Green home grants are failing to boost clean heating – new analysis

Many people in low-income countries cannot afford to buy clean heating systems. Meanwhile, ‘green’ subsidy schemes continue to promote climate-wrecking gas boilers, a new analysis shows.

A household in Bulgaria, Hungary, Poland, Portugal or Romania may take 10 years longer than one in France, Germany, Italy or the UK to recover the installation cost of a heat pump, and five years longer in the case of solar thermal systems, according to the latest analysis by the European Environmental Bureau (EEB) on behalf of the Coolproducts campaign.

The study finds that most people in low-income countries are still unable to afford clean heating systems, and identifies the initial investment required to buy this technology – around €10,000 for a heat pump and €5,000 for a solar thermal system – as one of the main reasons behind their slow uptake.

Click on the map to see how your country is doing

While all governments provide loans, grants, and tax reductions for the renovation of homes and the uptake of clean heating systems, their roll-out has been largely inadequate. “Not enough money is going to low-income households,” said Davide Sabbadin, a policy officer at the EEB responsible for the analysis. “This makes it impossible for most households in low-income countries to purchase this technology without significantly impacting their finances.”

Campaigners have also questioned the scope of most ‘green’ subsidy schemes across Europe, which are currently used to promote the installation of new fossil gas boilers, rather than heat pumps and solar thermal systems. As a result of inadequate state support, a gas boiler may now cost three times less than a heat pump despite posing one of the greatest challenges to achieving climate neutrality.

The analysis does not consider other reasons contributing to the slow uptake of clean heating, namely the huge amounts of fossil fuel subsidies which reduce the cost of gas heating and the slow insulation rates in some countries – both of which hinder the energy saving potential of renewables.

Ban fossil-fuel heaters before it’s too late

Given the climate impact of the sector, governments need to urgently shift subsidies away from gas boilers and towards clean solutions, said Mélissa Zill, a programme manager at ECOS, which co-leads the Coolproducts campaign.  

The heating and cooling sector is responsible for a third of the EU’s CO2 emissions, with gas boilers being the main source. The European Commission estimates that a 40% reduction in gas heating emissions is needed to achieve the EU’s 2030 climate targets.

But time is running out. In a recent study, ECOS found that a total phase-out of gas and oil boilers is needed by 2025 if Europe wants to achieve carbon neutrality by 2050. This would save 110 million tonnes of CO2 emissions each year through 2050, which amounts to two thirds of the total emissions reduction needed from residential and public buildings.

“We need to act fast to decarbonise the heating sector and subsidies are key to achieve this goal. If we continue selling fossil-fuel boilers beyond 2025, they will be used for decades to come, meaning that the EU will be at risk of missing its climate neutrality goal for 2050,” Zill said.

Facts and figures

  • A household in Eastern Europe may take eight to 15 years to offset the installation costs of a heat pump. In Western Europe, consumers may take less than two years to recover the costs for solar thermal installations, and less than four for a heat pump – see methodology below.
  • 24 countries allocate direct grants to support the installation of heat pumps, while five countries prefer tax reduction schemes, and nine countries give out loans.
  • 10 countries had more than one scheme in place.
  • 23 countries allocate direct grants to support the installation of solar thermal systems, while seven countries prefer tax reduction schemes, and nine countries give out loans.
  • Italy is the only country where the government subsidises the entire cost of a heat pump, provided that households meet certain conditions. However, the government also subsidises oil, gas, and LPG boilers.
  • Europe’s heat pump market increased by 19% in 2019, compared to the previous year. Nordic countries have the largest stocks per capita, while France and Italy lead in terms of sales growth overtime.  
  • The UK has made the uptake of heat pumps in British homes a central part of its efforts to achieve climate neutrality, planning a 20-fold increase from the current rate of 1%.