Sales of residential heat pumps jumped across Europe in the first six months of the year as the Iran war sent oil and gas prices soaring and some countries lowered electricity taxes. Homeowners bought 1.16 million heat pumps across 12 European countries, up from 1.05 million in the first half of 2025, according to the European Heat Pump Association (EHPA). Iran’s de facto closure of the Strait of Hormuz, an important shipping passage, severely disrupted the flow of oil and gas shipments and sent the price of crude oil as high as $126 a barrel in late April. Soon after the US-Israeli attacks on Iran on 28 February that started the war, the European Commission published plans to encourage EU governments to lower electricity taxes and speed up the shift from fossil fuels oil and gas to renewable sources of energy.
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Soaring energy prices and electricity tax changes have fuelled the growth in heat pump sales so far this year, said the EHPA, which has long argued that the popularity of the heating systems depends heavily on the price of electricity. Rather than generating heat from burning fuel, the pumps transfer heat energy from one place to another and can be used for warming and cooling a home. In its electrification action plan, the commission said tax on electricity should be no higher than that on gas. Brussels hopes to amend the network charges that consumers pay on their utility bills to reward flexible options such as heat pumps. Heat pump sales have risen in European countries where electricity taxes have been cut, the EHPA said. In Germany, a subsidy scheme has led to heat pumps being the No 1 heating tech being installed, it added. The 12 countries covered in the data are Austria, Belgium, Switzerland, Denmark, Finland, France, Germany, Italy, the Netherlands, Norway, Portugal and Sweden.
Paul Kenny, the EHPA director general, said: “Europe is ending its addiction to a toxic, costly drug from dodgy suppliers: gas. The sooner electricity becomes the most affordable solution, the quicker we’ll get clean. The fix? Dropping taxes on electricity and shifting them over to fossil fuels. The European Commission has made this clear – but now all EU governments must enact it, following in the footsteps of the Netherlands and Belgium.”
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The industry body found that taxes on electricity were often higher than on gas, which drives up the cost sharply. In the UK, electricity costs more than four times as much as gas, similar to Belgium. The only country where the ratio is higher is Romania, where electricity prices are five times as high as those for gas. The EHPA said countries that taxed electricity more than gas saw slower adoption of heat pumps and were more dependent on fossil fuels. It pointed to Belgium, where heat pump uptake remains low, although the government announced tax changes for 2026 that will cut electricity costs by 3% and raise gas costs by 3%.
Separately, a two-year study by the London-based Centre for Net Zero found that installing solar panels and a battery in a UK home saves £681 a year on average. Families’ annual bills fell by almost two-thirds (62%) after they received free solar panels and a battery, based on smart meter data used to calculate their electricity bills, in news first reported by the Times. Great Britain recorded more new solar power installations in the first half of this year than in any six-month period since 2011, according to government figures published in July.
Frequently Asked Questions
Here is a list of FAQs about the surge in heat pump sales in Europe following electricity tax cuts
The Basics
What is a heat pump
Its a device that moves heat from outside to inside your home using electricity It works like a refrigerator or air conditioner but it can heat your house even when its cold outside
Why are heat pump sales suddenly going up in Europe
Governments in many European countries have cut taxes on electricity This makes electricity cheaper so running a heat pump costs much less than it used to compared to gas or oil boilers
How does a tax cut help heat pumps
Heat pumps run on electricity If the government lowers the tax you pay on that electricity your monthly heating bill drops This makes heat pumps a much more attractive financial choice for homeowners
Are heat pumps better than gas boilers
In most cases yes They are much more efficient and they dont release carbon dioxide directly into your home They are a key tool for reducing pollution
Benefits and Money
Do heat pumps actually save me money
It depends on the price of electricity versus gas in your country With the recent tax cuts in many European countries heat pumps are now cheaper to run than gas boilers They also often require less maintenance
Are there government grants to help buy one
Yes Many European governments offer subsidies to cover part of the upfront cost of buying and installing a heat pump These grants vary by country so you need to check your local government website
Why are governments cutting electricity taxes
To encourage people to switch to cleaner heating By making electricity cheaper they make heat pumps more competitive against fossil fuels like oil and gas
Can a heat pump heat my home in a very cold winter
Yes Modern heat pumps are designed to work in freezing temperatures However in extreme cold they may need to work harder and their efficiency drops slightly In very cold climates they are often paired with a backup heater
Common Problems and Practical Tips
What is the biggest downside to a heat pump
The upfront cost They are usually more expensive to buy and install than a traditional gas boiler However the tax cuts and grants help offset this over time
