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 neighbouring countries last year.
2 million heat pumps were sold in 2024 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.
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 UK saw a significant rise in heat pump installations in 2024, with around 100,000 hydronic heat pump units sold, marking a 63% increase from the previous year. The government has set ambitious targets, aiming for 600,000 units annually by 2028. In 2022, only 55,000 units were sold, but with supportive government policies, innovative heat pump tariffs , and growing efforts from companies in the sector, the market has become an exciting opportunity for consumers, installers, and energy retailers alike.
Heat pumps are not just saving on heating costs but they can also increase one's home value. An example is Scottish Power and the WWF's joint research-led report , which found that having a heat pump could add between 1.7% and 3% to the value of your home — a maximum of about £8,000 for the average UK home.
What is Kapacity.io doing ot support heat pump growth? 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.
Heat pump sales target for 2030. Figure: EHPA. 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, we're confident in finding scalable solutions.
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