Europe’s Heat Pump Market Cools: Sales Drop for the First Time in a Decade

27/02/2024

In 2023, heat pump sales across 14 European countries fell by 5%, reversing a decade-long growth trend.
Key markets like France, Italy, and Sweden saw major declines, while gains in other countries failed to offset the overall drop.
Political uncertainty and postponed EU support measures shook consumer and investor confidence.
High electricity costs relative to falling gas prices reduced the financial appeal of heat pumps.
Stronger, stable policies and carbon pricing are essential to revive demand and meet 2030 climate targets.

Heat pump sales decline as energy prices shift and political uncertainty clouds Europe’s climate ambitions.

In 2023, heat pump sales across 14 European countries dropped by around 5% compared to the previous year, totaling 2.64 million units sold. This marked the first decline in a decade of continuous growth, signaling a major shift for the sector. As a result, manufacturers are beginning to downsize, with about 3,000 jobs expected to be impacted.

Countries like France, Italy, Sweden, Finland, Poland, Denmark, Austria, and Switzerland experienced declines in sales. Although Portugal, Belgium, Norway, the Netherlands, Spain, and Germany recorded growth, it was insufficient to balance the overall downturn. Even among growing markets, sales started declining quarter by quarter toward the end of 2023.

A major factor behind this trend is the postponement of the EU’s long-awaited Heat Pump Action Plan, leaving investors and consumers in limbo. Meanwhile, rising interest rates and shifting national policies further deepened uncertainty. In contrast to 2022—when the European energy crisis drove a surge in heat pump adoption—many governments in 2023 limited or withdrew their support schemes, as seen dramatically in Italy.

This sales slump jeopardizes the EU’s key climate and energy objectives, including achieving 49% renewable heating by 2030 and deploying 60 million heat pumps under the REPowerEU plan. Thomas Nowak, Secretary General of the European Heat Pump Association (EHPA), warned that without corrective action, decarbonization and energy independence will be much harder to achieve.

While high gas prices made heat pumps an attractive option in 2022, falling fossil gas prices combined with persistently high electricity taxes have flipped the cost equation. In many places, electricity prices are now up to four times higher than gas prices, undermining the financial advantages of heat pumps.

To reverse this trend, stable policy support is crucial. Measures like carbon pricing and electricity tax reforms—aimed at reducing the electricity-to-gas price ratio to about 2:1—could enhance the financial appeal of heat pumps, stimulate demand, and ensure that Europe’s clean heating transition stays on track.

European Heat Pump Association

Heat pump sales fall by 5% while EU delays action

Heat pump sales in 14 European countries fell by around 5% overall in 2023 compared […]

Europe’s Heat Pump Market Cools: Sales Drop for the First Time in a Decade

Heat pump sales decline as energy prices shift and political uncertainty clouds Europe’s climate ambitions.

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