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Germans are rushing to apply for heat pump subsidies ahead of February’s federal election amid concerns that the new government will roll back financial support for the technology.
Author of the article:
Bloomberg News
Eva Brendel and Petra Sorge
Published Jan 14, 2025 • 1 minute read
(Bloomberg) — Germans are rushing to apply for heat pump subsidies ahead of February’s federal election amid concerns that the new government will roll back financial support for the technology.
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Applications jumped to 54,892 in December, more than doubling October’s levels, according to the economy ministry. Households can receive reimbursements of up to 70% for environmentally-friendly heating systems and are hurrying to make use of the support since Chancellor Olaf Scholz’s coalition collapsed in early November.
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The subsidies were introduced last August to cushion the impact from a controversial ban on most new fossil fuel boilers and after months of government in-fighting had caused heat pump demand to slump. The German Heat Pump Association expects sales to have dropped 45% last year to around 195,000 units.
However, subsidies have received more attention since the government’s collapse, a spokesperson for heat pump manufacturer Vaillant GmbH said. The company is seeing increased interest in the technology among end customers and has added more projects.
That’s because Germany’s conservative alliance — which is currently leading the polls — has promised to abolish the heating law that’s tied to the current funding scheme. It also wants to cut subsidies for certain technologies.
A spokesperson for the economy ministry said another possible driver for the rise in subsidy applications may have been a heat pump promotion week in October, organized by state energy agency Dena, which helped to dispel prejudices around the technology.
Countries such as Germany and the UK need to install heat pumps at a much faster pace to reduce emissions from the building sector, but strict regulations on fossil fuel heating are a sensitive issue along voters. BNEF researchers estimate that German spending on heat pumps will need to more than double by 2030 in order for the country to meet its net zero targets.
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