Chris Goggin continues his review of the heating and hot water markets across the European landscape. This analysis of how commercial and domestic properties seek to provide heating and hot water can reveal the rate of introduction in terms of low carbon energies. Insights into the impact of Net Zero legislation can be made as can a preferred technology.
European heating and hot water provision for domestic and commercial properties is adapting to recent climate pledges introduced by the EU. The European block is mandated by law to reduce greenhouse gas emissions by 90% by 2040 and at least by 55% by 2030. The European Union is optimistic in achieving these targets.
France and Germany are predominant economies that rest inside of EU borders and will be the focus of this article. Both countries face the identical task of decarbonisation yet must travel entirely separate pathways to introduce clean energies and technologies.
French domestic energy policy is dictated by a decision to employ nuclear power. The Messmer Plan was a solution to the 1973 oil embargo which saw Arab countries refusing to export oil and gas to any country that supported Israel in the Yom Kippur war.
France was reliant on foreign exports of oil which accounted for over 70% of national power supply. The Messmer Plan was introduced in 1974 and has since been responsible for the construction of eighteen commercial nuclear power plants with fifty-six nuclear reactors.
France provides for a housing stock of around 38.2 million dwellings and although the predominant form of power relayed into domestic and commercial properties is nuclear powered electricity, other forms of power and technologies are being utilised to fuel commerce and domestic heating and hot water supply.
French use of domestic solar power is increasing steadily, including self-consumption capacity which accounts for 35% of new installations. Self-consumption refers to an energy source that is individually generated and not connected to a national grid. In 2024 France installed near to 240,000 solar systems domestic as well as C&I (commercial and industrial) systems, 33,000 more than the previous year 2023. At this moment, the French solar power market can be characterised as being diverse and robust.
However, 11.9 million households rely on gas boilers for DHW and heating whilst there is also a total stock of 4.3 million installed heat pumps. Throughout 2022 around 620,000 heat pumps were sold in France – a 16% increase from 2021.
However, the European heat pump market has entered a less productive phase. The IEA Global Energy Review 2025 reports of a decline in heat pump sales across Europe most notably in France and Germany. European sales are down 21% whilst French purchases have been estimated to have suffered a drop of 25%.
The contributing factors to this have been outlined as high electrical costs relative towards natural gas, political and regulatory uncertainty, and a slowdown in new construction projects, itself a reflection of global economic uncertainty.
France makes up one part of the three largest heat pump markets in Europe the other two being Italy and Germany. This article will now focus on Germany and revisit Italy later in this series of domestic and commercial DHW and building heat market analysis.
Recent German energy policy is based solely around the Russian invasion of Ukraine. Before Russia entered Ukraine, Germany imported a third of national oil, 45% of their coal and 55% of all gas from Russia. Since the invasion, Germany has resolved to diversify domestic energy options with the direct aim of strengthening national energy security.
This approach involves extracting clean renewable energy like wind and solar and introducing other alternative methods of distributing heat as well as hot water to domestic and commercial properties. These alternatives include heat pumps, district heating, biomass, and solar systems.
Germany maintains a residential housing stock of around forty million homes and an additional twenty-one million non-residential buildings. With such a vast number of properties that stretch across both rural and urban areas Germany has to offer multiple routes of clean and affordable power to customers. A primary route of domestic and commercial power is heating pumps.
Although Germany is one of the largest global heat pumps markets German heat pump sales are estimated to be 46% down in 2024, again due to economic and regulatory reasons. German heat pump sales in 2024 amounted to 193,000 compared to 356,000 purchased and installed in 2023.
As of 2022 there was a total heat pump stock of 1,674,000. Although numbers have not been officially released or statistically recorded basic additional mathematics reveals a total number of over two million active heat pump units across German business properties and dwellings. Per one thousand German inhabitants there are twenty installed heat pumps.
Germany is also in the process of phasing out nuclear power contradicting the position that France has taken whilst nineteen million households use a gas boiler for heating and hot water. Commercial and industrial premises are estimated to be responsible for 34% of natural gas use across Germany.
Meanwhile, German use of solar power has become a leading source of power for households and businesses. Germany leads Europe in total installed capacity of solar capacity and solar PV expansion in 2024. As of April 2025, Germany has installed over five million solar PV installations. Domiciles make up 38% of this statistic whilst 29% have been installed on commercial rooftops.
Germany’s other alternative means of heating arrives in the form of district heating. Germany has 6,000 operational district heating systems that amount to 25GW of capacity. District heating consists of a configuration of underfloor piping accessed by multiple buildings. These pipes are then heated using either steam or water which is itself produced by waste heat from power stations, industrial processes, biomass or by capturing heat from geothermal and solar resources.
Finally, biomass has become a recognised aspect of German heat and hot water provision. Statista have published official numbers of active German biomass plants from November 2024 – 15,868. Biomass refers to a facility that generates electricity through the burning of organic materials (waste from households, industry & organic matter) to produce steam. This steam powers a turbine that is connected to generators which then offers electricity.
Both Germany and France are legally bound to lessen emissions that emanate from households and commercial activities. Both countries have separate domestic energy policies that are resultant of individual national requirements. Each country is now pursuing decarbonising pathways that are solutions to the obstacles relevant to themselves only.
An umbrella approach to European carbon neutrality is not feasible due to differing populations sizes, building stock, geographical position, and geopolitical relationships. This is reflected in the entirely different approach adopted by both France and Germany.
Rinnai is continuing to provide UK contractors, consultants, specifiers, and installers with updated information on global energy issues. Doing so aims to equip all interested parties with knowledge that will provide a concise comprehension of international fuel options and approaches as well as an insight into potential future UK energy options and technologies.
