The issue of housing and heating is by no means off the table, even if hardly anyone wanted to hear about it at the end of the old government coalition - quite the opposite. Where does Germany stand now? Where do we go from here?
Heat pumps can significantly reduce heating costs, especially in well-insulated houses. Nevertheless, they are not installed as often as would be desirable. This is shown by the results of the "Heat and Housing Panel" of the Kopernikus project Ariadne, which is funded by the Federal Ministry of Research, Technology and Space.
The planned integration of the national CO2 price for buildings into European emissions trading will make the operation of oil and gas heating systems more expensive in the long term. In this context, the report recommends that the barriers to energy-efficient refurbishment and the replacement of heating systems be taken into account in political measures.
The energy renovation rate of the building envelope remains below the target of two per cent per year. At the same time, the rate of heating modernisation in existing buildings fell after reaching a temporary peak in 2022. A lack of information on funding programmes and political uncertainties surrounding climate policy, the Building Energy Act and municipal heating planning are slowing down the heating transition.
The heating market is showing a trend reversal: Sales of gas heat generators fell by 48 per cent and those of oil heaters by as much as 81 per cent in the first quarter of 2025, while sales of heat pump heaters rose by 35 per cent. As a result, heat pumps accounted for 42 per cent of the entire German heating market in the first quarter. In a survey, 70 per cent of respondents rejected oil heating and 60 per cent rejected gas heat generators (source: Energy Trend Monitor Germany 2025).
The reduction in electricity prices announced by the new German government should encourage the installation of heat pumps: electricity tax is to be reduced by two cents per kilowatt hour (kWh) and grid charges by three cents per kWh, meaning that consumers will pay at least five cents less per kWh in total.
Graphic: Federal Association of the German Heating Industry (BDH), Stiebel Eltron
