This is because many governments have started cutting taxes on electricity and heat pumps. In 2022, heat pump sales surged as gas prices spiked following Russia’s invasion of Ukraine. As energy prices fell and some countries scaled back support schemes, sales declined in 2023 and 2024.
The market recovered in 2025 thanks to stronger incentives and lower electricity taxes in several countries. Making electricity more affordable is essential. In many European countries, electricity is still taxed far more heavily than gas, although heat pumps make the most economic sense when electricity prices remain close to gas prices.
Countries with fairer energy taxation consistently have stronger heat pump markets. The EU is now placing electrification at the heart of its energy strategy.
Through its Electrification Action Plan, the European Commission has committed to improving the electricity-to-gas price ratio, aiming to reduce national ratios to 2.5 for households and 2.0 for industry by 2030.
Combined with energy taxation reforms, the phase-out of fossil fuel subsidies and support for heat pump financing, these measures could significantly increase heat pump uptake in Europe. More heat pumps also mean greater energy security.
