Heating Solutions: Heat Pumps Trail Traditional Fossil Fuels in Market for Replacement
The Focus Report Heat and Housing 2024, a comprehensive study conducted by researchers from the Potsdam Institute for Climate Impact Research (PIK) and other partner institutions, has shed light on the crucial role of addressing cost burdens in securing long-term societal acceptance for climate policy measures.
The report, titled "Focus Report Heat and Housing 2024: Central Results from the Ariadne Heat & Housing Panel", was based on a survey of 15,000 households in Germany in the fall of 2024. It revealed that the level of heating cost burden significantly influences support for the CO2 price.
The study found that on average, gas heating has an average heating cost of 16.90 euros, while district heating has an average cost of 20.60 euros. Interestingly, low-income households have a higher heating cost burden, averaging 20 euros per square meter per year, compared to high-income households with around 16 euros.
Heat pumps, considered a key technology for the energy transition, are shown to have lower heating costs. On average, households using a heat pump pay 13.80 euros per square meter and year. Notably, heat pumps accounted for 65 percent of renewable heating energy in new buildings in 2023.
However, the lower costs are partly due to the fact that heat pumps can only be used economically in buildings with higher energy efficiency and improved thermal insulation. The report also noted that the rate of heating modernizations in the building stock declined after a temporary peak in 2022, and the rate of energy renovations of building envelopes remains below the 2010 target of 2 percent per year.
Subjective perception makes a difference in support for the CO2 levy. Around 13% of those who spend relatively little of their income on heating costs still feel burdened. Fewer than half of them support the CO2 levy, while households with a higher heating cost burden relative to income tend to reject it. Support is particularly high among households with lower cost burdens, such as owners of heat pumps (51%).
The authors of the report include Kathrin Kaestner, Anton Knoche, Jan Buchel, Andreas Gerster, Manuel Frondel, Ralph Henger, Martina Milcetic, Christian Oberst, Michael Pahle, Antonia Schwarz, and Puja Singhal. The report can be read online and downloaded as a PDF.
The results of the study underscore the importance of addressing existing barriers and perceived and actual cost burdens to ensure broad support for climate policy measures such as energy renovations and the replacement of old heating systems.
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