarbonising the country’s heating sector. The government has said it aims to install up to 500,000 new units per year from 2024 onwards. After months of divisive conflicts between the coalition parties, Germany passed a law to gradually phase out fossil fuel heating boilers in early September. As part of the agreement, building owners can apply for up to 70 percent of the costs of a climate-friendly boiler to be reimbursed. While the number of heat pump installations is increasing across Europe, Germany’s heating industry faces tough competition from North American and Asian heat pump manufacturers.

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