The crisis in the Middle East is sending gas and oil energy prices skyrocketing, and this is already leading to higher demand for heat pumps. The heat pump sector can scale up, provided stable growth is ensured by structural and long-term measures. There are already many trained installers as well as other workers in adjacent sectors who could shift to heat pumps.
Likewise, Europe’s heat pump manufacturing capacity – which was hugely extended following the surge in demand in 2022 – is significantly underused. Factories could produce several times current market volumes. The key constraint is the conditions needed to unlock this extra capacity.
When demand for heat pumps dropped post-2022, it left companies with excess inventory. This means manufacturers are now reluctant to scale up production without strong and credible signals that demand will materialise in the long term, such as regulatory clarity and tax shifts from electricity.
The five measures in this plan can help to rapidly scale up heat pumps.
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