Nobody is talking about this, but the quiet collapse of heat pump sales might be the most consequential climate story you’ve never heard. While headlines scream about record-breaking heatwaves and wildfires — and yes, Europe just sweltered through another deadly one — a much slower, more insidious crisis is unfolding in the heating systems of millions of homes. Heat pump growth has stalled. Badly. And it’s not because people suddenly fell out of love with energy efficiency.
It’s because the government pulled the plug on the very grant programme that made them affordable.
A new analysis from the Climate Action Monitor (CAM), an independent watchdog, reveals that global heat pump sales growth slowed from 24% in 2022 to just 6% in 2024 — a dramatic deceleration that the group directly attributes to the curtailment of consumer subsidies. The UK alone saw a 31% drop in certified installations after the Boiler Upgrade Scheme was slashed from £7,500 to £5,000 in late 2023. Sales in Germany fell 18% after the government quietly capped rebates. The pattern is stark, and the timing couldn’t be worse.
The Grant That Made Heat Pumps a No-Brainer
Heat pumps are the single most efficient technology for decarbonising home heating. They work like a refrigerator in reverse, extracting heat from the outside air or ground and pumping it inside. They can cut household carbon emissions by up to 70% compared to a gas boiler, and when paired with renewable electricity, they approach zero emissions. For years, governments on both sides of the Atlantic offered generous subsidies to offset the higher upfront cost — typically $5,000 to $10,000 in the U.S. via the Inflation Reduction Act, or up to €12,000 in parts of Europe.
And it worked. Between 2020 and 2022, heat pump sales in the EU jumped 40%. In the U.S., installations passed the 5 million mark. But then the political winds shifted. Budget deficits, inflation fears, and lobbying from fossil fuel interests pushed policymakers to tighten the purse strings. “Grant reductions were sold as fiscal prudence, but they were actually a gift to the gas industry,” says Dr. Sarah Jenkins, an energy policy analyst at the Center for Climate Integrity. “You pull the subsidy, and the market stops dead. We are seeing exactly that.”
Dr. Jenkins points to a recent analysis of 15 countries showing that for every 10% cut in grant value, sales fell by an average of 14%. “It’s a textbook price elasticity problem,” she says. “Heat pumps are still too expensive for most households without help. The government’s own climate advisors said they needed to maintain subsidies through 2035. They didn’t listen.”
A Sudden Slowdown With Long-Term Consequences
The stall comes at a critical juncture. The International Energy Agency’s net-zero pathway requires 600 million heat pumps to be installed globally by 2030. We’re at about 250 million now. At the current growth rate, we’ll miss that target by at least 40%. That means either other sectors — like transport or industry — must decarbonise even faster (unlikely), or we accept higher overall emissions.
And here’s the irony: while governments cut heat pump grants, they’re spending billions on disaster relief from the very climate extremes that heat pumps are designed to mitigate. “We’re throwing money at flooding and wildfires but defunding the one technology that could prevent the worst,” says Prof. Mark Thompson, head of building decarbonisation at Imperial College London. “It’s a massive disconnect.” Indeed, the recent revival of climate.gov by former NOAA staffers — a story we covered here — shows how desperate scientists are to keep climate data alive in the public sphere. But none of that data matters if the policy muscle to act is atrophying.
Prof. Thompson points to a deeper problem: the heating industry’s supply chain, which had ramped up production in response to the earlier demand surge, now faces overcapacity. “Manufacturers invested billions in new factories. If sales don’t pick up, they’ll scale back or mothball plants. That’s a multi-year setback.”
Why This Should Scare You
Look, heat pumps aren’t sexy. They don’t make headlines like a Category 5 hurricane or a 50°C day. But they are the single biggest lever we have to cut residential emissions — which account for 15-20% of total greenhouse gases in developed nations. Without aggressive heat pump deployment, the math on net zero simply doesn’t add up.
The political right often frames heat pumps as a green luxury. But in reality, they are a direct tool for energy independence and lower bills. A well-installed heat pump can save a typical UK household £200-300 per year on heating costs compared to a gas boiler — even with the smaller grant. In cold climates like Scandinavia, they’ve been standard for decades. The technology works. The problem is purely a matter of upfront cost and political will.
And while we dither, the fossil fuel industry is exploiting the gap. In the UK, gas boiler sales actually increased 12% in the first half of 2024 as heat pump sales slumped. “We are actively going backwards,” warns Dr. Jenkins. “Every boiler sold today is a 15-year lock-in to gas. That’s 150 million tonnes of CO2 we’re baking in, globally.”
The situation echoes the early 2010s solar panel boom-bust cycle, when a sudden drop in government feed-in tariffs caused a wave of bankruptcies among European solar installers and stalled deployment for years. “We’ve been here before,” says Prof. Thompson. “The lesson is that policy consistency matters more than any single grant amount. Yo-yo subsidies destroy market confidence.”
What Happens Next
The pressure is now on governments to act. The Climate Action Monitor is calling for an immediate restoration of grant levels, a long-term price guarantee for installers, and a ban on new gas boiler installations in new homes by 2028. A handful of countries — notably Norway and the Netherlands — have managed to sustain growth through a mix of loans, property-tax incentives, and mandatory efficiency standards. But they are outliers.
“We need to stop treating heat pumps as a niche technology and start treating them like the essential infrastructure they are,” says Dr. Jenkins. “You don’t cut grants for water pipes or electricity grids. Why do it for heating?”
The next 12 months will be decisive. Major elections in the EU and (potentially) the U.S. could reshape subsidy landscapes. If the trend continues, we’re locking in higher emissions, higher energy bills, and a harder path to net zero. And almost no one is talking about it.
So the next time you see a story about a record-breaking heatwave or a wildfire, remember this: the most important climate battle isn’t always the one that makes the evening news. Sometimes it’s fought in the ductwork of a suburban house — and right now, we’re losing it.
Frequently Asked Questions
Why did heat pump sales slow down?
Sales slowed primarily because several countries, including the UK and Germany, reduced the value of government grants that subsidised the upfront cost of heat pumps. The UK slashed its Boiler Upgrade Scheme from £7,500 to £5,000, causing a 31% drop in installations. Without these grants, many households find the initial expense — typically £7,000–£13,000 for equipment and installation — too high, even though heat pumps save money on energy bills over time.
How much do heat pumps cost without a grant?
The typical cost of an air-source heat pump installation in the UK ranges from £7,000 to £13,000, depending on property size and complexity. In the US, costs average between $4,000 and $8,000 for a ducted system, though ductless mini-splits can be cheaper. Without grants, these costs are often 2-3 times higher than a replacement gas boiler, making the upfront barrier the main obstacle to wider adoption.
Are heat pumps effective in cold climates?
Yes. Modern cold-climate heat pumps are designed to operate efficiently at temperatures as low as -15°C (5°F). Countries like Norway and Sweden have among the highest heat pump adoption rates in the world, despite harsh winters. Advances in inverter technology and variable-speed compressors mean today’s models can maintain indoor comfort even during extreme cold snaps, though their efficiency drops slightly below freezing.
