Under the 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 would otherwise be unable to invest.
To help achieve this, 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. Currently, only a few EU countries do this: Belgium, France, Ireland and the United Kingdom.
Reducing upfront costs is one of the fastest ways to accelerate heat pump adoption. Combined with lower electricity prices relative to gas, these measures can make clean heating and cooling affordable for many Europeans while reducing dependence on fossil fuel imports.
