EU report pinpoints three best countries for heat pumps

While operating a heat pump remains quite expensive in large parts of Europe, a report by the EU’s official research body identifies three EU countries which are well suited to heat pumps, thanks to their competitively priced electricity when compared to gas.

Heat pumps—described as ‘reverse fridges’ and which heat homes using power and outside temperatures—are considered vital to making home heating and cooling climate-friendly. The European Commission estimates that by 2040, more than 80 million devices will be installed across the bloc. 

However, with higher upfront costs, heat pumps rely on power not being too expensive relative to gas. The industry and experts suggest that power should cost no more than two and a half times more than gas. 

So when gas prices surged, heat pump sales followed suit – only to drop when gas prices fell back down.

However, a new report by the EU’s Joint Research Centre identified the three EU countries where the energy price ratio favours heat pumps: Sweden, Bulgaria, and Portugal. In each country, power is at most 50% more expensive than gas—a ratio favouring heat pumps, which operate three times more efficiently than gas boilers. 

While the right energy price ratio boosts heat pump deployment rates, it is not the only factor, as government installation subsidies also make a big difference.

Sweden has over two million heat pumps installed – every fifth citizen owns one. In comparison, there is just one heat pump for every 50 citizens in Germany. 

Heat pumps in Sweden – supported by up to €1,890 in subsidies – are most effective for cutting emissions because the country’s electricity mix is already almost entirely renewable. As a result, the report finds that every new heat pump in Sweden emits 99% less CO2 than a fossil heater. 

In Portugal, the heat pump market is dominated by air-to-air heat pumps, colloquially known as air conditioners. Still, despite the favourable price ratio, there is just one device for every 37 citizens. A support scheme covering 85% of the installation costs, capped at €2,500, hopes to increase these numbers.

Despite the favourable price ratio, heat pumps in Bulgaria struggle—just one device is installed for every 160 citizens. 

Worst performers

Some countries stand out for their outlandish power-to-gas price ratio: Italy, Belgium, and Lithuania. 

Decades of installing air conditioners have resulted in a comparatively high share of heat pumps in Italy. These units provide cooling in Summer. As a result, one device for every 20 citizens is installed. However, power is four times more expensive than gas in Italy, so their use for heating in winter is much less attractive.

Belgium paints a similar picture—except most heat pumps sold are the larger, more expensive (but more efficient) water-based models, so their share in sales is just 12%. With a power-to-gas price ratio similar to Italy’s, they come at a double cost to their owners: high investment and operating costs.

Only Lithuania, where power is five times more expensive than gas, has a less favourable energy pricing framework. Yet, thanks to generous government subsidies, heat pumps have made up almost 50% of new heater sales since 2019.

[Edited by Donagh Cagney/Alice Taylor]

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