Heat pumps save energy, cut emissions and can reduce household heating bills by up to 60%.
Yet for many households, the upfront investment is too much.
The European Commission’s Electrification Action Plan tackles this challenge head-on, proposing a range of measures to make heat pumps and other electrification technologies more affordable.
One of them is social leasing for heat pumps.
Under a social leasing model, households pay an affordable monthly fee to use a heat pump instead of covering the full purchase and installation cost upfront. Combined with subsidies, zero- or low-interest loans and on-bill financing, these schemes can make clean heating accessible to households that might otherwise be unable to invest.
To help make this happen, the Commission will provide guidance to Member States and encourage them to use the Social Climate Fund to finance these schemes, particularly for low- and middle-income households.
The Plan also encourages Member States to apply a lower VAT rate to heat pumps than to gas boilers, recognising that tax policy can help level the playing field between clean technologies and fossil fuel heating.
Today, only a few EU contries do so: Belgium, France, Ireland, and the UK
Reducing upfront costs is one of the fastest ways to accelerate heat pump deployment.
Combined with lower electricity prices relative to gas, these measures can make clean heating and cooling affordable for many more Europeans while reducing dependence on imported fossil fuels.
