Green energy in Denmark hits roadblock as heat pump sales plummet amidst falling gas prices and subsidy scheme criticism
Sales and installation of heat pumps, a green energy solution, have dramatically decreased in Denmark. Henrik Amby, co-owner of Aarhus-based company Novasolar, reports that his company is struggling to keep employees busy due to the downturn. The Danish government’s aim to phase out gas means heat pumps, which can replace oil and gas boilers, should play a key role in the country’s green transition. However, the sale of heat pumps has plummeted, with less than 2,500 air-to-water heat pumps sold in the first three months of 2024, compared to nearly 12,000 in the last quarter of 2022.
This decrease coincides with falling gas prices and rising inflation, which have affected the purchasing power of Danes. Criticism has also been directed at the government’s subsidy scheme, which opens a pool of funding on specific dates, allowing homeowners to apply for a subsidy of up to 27,000 kroner towards a heat pump. Critics argue that this “stop-and-go” system creates bottlenecks and hinders the green transition. They contend that the scheme should be available throughout the year, or replaced with a tax deduction system, to provide greater flexibility and predictability.
Henrik Amby of Novasolar observes the stop-and-go effect of the subsidy pool firsthand, explaining that the company experiences a surge in work whenever a new pool opens, followed by a lull. This pattern disrupts planning and scheduling.
While the Liberal Alliance party advocates for a tax deduction system, the Tax Minister Jeppe Bruus acknowledges the challenges posed by the subsidy scheme, but does not support changes to the system or the introduction of a tax deduction scheme. He points out the need to keep a close eye on public spending and argues that a tax deduction scheme would be a bad idea and an obstacle to the rollout of district heating projects.