The EU is only €70bn ($81.2bn) worth of subsidies away from making renewable heat (heat pumps and solar thermal) affordable for all households, says a report from the environmental NGO coalition EU Cool Products. In comparison, total EU defence expenditure in 2019 stood at €186bn.

A 3D image of a house with thermal solar heating. (Photo by Costazzurra via

Only 17.3% of heating appliances in European homes are powered by electricity, via heat pumps. One of the main barriers to their adoption is their high upfront installation cost, the report says.

A total of 19 out of 27 EU member states do not allocate enough subsidies for families to overcome these costs, or disproportionately tax electricity, the report says.

For a middle-income family of four, only Austria, Cyprus, Finland, France, Italy, Malta, Portugal and Spain offered sufficient subsidies for heat pumps to ensure a payback time of eight years or less. Increasing total renewable heat subsidies by €70bn would enable all EU households to make the switch to renewable heating. This could be reduced to €20bn if a carbon tax of €100 a tonne was introduced.

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By GlobalData

The only impediment to mass renewable heat deployment is political will, the report adds, calling for a ban on the sale of gas boilers in the EU by 2025. The European Commission is so far opting for a gradual phase-out instead.