For the building sector to become climate-neutral, a heat transition is needed. The heat transition comprises three key areas of action: Renovating existing buildings to make them more energy-efficient, phasing out oil and gas boilers, and expanding and decarbonising heating networks. One technology plays a key role, the heat pump. In the future, it is expected to replace many of the oil and gas boilers currently in operation - unless a heating network is already in operation on site. Numerous studies highlight the need for a steep market ramp-up of heat pumps to achieve climate targets. This requires, however, that the pace of expansion is significantly accelerated. The existing funding instruments alone will not be able to unleash the necessary momentum: accompanying regulatory measures are needed.
In March 2022, the German government decided that new heating systems must be operated with at least 65 per cent renewable energies from 1 January 2024. The so-called “65 per cent requirement” applies to new buildings as well as heating systems in existing buildings. This study analyses the role of electric heat pumps in implementing the 65 per cent requirement and the associated market ramp-up.