Heat pump costs in Germany are almost twice as high as in the UK. According to a study by Octopus Energy and RWTH Aachen University, an 8kW air-water heat pump costs around €28,000 in Germany compared to around €14,000 in the UK.
The price difference is due to higher technical requirements, different incentive structures, taxation differences and complex installation processes. Systems in Germany often include expensive components such as defrost buffers and additional heating elements. Safety technology requirements are also higher. The installation of quieter and therefore heavier systems requires complex foundations. In addition, higher flow temperatures are needed in Germany due to lower outside temperatures.
Taxation and incentives also affect costs. In the UK, heat pumps are exempt from VAT, while in Germany they are taxed at 19%. The UK offers fixed incentives, while in Germany incentives are given on a percentage basis.
Bastian Gierull, CEO of Octopus Energy Germany, says that heat pumps are expensive in Germany due to unnecessary bureaucratic hurdles and emphasizes that taxes should be reduced and incentives simplified to reduce costs.