Heat pump targets out of reach without sufficient subsidy

Heat pumps sold like hot cakes until 2023, but the market collapsed in 2024. The reason was the cancellation of the announced measure to make hybrid heat pumps mandatory when replacing central heating. The government placed less emphasis on sustainability, and even in the current political situation, the subject is not high on the agenda.

According to the Heat Pump Trend Report, which Dutch New Energy Research recently presented at the Green Heating Solutions trade show, heat pump sales picked up in the first four months of 2025, but that is based on bids made in 2024, which were then subject to favorable subsidy conditions. The subsidy was reduced in early 2025, so the spike will be short-lived. Indeed, past experience has clearly shown that subsidies are an important incentive for households to opt for a sustainable solution such as a hybrid or an air-to-water heat pump.

Heat pumps in new construction and utilities

In new construction projects and the utility sector, many water-water heat pumps in particular are being installed. In new construction, gas connections are no longer allowed, and heat pump technology benefits from economies of scale. In utilities, the relationship between gas and electricity prices play a role, more long-term considerations are taken into account, and investment budgets tend to be larger. The heat pump market has been growing steadily in that sector for many years. Yet in 2024, a decline occurred: 12% less thermal power was commissioned. That power level is likely to stabilize in 2025. By the end of 2025, the total installed thermal capacity in the utilities sector is expected to reach about 3.2 GW.

Air conditioners

Sales of air-to-air heat pumps, or air conditioners, are less dependent on government policy. They are bought primarily as a comfort product, and a growing number of households keep their homes cool in the summer with an air conditioner. Combined with solar panels, this is advantageous in the summer. If the balancing scheme falls away and it is advantageous to match generation and consumption, perhaps that will stimulate the growth of the air conditioning market in the future.

But air-to-air heat pumps cannot only cool. Thanks to their heating capacity, they can act partly or even completely as an alternative to traditional central heating boilers, thus making part of the heat demand more sustainable. If the price of gas rises relative to electricity, more households will start using their air conditioners for heating for cost reasons.

Government holds the key

Households generally certainly see the value of sustainability. And figures show that the market responds quickly to financial incentives. With current policies, the goal of 1 million hybrid heat pumps by 2030 is unlikely to be achieved. So the government holds the key to encouraging sustainable technologies like the heat pump. And for the success of the energy transition.