The use of heat pumps remains still quite expensive in large parts of Europe. A report by the EU's official research body has identified three countries that are well-suited for heat pumps thanks to their competitive electricity price compared to gas, reports Euractiv.
Heat pumps are considered vital in efforts to make heating and cooling homes climate-friendly. The European Commission estimates that by 2040, more than 80 million devices will be installed across the bloc.
With higher initial costs, heat pumps become financially viable over their life cycle, using power that is not too expensive compared to gas. Industry and experts suggest that electricity should cost no more than two and a half times that of gas. So when gas prices spiked, heat pump sales followed suit – only to decline when gas prices fell back.
The heat pump market in the EU
However, a new report by the EU Joint Research Center has identified the three EU countries where the energy price ratio is in favor of heat pumps: Sweden, Bulgaria and Portugal. In each country, electricity is at most 50% more expensive than gas – a ratio in favor of heat pumps, which work three times more efficiently than gas boilers.
Although the right ratio of energy prices increases the rate of deployment of heat pumps, it is not the only factor, as government subsidies for installation also make a big difference.
In Sweden, there are over two million installed heat pumps – every fifth citizen owns one. In comparison, in Germany there is only one heat pump for every 50 citizens. Heat pumps in Sweden – supported by up to €1890 in subsidies – are the most effective at reducing emissions, as the country's electricity mix is now almost entirely renewable. As a result, the report found that every new heat pump in Sweden emits 99% less CO2 than a fossil heater.
In Portugal, the heat pump market is dominated by air-to-air heat pumps. And yet, despite the favorable price ratio, there is only one device for every 37 citizens. A support scheme covering 85% of installation costs, capped at €2500, hopes to increase these numbers.
Despite the favorable price ratio, heat pumps in Bulgaria are difficult - only one device is installed for every 160 citizens.
Worst performers
Some countries stand out for their strange ratio between the price of energy and gas: Italy, Belgium and Lithuania. Decades of air conditioning installations have led to a relatively high share of heat pumps in Italy. These modules provide cooling in the summer. As a result, one device is installed for every 20 citizens. However, electricity is four times more expensive than gas in Italy, so using them for heating in winter is much less attractive.
The situation in Belgium is similar - except that most of the heat pumps sold are the larger and more expensive, but also more efficient, water models. With an electricity/gas price ratio similar to that of Italy, they come at a double cost to their owners: high investment and operating costs.
Only Lithuania, where electricity is five times more expensive than gas, has a less favorable energy pricing framework. However, thanks to generous government subsidies, heat pumps accounted for almost 50% of new heater sales in 2019.