European heat pump sales rise as energy prices and tax cuts shift demand

Sales of residential heat pumps rose across Europe in the first half of the year, according to industry data, as higher oil and gas prices and lower electricity taxes in some countries changed the economics of home heating. The European Heat Pump Association said 1.16 million units were sold across 12 European countries, up from 1.05 million in the same period in 2025. The figures point to a broader shift in consumer demand at a time when governments are trying to reduce reliance on fossil fuels.

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The association linked the increase to the fallout from the Iran war, which disrupted oil and gas markets and pushed crude prices sharply higher in late April. It said Iran's de facto closure of the Strait of Hormuz, a key shipping route, severely affected energy flows. The European Commission also moved soon after the conflict began to encourage member states to lower electricity taxes and speed up the transition away from oil and gas.

Heat pumps work by transferring heat from one place to another rather than burning fuel, and can be used for both heating and cooling. The association said sales had risen in countries where electricity taxes were cut, while Germany's subsidy scheme helped make heat pumps the most installed heating technology there. The 12 countries covered in the data were Austria, Belgium, Switzerland, Denmark, Finland, France, Germany, Italy, the Netherlands, Norway, Portugal and Sweden.

The development matters because it links household energy choices directly to policy decisions and international market shocks. The European Commission has said electricity should not be taxed more heavily than gas, and it wants to adjust network charges on utility bills to reward flexible technologies such as heat pumps. That approach is intended to make electrification more attractive as Europe tries to reduce exposure to volatile fossil fuel imports.

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The data also underlines how quickly consumer behaviour can respond when the relative cost of electricity and gas changes. The association said the trend supports its long-standing argument that the popularity of heat pumps depends heavily on electricity prices. Its director general said Europe should move away from gas and that governments should drop taxes on electricity and shift them on to fossil fuels, following the example of the Netherlands and Belgium.

What remains unclear is how far the sales increase will continue if energy prices ease or if tax changes are reversed. It is also not yet clear how quickly all EU governments will adopt the Commission's preferred approach on electricity taxation and network charges. The next test will be whether the current rise in sales becomes a longer-term shift in heating technology across the bloc.

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