Germany: Demand for heat pumps plunges this year, while sales of gas boilers double

Demand for heat pumps in Germany has plunged this year. This is reflected in the drop in applications for investment subsidies, with roughly half as many submitted in the first half of this year as in the first half of last year. According to the international news outlet Clean Energy Wire, the fall in demand for heat pumps is due to uncertainty among residents, who are confused by the ongoing political debate over a ban on installing new gas boilers.

The international news outlet Clean Energy Wire reported that the number of applications for investment subsidies for heat pumps fell by around 50% year on year to 48,804. According to the German association ZVHSK, which represents installers, heating engineers and air-conditioning suppliers, these figures reflect considerable uncertainty caused by the proposed legislation under debate, which would gradually ban the installation of new gas boilers.

"Our companies cannot reliably advise on how subsidies will continue. It is therefore no surprise that consumers and businesses are opting to wait and see in the current situation," the association said.

As demand for heat pumps falls, demand for gas boilers is rising. According to ZVHSK, 168,000 were sold in the first quarter, a 100% increase on the same period the previous year.

Government had to abandon original deadline for banning gas boiler installations

The ban on installing new gas boilers was originally due to take effect in 2024, but the German government had to push back the deadline and increase subsidies for low-emission alternatives in order to reach a compromise on the proposed legislation under debate.

According to a summary of the ongoing debate prepared by Clean Energy Wire, the ban on installing gas boilers from 2024 would now apply only to new buildings in newly developed residential areas.

In existing buildings and new buildings outside newly developed residential areas, it should still be possible to install new gas boilers until the respective municipalities publish plans to decarbonise heating. Large cities with more than 100,000 residents must do so by mid-2026, while smaller cities have until mid-2028.