Optimism for further growth on the German heat pump market 

After a record-breaking year in 2023, Germany’s heat pump market experienced a decline in sales in 2024. However, the German Heat Pump Association (BWP) remains optimistic about a strong recovery in 2025, citing the positive impact of new heating subsidies introduced in February 2024. The “Federal Funding for Efficient Buildings” (BEG) program had already approved over 151,000 funding commitments in 2023, with a notable surge in December. BWP managing director Martin Sabel highlighted the increasing interest in these subsidies, which are expected to stimulate demand if consistently supported and promoted. 

The BWP anticipates a 33% increase in heat pump sales in 2025, estimating around 257,000 units sold under current conditions. The association also believes that further market growth could be achieved with measures such as lowering electricity prices, which would make heat pumps more affordable and attractive to consumers. Looking ahead, the BWP projects that annual sales could surpass 500,000 units in the coming years, potentially reaching over five million installed units by 2030. Industry players, including manufacturers, trade professionals, and housing sectors, have pledged to meet the necessary capacity at various heat pump summits. 

The association has called on policymakers to maintain existing frameworks, such as the Building Energy Act and Heating Planning Act, to ensure a smooth transition to a climate-neutral building stock. They also urged the government to reduce electricity prices by addressing network fees and electricity taxes, incentivizing the shift to renewable energy. According to Sabel, visible consumer benefits from electrification are essential for sustained market growth. 

Read more in article from Handelsblatt 

The municipal heat planning shows visible progress and pathways for further advancements 

Germany’s heating transition is gaining momentum, with the Heating Planning Act in effect since January 2024. This act mandates comprehensive municipal heating planning to guide citizens, municipalities, and energy suppliers toward climate-neutral heating solutions. According to the German Association of Energy and Water Industries (BDEW), 98% of municipalities with over 45,000 residents have initiated or completed heating plans. In North Rhine-Westphalia, many municipalities began heating planning voluntarily, even before the state law was enacted in December 2025. Despite this progress, practical implementation now requires fine-tuned funding programs, revised regulations, and consistent legal frameworks to provide investment and planning security. 

Challenges remain as deadlines approach, requiring municipalities with over 100,000 residents to finalize heating plans by June 2026, and smaller ones by June 2028. Federal states without specific heating laws, such as Bavaria and Saxony, must align with federal requirements. Notably, Baden-Württemberg has already mandated heating plans, with larger municipalities completing theirs by the end of 2023. To meet these deadlines, coordination across municipalities, energy suppliers, and policymakers is vital. Nationwide dialog and the expansion of heating networks based on realistic assumptions will help ensure practical and effective implementation. 

Financing remains a critical factor for the heating transition. Aligning legal frameworks, funding mechanisms, and technical solutions is essential for success. With pressure to decarbonize the heating sector, efforts from Swedish actors can contribute to Germany achieving its climate neutrality goals. 

Read more in article from BDEW 

To stay updated on news for sustainable heating and cooling, follow us on LinkedIn, and subscribe to our Newsletter.

Sweden is at the forefront of decentralised heat networks technology. Our aim for “Sustainable Heating & Cooling by Sweden” is to facilitate knowledge sharing between British, French and Swedish stakeholders and develop and encourage environmental and economic best practice.

To find out how we can help you and your organisation, please contact our London or Paris-based “SHC” teams. We can introduce you to leading consultants, suppliers of technology and services who will be pleased to share know-how of the development of sustainable heating & cooling solutions.