The European residential heating market, once expected to transition steadily towards heat pumps, has faced setbacks in recent years, according to a new study by BSRIA. Sales of heat pumps in five key markets - UK, Italy, France, Germany, and the Netherlands - declined by double digits in 2024, reflecting broader market challenges. Other heating technologies also saw decreasing sales, with the exception of electric boilers, which showed a modest upward trend.
The study identifies multiple factors contributing to the slowdown, with policy direction and financial incentives playing crucial roles. Over the past two years, policy support for heat pumps has weakened across Europe, and economic uncertainty has further dampened consumer confidence. High borrowing costs and immediate financial concerns have outweighed long-term climate considerations for many households.
However, there are signs of renewed focus on heating decarbonisation. The Heat Pump Accelerator Platform, launched in November 2024, aims to foster cross-country collaboration to support heat pump deployment. Additionally, the UK has increased funding for homeowners replacing fossil fuel boilers with heat pumps, reversing previous cuts to incentives.
Despite these developments, the market is shifting towards a more balanced approach between government-driven incentives and consumer-led adoption. Alternative technologies such as district heating, heat interface units, and electric boilers are gaining traction.
BSRIA's new study provides two sales scenarios for fossil fuel boilers, electric boilers, hydronic heat pumps (including hybrid units), air-to-air heat pumps, and heat interface units across the five key markets. The analysis considers policy evolution, financing capabilities, and other key factors influencing the future of residential heating.
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