‘In the Netherlands we say that you’re a thief of your own wallet if you don’t choose a hybrid heat pump when you have to replace your old gas boiler,’ says Josja Roest, Executive Board Member of the Vereniging voor Duurzame Warmte (VDW), the Dutch Association for Sustainable Heat.

The Netherlands saw the number of installed heat pumps skyrocket by 80% between 2021 and 2023 as energy consumers were spurred on by record-high gas prices to phase out gas use in their households where possible. This was complemented by an attractive state subsidy scheme, which is still in place, offering buyers rebates covering around 30% of the purchase and installation costs of a new heat pump, with a minimum of €500. For those struggling to finance the remaining 70%, the government hands out low-interest loans of up to €28,000.

During the energy crisis, the Dutch government also ran a campaign urging residents to use as little gas as possible in a bid to cut down imports from, and therefore dependence on, Russia, in the aftermath of its invasion of Ukraine. The combination of high gas prices, a rush in heat pump installations and the awareness campaign had great impact, with Dutch gas demand falling by a quarter between 2021 and 2023.

In May 2023, the Dutch government introduced a mandatory minimum standard for new heating systems which would phase out gas boilers from 2026 and make hybrid heat pumps the new minimum norm. The target in place since the 2019 climate agreement is for all Dutch buildings to use sustainable heating and warm water by 2050, meaning all gas boilers will have to have been replaced.

All these elements combined to make the Netherlands one of the fastest-growing heat pump markets in Europe during the energy crisis. Manufacturers such as Remeha, Intergas and Nefit Bosch invested in scaling up Dutch heat pump production capacity as waiting times for consumers stretched beyond one year. In 2023, the Netherlands installed a record 154,000 heat pumps, according to Dutch New Energy Research.

‘In 2022, the prices of energy were so high that in many cases the people who had invested in solar panels before that managed to pay off their investments. In a way, they are now getting their home-produced electricity free of charge, and this is important when investing in a heat pump,’ says Hrvoje Medarac, Head of Research at Dutch New Energy Research. With around one-third of Dutch homeowners using their own solar panels, installing a heat pump that runs off electricity produced by these panels is an economically attractive business case.

What changed in 2024?
However, the tides turned on the Dutch heat pump market in 2024. Energy prices stabilised and a right-leaning government took power and rowed back on some of the previous government’s green energy commitments.

It has since scrapped the 2026 gas boiler replacement standard, it nearly halved subsidy payments for small heat pumps as of 1 January 2025 and it has decided to put an end to the Netherlands’ net metering scheme which compensates producers of household solar power for feeding energy back into the electricity grid. The latter has an impact on the economic attractiveness of the combined use of household solar panels and a heat pump, as consumers will no longer be able to offset high solar power production in the summer with high heat pump power use in the winter.

‘In comparison to 2023, 2024 was a very, very bad year for heat pumps,’ comments Josja Roest from VDW. ‘The main reason was the low gas price but also the new government, which is not a green government, made people doubt whether to go for a decarbonised heating solution. Lots of people chose to install conventional boilers. In 2024, 450,000 gas boilers were sold, compared to 300,000 in 2023, that’s a 50% increase.’

The tides turned on the Dutch heat pump market in 2024. Energy prices stabilised and a right-leaning government took power and rowed back on some of the previous government’s green energy commitments.
 

Despite the current dip in heat pump demand in the Netherlands, experts agree on their future need to fulfill the Netherlands’ – and Europe’s – long-term zero carbon ambitions. In order to reach its interim 2030 target on the way to having gas-free heating by 2050, the Netherlands needs to find alternative, sustainable heating sources by then for 1.5 million homes.

‘I expect that by 2050, the vast majority of the Dutch households will have a heat pump. The hype has died down a bit, but it’s very likely that the consumer prices of natural gas will rise over the next few years due to the implementation of ETS2 and the blending obligation for biomethane,’ says Sanne de Boer, Senior Energy Transition Specialist at Rabobank, referring initially to the new European emissions trading scheme.

The ETS2, the EU’s new carbon pricing scheme for road and heating fuels, will come into force in 2027 and will make carbon emissions in the upstream sector more expensive, which analysts expect will push up the price of gas.

From January 2026, the Netherlands will introduce a mandatory blending percentage of biomethane into the Dutch gas grid in order to stimulate production of green gas, which is typically more costly to produce than conventional gas.

Analysts at Dutch New Energy Research forecast around 1.3 million heat pumps will have been installed by 2030, with annual sales reaching around 125,000 by then. Although this would mean a return to a growth in annual sales compared with current levels, this forecast is well below the 385,000 of yearly installations in heat pumps needed by 2030 in order to meet Dutch net zero goals, the analysts say.

How do heat pumps solve energy security requirements?
The Netherlands, as well as most of the EU’s member states, are also continuing to pursue greater energy independence, a need made abundantly clear during the recent energy crisis.

‘The only energy security play in town is the switch from currently fossil-based heating to heat pumps. There is no other solution that gives you energy security, and in a world where security has become one of the most – if not the most important – thing, you need to be investing in economic defense as well as energy security,’ says Paul Kenny, Director General of the European Heat Pump Association.

Next to shifting energy use from fossil-based gas to electricity, relying on heat pumps to meet the Netherlands’, and Europe’s, heating needs also reduces the total amount of energy consumed. In the Dutch market, hybrid heat pumps have been the most commonly-sold type, which largely use electricity for heating services but also rely on back-up gas supply mainly for hot water needs. Although the reserve gas supply option makes hybrid heat pumps a less sustainable option, they have enabled the heat pump roll-out in the Netherlands, whose energy economy was until a few years ago largely built on the huge low-cost gas supplies of the onshore Groningen gas field. A gas stopgap also allows consumers to fall back on gas supplies in the case of electricity prices spiking.

‘Heat pumps are very energy-efficient and environmentally friendly. They obtain about three quarters of their energy for free from the environment and are suitable for most buildings. With hybrid solutions, homeowners save up to 70% on their gas consumption and primarily use the gas boiler for their domestic hot water and the heat pump for the space heating,’ comments Jeroen Verweij, General Manager Netherlands at Vaillant Group.

In the Netherlands, district heating has been touted as another sustainable alternative to gas heating, alongside heat pumps. Since 2018, Dutch newbuild houses are banned from installing gas heating, meaning that in many newbuild neighbourhoods, shared district heating networks have been installed successfully. But in much of the densely-populated Netherlands’ existing housing, laying underground heating networks is not a cost-efficient option.

The city of Amsterdam, for example, earlier this year decided to put plans for a district heating network on ice due to cost concerns. Instead, it concluded that heat pumps were a faster and cheaper option for sustainable heating for around 110,000 households in the city.

As using fossil fuels is set to become even more costly, while prices for renewable electricity are falling, consumers will be increasingly incentivised by market factors to make the switch to a heat pump. Although the heat pump market is currently stagnating, the long-term outlook remains positive.

‘We expect hybrid heat pumps to grow quite big, we are expecting a real uptick in hybrid heat pumps in the coming five years,’ says VDW’s Roest.

• Further reading: ‘What’s needed for European heat pump progress?’. Although the UK is lagging behind, overall, the European heat pump sector is poised to move the continent away from dependence on fossil fuels for heating. However, to meet climate targets, an acceleration programme is needed to double the number of installed pumps each year, says Jozefien Vanbecelaere, Head of EU Affairs at the European Heat Pump Association (EHPA).
• Most people think we should reduce the amount of energy it takes to heat our homes. However, most UK homeowners have never quite got round to tackling the issue. What’s it going to take for UK homeowners to improve energy efficiency?