Cheap gas and policy changes hit heat pump sales
15th April 2024
BELGIUM: Cheap gas and policy changes are cited as two key reasons behind the dramatic fall in heat pump sales in Europe last year.
The 5% drop from the 2.77 million units sold in 2022 to 2.64 million in 2023, which reversed a decade of growth, is investigated in a new report by the European Heat Pump Association (EHPA).
While each national situation is unique, there are shared themes behind the decrease in sales, according to the EHPA report which looks at 16 European markets. The countries included are Austria, Belgium, Denmark, Finland, France, Germany, Italy, Norway, Poland, Portugal, Slovakia, Spain, Sweden, Switzerland and the UK.
Policy change is identified as the number one factor with variations depending on the country. The report cites examples of Austria where an announced higher subsidy scheme may have caused consumers to delay a heat pump purchase, while the removal of government support in Italy dented consumer interest. In the Netherlands, the lack of a government as coalition talks continue has generated caution, the report says.
Energy prices, especially the drop in the gas price with electricity prices often heavily taxed, was seen as another significant impact. In Poland, for example, electricity prices are four times the price of gas. In addition, there is no clarity on future electricity prices, while gas prices have been frozen by the government. Slovakia, where electricity prices are three times that of gas, is said to be in a smilier situation.
“It’s not rocket science: if you mess with the policy, it’ll mess with the market,” commented Jozefien Vanbecelaere, head of EU affairs at EHPA. “Uncertain or changing rules mean investors and consumers get nervous. Supportive and stable EU and national policies are crucial. So is making heat pumps the affordable choice by shifting the tax burden away from electricity, and rewarding heat pump owners for adding flexibility to the energy system by giving them beneficial tariffs, for example.”
In Finland and France, a slowdown in new housing projects caused by high interest rates is seen as being partly to blame for the drop in sales. In Spain, the renovation rate has slowed, meaning gas boilers do not get replaced by heat pumps, the report finds, while in Portugal, inflation is hitting consumers hard and slowing spending.
“Addressing these challenges can not only revitalise the heat pump market, but also contribute to greater energy independence, decarbonisation of heating and cooling and sustainable growth in Europe’s heating and cooling sector,” the report’s authors maintain.
A copy of the report – Pump it down: why heat pump sales dropped in 2023 – can be read and downloaded here.
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