Crisis hits the heating sector market - Industry grapples with heat supply disturbances
The future of Germany's Building Energy Act, colloquially known as the Heating Act, is marked by significant change. The government has announced plans to abolish the current Act and replace it with a fundamentally amended German Buildings Energy Act (GEG). This new Act will be more technologically open, flexible, and simpler, aligning with Germany’s climate goals and the realities of the heating market crisis.
The German Heating Act, introduced by the previous government, has been controversial and is set to be abolished. The new GEG will primarily focus on achieving CO2 avoidance rather than prescribing specific heating technologies. This shift aims to encourage flexibility and innovation in the industry.
Despite political debates, including criticism from the Christian Democrats that the Heating Act was too restrictive, the new coalition has committed to passing a "new Building Act," signaling continuity with improvements rather than a complete overhaul. Heating industry stakeholders, however, have cautioned against rapid changes, preferring regulatory stability after recently adapting to the existing framework.
The heating market is already shifting significantly due to policy and market forces. In the first half of 2025, heat pump sales surpassed gas boilers for the first time in Germany, reflecting the impact of regulations favoring renewable and low-carbon heating solutions.
The Federal Association of the German Heating Industry likely views the upcoming changes with cautious optimism, appreciating the enhanced technology openness and flexibility. The current crisis in the heating market, with rising costs and supply uncertainties, requires adaptable and sustainable solutions.
Local efforts, such as Mannheim’s goal to phase out its gas grid by 2035, demonstrate practical moves towards decarbonized heating markets aligned with these national policy shifts. However, these efforts face challenges due to government policy uncertainties.
The new Building Energy Act, which came into force in 2024, aims for more climate protection in the building sector by gradually replacing oil and gas heaters. The manufacturers have already taken measures and used all options for consolidation. If the pressure increases, further measures could be considered. Companies have significantly invested in heat pump capacities in recent years.
Detailed regulations on requirements for climate-friendly heaters are criticized. The heating market in Germany is currently experiencing a crisis, with sales of heating units decreasing by 22% in the first half of the year, reaching 296,500 units. The BDH expects a yearly sale of around 250,000 heat pumps this year, which is half of the politically targeted goal.
Heat pumps saw an increase of 55% to 139,500 units. The Federal Association of the German Heating Industry described the sales figures as dramatic. Sales of gas heaters decreased by 41% to 132,500 units. A state subsidy of up to 70% is possible when switching to a climate-friendly heater, with a maximum investment cost subsidy for heater exchange set at 21,000 euros.
Markus Staudt, the CEO of BDH, stated that the framework conditions would need to be significantly improved by political measures to achieve the heat pump targets. The coalition agreement of CDU, CSU, and SPD states that the Heating Act will be abolished, but the specifics are unclear.
Despite the uncertainty, one thing is clear: the future of Germany's heating sector is moving towards a more sustainable and technologically advanced direction. Consumers should keep an eye on the developments and consider the benefits of investing in climate-friendly heating solutions.
- The Federal Association of the German Heating Industry may view the upcoming changes in the German Buildings Energy Act (GEG) with cautious optimism, given the increased technology openness and flexibility it promises.
- With the new GEG focusing on CO2 avoidance rather than prescribing specific heating technologies, the heating industry is likely to see a shift towards innovation and flexibility in alignment with the industry's needs and the nation's climate goals.
- The current crisis in the heating market, characterized by rising costs and supply uncertainties, necessitates adaptable and sustainable solutions, with a potential solution being the increased investment in heat pump capacities as an alternative to gas heaters.
