European Heat Pump Sales Plunge 47% Amid Economic Pressures
Heat pump sales in Europe dropped significantly in early 2024, facing challenges from lower gas prices and inconsistent government support. The industry struggles with supply chain issues and political resistance in several countries.
The European heat pump market has experienced a significant downturn, with sales plummeting by 47% in the first half of 2024 compared to the same period in 2023. This decline marks a stark contrast to the industry's previous growth trajectory, with only 765,000 units sold across 13 key European markets that represent 80% of the sector.
The European Heat Pump Association reports that total sales for 2024 are likely to fall below 1.5 million units, the lowest level since 2019. This sharp decrease comes despite the European Union's ambitious target to install at least 10 million additional heat pumps by 2027, part of a broader strategy to reduce dependence on Russian gas following the 2022 invasion of Ukraine.
Several factors have contributed to this downturn:
- Declining gas prices
- Inconsistent government subsidies
- Ongoing cost of living crisis
The heat pump industry, which plays a crucial role in decarbonizing housing stock, has faced significant challenges. Paul Kenny, director of the European Heat Pump Association, highlighted supply chain issues as a major obstacle:
"The people who don't have a heat pump and want a heat pump crash into the barrier of a really poor supply chain."
Kenny emphasized the importance of improving public perception and ensuring heat pumps are both affordable and correctly installed.
Political resistance to heat pump mandates has emerged in several European countries. In Germany, Olaf Scholz's coalition government has scaled back plans to make heat pumps compulsory from 2024 due to public backlash. Italy has seen heat pumps become a focal point in opposition to EU net-zero plans, while the Netherlands' new right-wing government intends to revoke rules requiring homeowners to purchase heat pumps.
Despite these challenges, heat pumps offer significant environmental benefits. They can reduce carbon emissions by up to 50% compared to gas boilers and operate effectively in temperatures as low as -25°C. The global heat pump market is projected to reach $84 billion by 2028, indicating long-term growth potential.
To address the current slump, the European Commission is developing an action plan to boost heat pump sales, although its release has been delayed. The industry's future success may depend on addressing supply chain issues, ensuring consistent government support, and educating consumers about the long-term benefits of heat pump technology.
As the EU aims to install 60 million heat pumps by 2030, overcoming these obstacles will be crucial for meeting climate goals and reducing energy dependence. With proper maintenance, heat pumps can last 15-20 years and potentially increase home values by 5-7%, offering long-term benefits for homeowners willing to invest in this green technology.
