The European Heat Pump Association reports 1.16 million residential heat pumps sold across 12 European countries in the first half of the year, up from 1.05 million in H1 2025 — a 10.5% jump. The driver is not green idealism. It is arithmetic. The Iran war sent crude to $126 a barrel after Iran's de facto closure of the Strait of Hormuz, while several EU governments simultaneously cut electricity taxes. When the price ratio between electricity and gas narrows, heat pumps win on operating cost alone. The European Commission's electrification action plan, published shortly after the US-Israeli attacks on Iran on 28 February, laid the framework: electricity tax should be no higher than gas tax, and network charges should reward flexible demand technologies like heat pumps. Germany's subsidy scheme has already made heat pumps the number one heating technology being installed. The Netherlands and Belgium are moving on tax reform, with Belgium announcing changes for 2026 that will cut electricity costs by 3% and raise gas costs by 3%. The EHPA's data makes the inverse case just as clearly. Countries where electricity is taxed far more heavily than gas — the UK, Belgium, Romania — see slower heat pump adoption and deeper fossil fuel dependence. In the UK, electricity costs more than four times as much as gas. In Romania, the ratio is five to one. These are not technology problems. They are policy problems baked into the tax code. Paul Kenny, EHPA director general, put it bluntly: "Europe is ending its addiction to a toxic, costly drug from dodgy suppliers: gas." The framing is deliberate. The heat pump industry has argued for years that its technology is competitive wherever the electricity-to-gas price ratio is reasonable. The Iran war created the demand shock; the tax reforms are creating the structural shift. Separately, a two-year study by the London-based Centre for Net Zero found that UK homes with free solar panels and a battery saved £681 a year on average — a 62% reduction in annual electricity bills based on smart meter data. Great Britain recorded more new solar installations in H1 than in any six-month period since 2011, according to government figures published in July. The pattern is consistent across technologies: when the price signal aligns with the physics, adoption accelerates. Heat pumps transfer heat rather than generating it from combustion; they are 3-5 times more efficient per unit of energy input. The bottleneck was never the technology — it was a tax regime that subsidized the incumbent fuel by making its competitor artificially expensive. The question now is speed and durability. If governments lock in the tax changes, the shift becomes self-reinforcing as installation infrastructure scales and unit costs drop. If they treat the tax adjustments as temporary crisis measures and revert when oil prices stabilize, Europe will have wasted its best alignment of crisis incentive and policy window in a decade.
