Germany heat pumps overtake gas boilers as most installed heating system

A 2025 analysis by the Institute of the German Economy (IW) shows heat pumps became the most frequently installed heating technology in German dwellings, surpassing fossil‑fuel boilers for the first time. About 3.4 % of owner‑occupied households replaced their heating system that year, with 1.9 % opting for a heat pump, while boiler installations fell to 1.4 %. In newly built homes, 73.6 % of the roughly 58,900 completions in 2025 relied mainly on heat pumps, more than doubling the share within a decade.

IW expert Ralph Henger called the trend a “real turnaround in the heating cellar,” citing lower operating costs and the dual heating‑cooling capability of many units. He expects heat pumps to remain the leading choice through 2026 and beyond.

Government support is changing. The current subsidy programme, which can cover up to €21,000 of installation costs, is set to be gradually reduced, with lower caps and stricter income‑based criteria phasing in through 2030. A new online calculator from the Bund der Energieverbraucher illustrates the shifting payouts. The abrupt policy shift has caused uncertainty among installers and consumers, described by industry representative Alexander Beer as “a short‑notice decision that many were caught cold by.”