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Heat pumps are gaining ground in Europe – electricity prices matter

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  • Letz, Carolin
  • Rode, Johannes
  • Römer, Daniel

Abstract

Heat pumps are a key technology for decarbonising domestic heat. In the past 10 years, sales of heat pumps have grown considerably in Germany and Europe. There are regional differences and heat pumps already have a very high market share particularly in northern Europe. This study examines the factors in play and analyses the influence of the relative electricity price on the diffusion of heat pumps. The empirical findings suggest that the electricity-to-gas price ratio is a relevant lever for strengthening the diffusion of heat pumps in Germany and Europe. Survey data from the KfW Energy Transition Barometer support this result, as households themselves also mention cost-effectiveness as a major factor for their use. This opens up options – particularly for a country like Germany, which also manufactures heat pumps.

Suggested Citation

  • Letz, Carolin & Rode, Johannes & Römer, Daniel, 2025. "Heat pumps are gaining ground in Europe – electricity prices matter," Publications of Darmstadt Technical University, Institute for Business Studies (BWL) 153404, Darmstadt Technical University, Department of Business Administration, Economics and Law, Institute for Business Studies (BWL).
    • Handle: RePEc:dar:wpaper:153404
    Note: for complete metadata visit http://tubiblio.ulb.tu-darmstadt.de/153404/
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