Germany faces the task of making the building sector climate-neutral by 2045. Currently, around 35% of total final energy consumption is accounted for by space heating. With approximately 5.6 million gas heating systems and a high dependence on fossil fuels, the sector is under pressure to transform. Heat pumps are considered a key technology in this context – both for new buildings and for existing ones.

Market data shows that sales exceeded those of gas heating systems for the first time in 2024, but growth is still stagnating compared to the ambitious climate targets. District heating also plays a role, but in many regions it is fossil-fuel-based (coal, natural gas) and also requires a decarbonization strategy.

Life cycle analysis: Heat pumps beat gas – even in difficult scenarios

RWTH Aachen University has published a comprehensive life cycle assessment in the journal Cell Reports Sustainability that compares the entire life cycle of air-to-water heat pumps and gas boilers.

Key findings:

• Worst-case scenario: unrenovated old building, 2019 electricity mix (40% renewable) → 48% CO₂ reduction compared to gas.
• Optimal scenario: improved building envelope, efficient heat pump, optimized storage technology, electricity mix according to ecoinvent forecasts → up to 91% CO₂ reduction.
• Status quo in 2025: thanks to a better electricity mix (almost 60% renewable energy share), an additional 20–25% savings compared to 2019.

Conclusion: Even under unfavorable conditions, significant emission reductions are possible – fossil fuel systems such as gas or oil are not improving, whereas heat pumps automatically benefit from the growing share of renewable energies.

Other environmental impacts and resource issues

The study evaluates 16 environmental categories:

• Positive: Significant advantages in terms of climate protection, lower air pollutants, less use of fossil raw materials.
• Neutral to negative: Higher copper requirements (category “Resources”), production energy consumption, refrigerants.
• Future prospects: With the increasing use of natural refrigerants (e.g., R-290/propane) and recycling strategies, these impacts will also decrease.
• Important point: The climate change category is clearly the top priority—other environmental impacts are less critical, especially when addressed through technological development.

District heating comparison: potential and restrictions

District heating can be a lever for the heat transition in densely populated areas – however, over 50% of German district heating currently comes from fossil fuels (gas, coal).

• Switching to renewable sources (large heat pumps, solar thermal energy, waste heat) is technically possible, but capital-intensive.
• Decentralized heat pump solutions offer a direct and faster path to decarbonization in regions without low-emission district heating supplies.

Economic assessment

Recent research findings, including MIT studies, show that

• electrifying 80% of heating systems with heat pumps not only reduces CO₂ emissions, but also lowers system costs (grid, operation, primary energy imports) in the long term.
• Heat pumps can be cheaper to operate than gas heating systems, especially with dynamic electricity tariffs.

Political recommendation from the RWTH study: reduce electricity tax, increase gas tax → greater economic efficiency and faster market penetration.

Recommendations for action – the key to ramping up the heat pump market

With targeted technology development, intelligent business models, and appropriate political framework conditions, heat pumps can clearly outperform fossil fuel heating systems not only ecologically but also economically. Here's how to move forward in a targeted manner:

1. Further develop technology

• High-temperature and large-scale heat pumps for existing buildings and district heating.
• Use of natural refrigerants (propane, CO₂).
• AI-optimized operation to increase efficiency.

2. Adapt political framework conditions

• Reduce electricity costs, increase the price of fossil fuels.
• Shift subsidies to operating cost advantages instead of just investments.
• Anchor ESG-compliant standards in EU taxonomy.

3. Accelerate implementation

• Standardized plug-and-play modules.
• Expansion of skilled worker and training programs.
• Digital building models for preliminary planning.

4. Scale business models

• Heat-as-a-service without CapEx for owners.
• Contracting with guaranteed efficiency class.
• Neighborhood solutions to reduce costs.

5. Strengthen investor communication

• Clear profitability and ESG reports.
• Best practice projects as references.
• Presence at relevant trade and investor events.

Heat pumps are clearly superior

The scientific evidence is clear: heat pumps are superior to fossil fuel heating systems in almost all relevant environmental and climate categories—even under difficult operating conditions. Technological advances, a greener electricity mix, and innovative business models will further reinforce these advantages in the coming years.