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Sales of heat pumps have risen sharply in Germany in recent weeks because buyers fear an incoming conservative government will scrap generous grants for replacing gas-fired boilers with heating systems that run on renewable energy.
Thermondo, Germany’s largest heat pump installer, said the company’s sales of the devices had “increased by a factor of 2.5-3 in the past few weeks compared to the end of October”. It added: “In the last week of November we had a record number of new orders.”
Thermondo’s rival Enpal is experiencing a similar uptick. “We are constantly having to adjust our installation capacities to demand, which is continuing to increase,” said the company.
The centre-right CDU/CSU bloc, which polls suggest is on course to win February’s snap election, has said it wants to abolish a German law stipulating that heating systems installed in new buildings must be at least 65 per cent powered by renewable energy.
The controversial measure, pushed through by Green economy minister and deputy chancellor Robert Habeck, has long been a bugbear of the right. When it was first proposed last year, conservative media warned that ordinary homeowners would be forced to rip out their gas boilers — despite Habeck’s repeated assurances to the contrary.
In its manifesto, the CDU/CSU says it wants to stop “governments deciding what kind of boilers people put in their cellars . . . We will promote low-emission heating solutions, without giving preference to any particular technology”.
The existing law provides generous subsidies that can cover up to 70 per cent of the procurement and installation costs of a new heat pump. Many of the law’s supporters fear that this subsidy will be at risk if the CDU/CSU wins February’s election.
Such concerns were intensified by Jens Spahn, a senior CDU MP, who told the Frankfurter Allgemeine Zeitung in November that the CDU/CSU would “bring Habeck’s subsidy programme to an end”.
“Up to €20bn have been earmarked for the conversion of heating systems for this year alone,” he told FAZ. “You won’t need these sums if you rescind the law.” Spahn has subsequently said, however, that state support programmes would continue in some shape or form.
Trade body Federal Heat Pump Association said there was a direct link between the recent surge in sales and the Christian Democrats’ planned policy change. “Fears that the CDU/CSU wants to reduce the subsidies could be driving the market, in the short-term at least,” it said.
“The [government] support for heating systems that currently exists is the most attractive we’ve ever had,” Thomas Heim, managing director of engineering firm Viessmann’s heating unit, which was sold to Florida-based Carrier Global last year, told Handelsblatt last month. “These populist discussions are just spreading uncertainty in the population.”
Uncertainty has led to a stampede of applicants for the heat pump grants, which are disbursed via KfW, Germany’s state-owned lender. Susanne Ungrad, spokesperson for Habeck’s economy ministry, said there had been a “big increase” in requests for the grants. “At the moment we’re seeing about 6,000-8,000 applications a week,” she said, adding that they are as a rule “immediately approved”.
She also stressed that the grant programme would be safeguarded well into next year, even though the outgoing government of Olaf Scholz failed to pass a 2025 budget.
Germany’s heat pump market has struggled to get off the ground, despite Habeck’s law. The industry saw a record year in 2023, with 356,000 units sold, but expects to have sold only 200,000 units this year.
Supporters of the subsidies note that heat pumps could become much more cost-efficient to run in the next few years, despite their relatively high purchase cost.
New EU legislation designed to cut greenhouse gas emissions from the building sector will substantially push up the price of CO₂ generated by fossil fuel-based heating systems such as gas boilers from 2027.
The legislation was agreed in 2022 when the EU agreed to set up a second emissions trading system to cover the CO₂ emissions from fuel combustion in buildings and road transport and other sectors not covered by the bloc’s existing cap-and-trade ETS.
