IW Analysis: Heat Pump Becomes the Most Installed Heating Type in German Residential Buildings for the First Time in 2025

IW expert Ralph Henger spoke of a clear shift in the market. „Das ist eine echte Trendwende im Heizungskeller“, sagte Henger. „Wärmepumpen sind beim Heizungstausch inzwischen die erste Wahl. Die Geräte waren 2025 in deutschen Wohngebäuden erstmals die am häufigsten eingebaute Heizungsart.“ For 2026, Henger expects the heat pump to remain the number one in heating replacements and to expand its lead.

Installation Rates: Heat Pump Overtakes, Boiler Heaters Lose Ground

For boiler heaters, the installation rate fell from 3 to 1.4 percent. In total, 3.4 percent of owner-occupied households replaced their heating system. According to the experts, the installation rate fell compared to the previous year from about 5 to 3.4 percent. The share of new district heating connections remained low at 0.1 percent.

New Buildings: Three Quarters Heat with Heat Pumps

The trend is even more pronounced in new buildings. Almost three quarters (73.6 percent) of the approximately 58,900 residential buildings completed in 2025 are mainly heated with heat pumps, as the Federal Statistical Office announced in June. Within ten years, the share has more than doubled.

Operating Costs and Additional Benefits

Henger also pointed to the ongoing costs for homeowners. „Wer mit einer Wärmepumpe heize, zahle derzeit die niedrigsten Heizkosten“, erklärte er. In addition, most devices can also cool in summer, making a separate air conditioning system unnecessary.

Less Subsidies Until 2030

At the same time, state support for the switch to climate-friendly heating systems is declining. For the installation of heat pumps and other climate-friendly heating systems, there will be less state grants in the coming years. The maximum available investment cost subsidy for a heating replacement has so far been up to 21,000 euros of the so-called eligible costs. So far, a subsidy of up to 70 percent has been possible for the switch. By 2030, the amount is to be gradually reduced by several thousand euros.

The government justifies this also with austerity constraints. The IW experts see this as a possible brake on the already slowed replacement of old heating systems. The overall lower installation rate suggests that many homeowners may postpone investments in a new heating system.

Overall, the IW analysis paints the picture of a market in transition: heat pumps are establishing themselves as the standard for heating replacements, while classic boiler heaters are losing importance. Whether the momentum will continue until 2030 in view of declining subsidies depends, according to Henger, also on further cost developments and the reliability of the political framework conditions.