Pump it down: why heat pump sales dropped in 2023 

15 Apr 2024

Cheap gas and expensive bank loans are two key reasons heat pump sales fell last year, according to a new investigation into 16 European markets*.  

The 5% drop from the 2.77 million units sold in 2022 to 2.64 million in 2023 reverses a decade of growth.  

While each national situation is unique, there are shared themes behind the decrease in sales, the report from the European Heat Pump Association (EHPA) finds.  

Overall, policy change is the number one factor which comes back time and again, with variations depending on the country. For example an announced future higher subsidy scheme in Austria may have caused interested consumers to delay buying a heat pump. On the other hand, the removal of government support in Italy dented consumer interest. In the Netherlands, the current lack of a government as coalition talks continue has generated caution.  

Another crucial impact was caused by energy prices, especially the drop in the gas price – with electricity prices often heavily taxed. This is the case in Poland, for example, with electricity four times the price of gas now, and no clarity on future electricity price levels, while gas prices are ‘frozen’ by the government. Slovakia, where electricity prices are three times that of gas, is living a similar experience.  

In Finland and France a slowdown in new housing projects caused by high interest rates is 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. In Portugal, inflation is hitting consumers hard and slowing spending.  

“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.”  

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 countries included are Austria, Belgium, Denmark, Finland, France, Germany, Italy, the Netherlands, Norway, Poland, Portugal, Slovakia, Spain, Sweden, Switzerland and the UK. 

Read the report

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