Heat pump sales to increase 10% this year, but growth falls short of potential – industry

German heat pump sales are set to increase by about ten percent this year to reach 330,000 units, and growth rates will remain similar over the coming years, the German Heat Pump Association (BWP) has projected. 

The association has seen considerable interest in heat pumps among homeowners, but said it expected demand to fall short of the actual potential, as debate surrounding Germany's plans for the future of clean heating generate significant uncertainty. "The heating market as a whole remains characterised by a wait-and-see attitude," the BWP wrote in a report.

After months of negotiations, the coalition government presented key points to its Building Modernization Act in February. The proposals would do away with some of the more ambitious parts of the previous government’s controversial law to phase out fossil fuel heating, which drew criticism from climate advocates. The new draft law, for example, eliminates the previous mandatory quota of 65 percent renewable energy in newly installed heating systems, and allows the continued installation of new gas and oil heating systems, while still providing subsidies for heat pumps. 

“More and more consumers associate gas and oil heating with high financial risks,” said BWP board member Norbert Ruths. “The war in the Middle East makes it clear how urgently Germany needs to reduce its dependence on fossil fuel imports. For many, the heat pump is the first answer to this.”

The continued provision of subsidies for heating systems until at least 2029 – as promised by the government – is therefore all the more important, BWP managing director Martin Sabel said. “Every euro of subsidy triggers four times that amount in investments in building modernisation,” he added. “The government could not invest better in energy independence, economic growth, and climate protection.”

The BWP’s position is supported by a recent survey commissioned by heat pump manufacturer Stiebel Eltron, which found that 82 percent of consumers would like to see Germany less dependent on natural gas imports.

Experts have long pointed at heat pumps as the most climate-friendly way to warm homes. The BWP said public debates have a mixed effect on heat pump sales: on the one hand leading to a rush in investments as homeowners fear potential subsidy cuts, while on the other hand eroding confidence through policy unclarity for the medium and long term.