Interest in “renewable” heat cooled last year after a strong 2022

Heat consumption still accounts for almost half of final energy consumption and around 40% of energy-related CO2 emissions. Between 2017 and 2023, annual heat consumption worldwide rose by 7%, and since modern technologies based on renewable energy sources covered only half of that increase, annual CO2 emissions from heat production rose by 5% over the same period. This is according to figures published by the International Energy Agency (IEA) in its regular annual report, Renewables 2024.

The IEA said in its report that installations of both solar thermal systems and heat pumps declined last year. Installations of solar thermal systems fell by 7%, while heat pump installations were down by 3%.

"In 2023, high interest rates, inflation, lower construction activity in many countries, a return to lower natural gas prices and changing policy measures reshaped the renewable heat market. Heat pumps, solar thermal systems and geothermal heating systems have low operating costs, but require a significant investment from households, making sales highly sensitive to financing costs and consumer sentiment," the agency said.

The IEA attributes the decline in the solar thermal market mainly to China, where the difficult situation in the property market continues. Significant falls were also recorded in Denmark (-25%), Spain (-26%), Germany (-46%) and Poland (-38%). By contrast, strong growth was observed in the United Kingdom (+ 66%), India (+27%) and Greece (+10%).

Following sharp growth in 2022, the heat pump market also contracted. In Japan, one of the most developed heat pump markets, sales of air-to-water heat pumps fell by 10%. In the United States, the decline was as high as 15%.

According to the IEA, heat pump sales in Europe fell by 6.5% year on year last year, but trends varied considerably among member states. While Germany recorded growth of 59% and Belgium a remarkable 72%, sales fell by 44% in Italy and by around 40% in Finland and Poland.

Demand for heat pumps in the EU is falling sharply

The difficult situation in the heat pump market last year was apparently a sign of what was to come this year. According to the Heat Pump Association, 1.44 million heat pumps were sold in Europe in the first half of last year, while this year sales have been barely half that volume.

The European Commission had previously set a target of 60 million installed heat pumps by 2030. There are currently 24 million, and the European Heat Pump Association warns that the target is at risk of being missed.

Czech companies also confirm the decline in demand, particularly for installations in detached and apartment buildings. For Czech manufacturers, exports to foreign markets and growing interest from businesses are therefore currently crucial.