European heat pump sales down 5% in 2023
27th February 2024
EUROPE: After a decade of increases, heat pump sales in Europe fell by around 5% in 2023 – and market analysts are expecting this downward trend to continue this year.
The downturn is described by the European Heat Pump Association (EHPA) as “remarkable” after a huge 37.6% increase in 2022.
The latest EHPA figures released today are based on information provided by 14 European countries, representing around 90% of the total European heat pump market.
France, Italy, Sweden, Finland, Poland, Denmark, Austria and Switzerland all saw heat pump sales drop last year. While they increased in Portugal, Belgium, Norway, the Netherlands, Spain and Germany, this was not enough to offset the overall decrease.
Latest figures from the UK, not yet included in the overall calculations, show national sales growth of 4% last year.
The 14 European countries recorded total sales of 2,639,530 in 2023, a 5% drop on the 2,765,040 units sold in 2022.
Even in many countries that saw overall growth, quarterly sales declined towards the end of 2023. Overall, European heat pump sales declined each quarter in 2023, and reports from national associations and manufacturers indicate that there’s no immediate outlook for a change this year.
The downturn has been blamed on a number of factors, including a drop in gas prices, high electricity prices, high interest rates, inflation, political uncertainty, a backlash against green policies, reduced ambition at both EU and national levels and uncertainty around subsidy schemes in some countries.
The slowdown is already forcing manufacturers to cut jobs or reduce hours. The EHPA estimates that the changes announced so far will impact nearly 3,000 employees. Production in a number of new previously reported new factories are also reported to have been delayed due to the downturn.
The falling sales come as the EU’s Heat Pump Action Plan, due to be published in early 2024, has been delayed by the European Commission. In the meantime, high interest rates and changing national policy measures are unsettling investors and consumers, says the EHPA.
It argues that governments increased support for people investing in heat pumps in 2022 following the energy crisis triggered by the Russian invasion of Ukraine. In 2023 much of that support was restricted or removed. This was the case in Italy, for example, which saw one of the biggest drops in sales between 2022 and 2023.
The EHPA maintains that the slowdown in heat pump sales puts the EU’s climate and energy targets at risk. This includes the 2030 target of 49% renewables in heating and the 60 million heat pumps needed to meet REPowerEU.
“The heat pump sector is facing stormy weather, and needs all hands on deck. Companies have invested in training and manufacturing capacity and consumers are on board. What’s now vital is a compass in the form of the EU Heat Pump Action Plan and subsequent national plans,” said EHPA secretary general Thomas Nowak.
It repeated calls for the taxes and levies applied to energy to be addressed and to reduce the price of electricity for end users.
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