The European heat pump market has experienced significant fluctuations in recent years, with notable variations across countries such as Finland, Sweden, Germany, France, and the United Kingdom. Understanding these trends is crucial for heat pump installers and energy retailers aiming to navigate and capitalize on this evolving landscape.
Cold Nordic countries, where electricity is affordable and carbon taxes are high, adopted heat pumps long ago as a key heating solution. In contrast, in countries like Germany and the UK, negative media coverage has made heat pumps a divisive topic. This difference is reflected in installation rates: Norway leads with 635 heat pumps per 1,000 households, while Germany has only 47, and the UK trails behind with just 15 . Industry data also shows that heat pump sales in Germany and the UK fell significantly behind those of their neighboring countries last year.
Finland In 2024, Finland saw the sale of over 100,000 heat pumps, generating more than €600 million in revenue. This represents a 13.7% decrease compared to the previous year. The breakdown includes 85,000 air-source heat pumps, 7,000 air-to-water and ground-source heat pumps each, and 1,900 exhaust air heat pumps. The decline is attributed to a slowdown in construction, higher interest rates, and economic challenges affecting household investments. However, there is strong growth in large heat pump installations for apartment buildings and service facilities, replacing district heating systems.
Cumulative heat pump sales is over 9 billion euros. Figure: Sulpu Additionally, heat pump solutions are rapidly becoming more common in district and regional heating production. The future outlook for the heat pump industry in Finland remains excellent, driven by rising energy prices and a desire for independent heating solutions. The market for replacing old units with new, more efficient pumps has also begun robustly.
Sweden Sweden continues to lead in heat pump adoption, with a significant number of installations contributing to the country's heating solutions. The market remains robust, supported by favorable government policies and a strong commitment to sustainable energy solutions. The adoption of heat pumps in Sweden is among the highest in Europe, reflecting the country's dedication to energy efficiency and environmental responsibility.
Germany Germany presents an interesting case, as heat pump sales have experienced a significant decline. In the first half of 2024, sales dropped by 54% compared to the same period in 2023. This downturn is attributed to reduced subsidies and a decrease in gas prices, which have lessened the incentive for consumers to switch from traditional gas boilers to heat pumps. Despite this setback, the German government remains committed to its climate goals, aiming to increase the adoption of heat pumps in the coming years.
France France has demonstrated a strong commitment to heat pump adoption, with significant sales contributing to the country's energy transition efforts. However, recent headlines suggest that the French market is also losing steam . The market has shown resilience, supported by government incentives and a growing awareness of the benefits of heat pumps. France's dedication to sustainable heating solutions positions it as a key player in the European heat pump market.
United Kingdom The United Kingdom has set ambitious targets for heat pump installations, aiming for 600,000 units per year by 2028. In 2022, 55,000 heat pumps were sold, indicating a need for substantial growth to meet future goals. The government is implementing policies and incentives to encourage adoption, recognizing the role of heat pumps in achieving climate objectives. The market is poised for expansion, with opportunities for installers and energy retailers to engage in this growing sector.
Market Outlook Despite recent fluctuations , the European heat pump market is poised for significant growth. The European Union's FIT55 and RePowerEU packages aim to have 50–60 million heat pumps installed by 2030. The International Energy Agency (IEA) estimates that 1.8 billion heat pumps will be needed globally by 2050 to meet climate targets. This presents substantial opportunities for heat pump installers and energy retailers to contribute to and benefit from the expanding market.
While we are waiting for the most recent market reports for 2024, initial data shows that trends from 2022 to 2023 arecontinuing.
Figure by EHPA. Our company is proud to be part of the Heat Pump Accelerator platform , focusing on achieving clean heating targets. We are committed to supporting our clients in navigating this dynamic market, providing expertise and solutions to meet the growing demand for sustainable heating.
Every setback is an opportunity to find new ways for growth. Kapacity.io is working on making heat pump energy consumption more affordable. With Kapacity.io, heat pump owners are saving in energy consumption and electricity cost, and are able to participate in various energy markets. Collaborating with installers, DSOs and energy retailers, heat pump, we're confident in finding scalable solutions.
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