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Comparing the future of the German and UK heating markets

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Stephen Harkin

Tuesday, 15 April 2014

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Earlier this year, 70 specialists from Europe's leading heating industry and utility companies joined a webinar to discuss the future of the German and UK heating markets. ( To access the slide set for this webinar, or to download the recording, click here and scroll down) .

To a backdrop of a transforming European home energy market (read more on the challenge for utilities here), we addressed two fundamental questions using the Pathways Tool and Roadmap Service (Germany & UK editions):

1. How do the German and UK heating markets compare today?

2. How will the two heating markets change to 2025?

Q1. How do the German and UK heating markets compare today?

While Germany and the UK are similar in terms of being two of Europe’s largest heating markets and in the dominant role gas boilers play within each market – this is where the similarity ends.

Annual sales of heating appliances in the UK and German markets, broken down by gas boilers, oil boilers, electric heating and low carbon technologies

In Germany, there is already a relatively high penetration of low carbon heating appliance sales – around 20% of annual sales (130,000 units). And there is a broad range of appliances being adopted – air source heat pumps (ASHP), ground source heat pumps (GSHP), biomass and ‘gas boiler plus solar thermal’ share the majority of these sales.

A key driver for this is policy (building regulations and the EEWärmeG), which is forcing the adoption of lower carbon heating solutions in newly built properties (ASHPs or biomass boilers are now the standard solution for new build homes without a gas connection). Other drivers include the high residential energy prices resulting in high energy bills and the fact that German homeowners have higher awareness and willingness to pay for low carbon heating systems.

In the UK, the story is very different with much more emphasis on ‘low cost’ heating solutions. Despite having a heating market that’s more than double the size of Germany’s, the penetration of low carbon technologies is much lower. Higher cost, low carbon technologies are usually only adopted by the UK’s wealthy innovators with the result that only 2% of annual heating appliance sales can be classed as ‘low carbon’.

The range of technologies adopted is also more limited than in Germany. ASHPs dominate annual sales, driven primarily by building regulations forcing adoption in new builds (especially in social housing), and by the promise of the renewable heat incentive.

Q2. How will the two heating markets change to 2025?

SHARES OF ANNUAL HEATING APPLIANCE SALES IN GERMANY & THE UK TO 2025

By 2025, we expect the share of low carbon appliances to grow to around 40% in Germany, with conventional appliance sales falling by around 130,000 units per year. Gas boilers will take the biggest hit. And a number of technologies will be competing for a share of these sales. We have identified five key technologies that will dominate this growth.

In the UK, we also see significant growth but from a much lower starting point. By 2025, we expect low carbon technologies to account for just under a third of annual heating appliance sales – around 400,000 units per year. Much of this will be low carbon gas technologies (hybrids, micro-CHP, gas heat pumps) or electric technologies, displacing gas boiler replacements. In the UK, we also see oil boiler sales almost disappearing by 2025 – being displaced mainly by electric technologies or by low carbon, high efficiency oil appliances.

To access the slide set for this webinar, or to download the recording, click here.

How similar is this story in other European markets?

The movement of European heating markets away from conventional heating systems is uniform – but the differences between markets is unique and varied.

Next in this webinar series, we compare the Dutch and French heating markets, and ask how these two major markets evolve differently out to 2025. To register an interest in this webinar, please email info@delta-ee.com. Places are limited.

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About the author

Stephen Harkin

Stephen developed and manages Delta-ee's Pathways Tool and Roadmap Service and leads our ongoing research in this field - forecasting the future of domestic heating in different European countries. He also developed Delta-ee's Microgeneration Insight Service which includes customer research and microgeneration uptake forecasts for the UK. Since joining Delta-ee in June 2008, Stephen has managed a wide range of client assignments including topics such as solar PV, smart home energy management systems, fuel cell micro-CHP, electric vehicle recharging infrastructure and heat pumps. Stephen completed an MSc in Sustainable Energy Systems and a BSc in Mathematics at the University of Edinburgh.