Heat pump sector under threat by weak EU laws and ‘unfavorable’ prices

Europe’s heat pump industry is “under threat” by inconsistent laws and unfavorable electricity-to-gas price ratios, claims the European Heat Pump Association (EPHA), headquartered in Brussels, today in a press release.

“With strong policies and great sales showing a clear path ahead in 2022, heat pump manufacturers invested massively in production capacity,” said EPHA’s secretary general, Thomas Nowak. “Now, sudden policy changes and unfavorable electricity-to.gas price ratios have shaken end users’ confidence. This is a serious threat to the heat pump sector – a key EU net zero industry – as well as slowing Europe on its path towards net zero and energy independence.”

The statement was released on the second day of the EU Heat Pump Forum: a two-day conference held in Brussels attended by stakeholders and policymakers who are focused on “expanding the role of Heat Pump Technologies in our society within the context of RepowerEU.”

The EPHA press release says that sales figures for a range of European countries are collected by each country’s own independent heat pump association and then supplied to the European association. “These figures led to the warning,” a spokesperson from the trade body told pv magazine today.

The association revealed that in Italy sales between the first halves of 2022 and 2023 fell by 34%, while Finland and Poland experiencing a drop of 17% and 6%, respectively.

Sales dips could be attributed to the respective government’s “changing” policies and market fluctuations. Italy’s support scheme was “less generous” and unclear, leading to canceled projects; “higher interest rates”, economic uncertainty and the “slowdown” of new building projects shook up Scandinavia; and electricity prices’ four-fold increase, “supply chain issues” and lack of “consistent” government policies impacted Poland sales.

The sales data referred to heat pumps sold to installers and distributors, not to the amount received by end users, the press release stated. Some heat pumps ordered last year by distributors – counted as sales in 2022 – were now stocked in warehouses waiting for end-user orders.

Nowak said the association urged the European Commission to expedite its EU Heat Pump Action Plan – a policy designed to accelerate the rollout of heat pumps across the European Union. Underpinned by the goal of installing at least 10 million additional heat pumps by 2027, and fueled by financial benefits, the strategy is slated to come into effect at the end of the year.

Nowak also said the document should also include “measures to ensure long-term stability in demand and affordability of clean heating solutions at its heart”, which are then replicated nationally.