Rising heating costs in 2025 impact homes with gas boilers most – analysis

Average heating costs in Germany are set to rise in 2025 due to higher energy prices and a cold winter at the start of the year, said non-profit consultancy co2online in an analysis of household heating and buildings data as well as research calculations.

While falling energy prices had led to lower costs in 2024, households are now faced with higher bills for homes heated by gas (+15%), heating oil (+3%), district heating (+2%) heat pumps (+5%), and wood pellets (+20%).

co2online warned that heating with the fossil fuels oil and gas would become significantly more expensive over the next two decades, as carbon prices rise. An unrenovated single-family home with gas heating would incur heating costs of around 120,000 euros over a period of 20 years. Energy-efficient modernisation and switching to a heat pump could reduce the costs to around 16,000 euros over the same period, the consultancy said.

While many households would already profit from low-threshold improvements, such as insulating pipes, the biggest savings could only be reached through comprehensive investments. These include the switch to a renewables-based heating system, replacing windows or insulating the outer building walls.

The building sector was responsible for about 15 percent of Germany’s total greenhouse gas emissions in 2024, with fossil fuel heating being the main source. More than half of existing homes in the country are heated with gas, almost 20 percent with heating oil and 15 percent from different energy sources in district heating. Less than 5 percent had a renewables-based system in 2024, for example a heat pump.

Germany is pressured to decarbonise its heating system. An amended Building Energy Act (GEG), often referred to as the 'heating law', was introduced in 2024 by the previous government to ramp up climate action in the sector and support the gradual replacement of fossil heating with low-carbon technologies, including heat pumps. The coalition government of chancellor Friedrich Merz agreed to abolish the law, arguing it is too strict and has a narrow technology focus. However, energy minster Katherina Reiche has yet to announce details on plans to replace the previous government’s approach.