(Bloomberg) -- Heat pump sales in Europe fell last year for the first time in a decade, driven by falling natural gas prices, high interest rates and a political backlash against green policies. 

Sales across 14 countries, representing 90% of the European market, fell by 5% in 2023 compared with 2022, the European Heat Pump Association said, putting jobs at risk and threatening the industry’s ability to invest.

“After 10 years of sales increase, a decrease of 5% is really remarkable” said Jozefien Vanbecelaere, head of EU affairs at the European Heat Pump Association. “This decrease of 5% is not just numbers, not just something theoretical, but it has actually concrete consequences for our markets and the manufacturers.”

The drop follows a record rise in sales of 37% in 2022 after Russia’s invasion of Ukraine led gas prices to spike. Around 2.6 million heat pumps were sold in 2023 across 14 European countries, down from about 2.8 million units in 2022. 

Several European governments have introduced policies to encourage the installation of heat pumps, and last year’s reversal could have been driven in part by backlash against some of these ambitious strategies, said Vanbecelaere.

In Germany, courts blocked a program of subsidies that would have funded the heat pump rollout and the government was forced to water down plans to require new heating systems to be mostly powered by renewables from January this year.  “It became something very political, very highly debated, and it got a lot of backlash,” said Vanbecelaere. 

Heat pump companies said a lack of clarity around policy threatened plans to invest in training and new technologies. “The whole value chain will react in terms of expectations and plans for the next five years. So the industry and the supply chain and the whole value chain will have to shrink,” said Rowena Rodrigues, director of external relations at Glen Dimplex, a manufacturer. 

©2024 Bloomberg L.P.