EU Heat Pump Market Rebounds in 2026 with Updated Subsidy & EU Energy Policies

European heat pump market bounces back remarkably in Q1 2026 after years of fluctuation, latest data from European Heat Pump Association(EHPA) revealed. Total sales of main 11 European nations hit 575,000 units in the first quarter, rising by 17% year-on-year; UK domestic heat pump sales soared 27% in 2025, while reversible heating&cooling heat pumps occupy over 70% order share in Southern Europe (Italy, Spain), thanks to frequent extreme high temperature.

The EU officially rolled out AccelerateEU decarbonization plan in May 2026, setting a clear target to lift annual EU heat pump output from 2.4 million to 4 million units by 2030. Uniform preferential VAT rules for heat pumps will be carried out across all EU territories, together with updated Ecodesign standards: minimum COP≥3.2 for all heat pumps sold from 2026, and COP threshold upgrades to 4.5 starting from 2027, pushing low-GWP R290/R32 refrigerant products to dominate mainstream market.

National subsidy policies keep attracting homeowners to replace old gas boilers:

Germany: Max subsidy up to €10,500 for residential air source heat pump installation; ground source & industrial high-temperature heat pump top grant reaches €15,000;

Ireland raises heat pump subsidy to €12,500 in early 2026, end users only need to pay around €1,030 after subsidy, becoming the most cost-effective installation market in Europe;

Italy offers up to 110% tax rebate for home heat pump renovation, Spain provides maximum €5,000 single-household allowance.

Fluctuating natural gas price further accelerates fossil fuel heating phase-out, China-made air source heat pump export to Europe jumps 71% in April 2026, R290 natural refrigerant household & commercial heat pumps become top trending items for European distributors.

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R290 air to water heat pump