Affordability
Make heat pumps affordable for all
Heat pumps use three to five times less energy than gas boilers.
Despite this, high upfront costs and electricity prices can put consumers off.
Ensuring electricity is no more than twice the price of gas, flexible electricity tariffs and targeted support for low-income households can make clean, cost-effective heating accessible to everyone.
People need to see a rapid return on investment on their heat pump.
To achieve this, electricity should be no more than double the price of gas.
Electricity costs can be reduced by shifting taxes and levies away from electricity bills and phasing out fossil fuel subsidies. Putting a price on carbon pollution and offering consumers a lower or variable electricity tariff if they switch to flexible, renewable heat pumps are also key.
Financial tools, government support, private sector financing and alternative business concepts to reduce the cost are essential to tap into the energy savings heat pumps provide.
Low-income households should be shielded from high energy prices. They should have access to cleaner and, ultimately, cheaper to run heating and cooling solutions like heat pumps.
What's the EU doing?
ACTION PLAN ON AFFORDABLE ENERGY
High energy prices in the EU are making it harder for households and businesses to switch from gas to heat pumps as shown in this series of maps.
The European Commission addressed this issue by publishing an Action Plan for Affordable Energy alongside the Clean Industrial Deal in February 2025.
The plan focuses on reducing system costs, including grid charges, taxes, and levies, while also tackling energy poverty to ensure that vulnerable households aren’t left behind in the transition to cleaner, more affordable energy.
EHPA calls for an EU-level approach to taxation which reduces the overall electricity costs for households, businesses and industries. At both national and European levels, the balance of electricity costs, levies, charges and grid investment should all be designed to increase electrification and make electricity more competitive than gas.
EHPA also supports a 0% VAT on heat pumps and encourages Member States to take it up as an option.
Position papers and joint statements:
Press release: EU focus on energy costs is right call to boost heat pumps
26/02/2025
EU Emissions Trading System & Social Climate Fund
The EU Emissions Trading System (ETS) is the world’s first and one of the largest carbon markets. It requires companies to pay for their emissions, which should encourage them to emit less.
From 2027, this system will also cover carbon emissions from buildings, road transport, and other sectors (ETS2). All allowances will be auctioned, with part of the revenue funding a Social Climate Fund (SCF) to support vulnerable households and micro-enterprises, ensuring they are not left behind in the green transition.
EHPA believes that if implemented properly and with the right social support, it will help more households to switch to heat pumps.
What has the EU already done?
Taxonomy
The aim of the EU Taxonomy is to ‘guide’ investors towards sustainable economic sectors. EHPA supports heat pumps being recognised as sustainable under the EU Taxonomy in order to channel investments to them.
Have questions on a specific file or position? Click here to find the right policy colleague to assist you. For general inquiries, email policy@ehpa.org.
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