How to make the heat pump a success

21.02.2025

Source: E & M powernews

There is a decisive lever for homeowners to opt for a heat pump, according to a KFW analysis.

Basically, the experts agree. The heat pump is crucial for a successful heat transition without fossil fuels. The state-owned KFW Bank has analyzed the acceptance of heat pumps. This shows that heat pumps are purchased particularly often when the electricity required is cheap compared to natural gas.

Sales of heat pumps have been rising in Europe for years, albeit with significant regional differences. While heat pumps already accounted for over 90% of heating systems sold in Scandinavia in 2023, the proportion in Germany was 27% according to the KfW analysis. Although the number of heat pumps sold fell in 2024, their market share remained constant.

According to KfW, there is a "clear structural change" in Germany. Heat pumps are now the predominant heat generator in new builds. In 2023, 72% of approved single-family homes and 52% of multi-family homes were equipped with heat pumps. The change is also evident in the heating market as a whole: while only one in ten of all heating systems sold in 2019 was a heat pump, in the past two years it was one in four.

Heat pumps are considered a key technology for a climate-friendly heat supply. It does not require fossil fuels and is a promising solution for both new and existing buildings. However, cost-effectiveness is crucial to their widespread use. As heat pumps are powered by electricity, the ratio of electricity to gas prices plays a key role, according to the KFW.

Favorable electricity price, many heat pumps

The analysis clearly shows that the proportion of heat pumps is particularly high in regions with a favorable electricity price compared to natural gas. The results suggest that the electricity-gas price ratio is a relevant lever for boosting the spread of heat pumps in Germany and Europe. An additional analysis for new buildings in Germany at district level confirms this correlation.

A decisive political lever is the CO2 price to further promote the spread of heat pumps. A rising CO2 price makes fossil heating systems increasingly unattractive. Part of the solution could also be special heat pump electricity tariffs based on time-variable prices. Heat pumps can potentially be controlled flexibly and are suitable for load shifting.

According to the KFW, heat pumps could be a cost-effective and sustainable solution in the long term - provided that the political and economic framework conditions are right.

The analysis "The heat pump is establishing itself in Europe - the electricity price as a factor" by KFW Research can be downloaded from the KFW website.

Author: Stefan Sagmeister