European Heat Pump Sales Climb as Electricity Tax Cuts Bite

European homeowners bought 1.16 million heat pumps across 12 countries in the first six months of this year, up from 1.05 million in the first half of 2025, according to new data from the European Heat Pump Association (EHPA).

That is a year-on-year increase of roughly 10%, and the EHPA attributes it to two forces working in tandem. The first is fiscal: several European governments have lowered electricity taxes, narrowing the price gap between running a heat pump and burning fossil fuels for heating. The second is geopolitical: the Iran war sent oil and gas prices rocketing, making gas boilers more expensive to operate and heating oil a costlier bet for households across the continent.

The numbers mark a reversal of fortune for a sector that had come under pressure. Higher electricity costs relative to gas had blunted the economic case for heat pumps in several markets, and the industry had watched sales stagnate. The EHPA's first-half figures suggest the tax cuts and the fossil fuel price spike have together restored momentum to the technology that Brussels considers central to decarbonising European buildings.

The policy direction is set to harden. The European Union intends to push member states to cut electricity tax rates below the duties levied on gas, according to the report. Such a move would lock in a structural price advantage for electric heating technologies and represents a significant intervention in energy taxation across the bloc.

For manufacturers, the sales pickup signals recovering demand after a difficult stretch. For governments, it offers early evidence that tax policy can move consumer behaviour in the heating market faster than subsidy schemes alone. And for households, the calculus is increasingly shaped by the volatility of fossil fuel markets — a volatility the Iran war has made impossible to ignore.

The stakes extend beyond individual purchasing decisions. Heating and cooling account for a large share of European energy demand, and the pace of heat pump adoption will determine whether the bloc meets its emissions targets for buildings. The EHPA's data, covering 12 countries, provides the most reliable industry-wide picture of that pace available.

If the EU succeeds in pushing electricity taxes below gas duties across member states, the price signal that drove first-half sales could strengthen further in the second half of the year and beyond — turning a war-driven, tax-assisted surge into a durable structural shift in how Europe heats its homes.