German Study Warns of Doubling Gas Heating Costs by 2040, Criticizes New Law

Cologne, Germany – Installing new gas heating systems could become nearly twice as expensive by 2040, according to a new study by the Institute of the German Economy (IW). The research, which has not yet been fully published, suggests that households might be making economically unsound decisions due to the government's recent reform of the heating law.

The study, obtained by the Rheinische Post newspaper, indicates that annual heating costs for a new gas boiler could nearly double. In contrast, installing a heat pump is projected to significantly reduce cost risks in the coming years, keeping heating expenses largely stable over the long term. For example, in partially renovated older buildings, a heat pump could save homeowners €1,000 or more annually compared to a gas heating system.

The IW researchers are critical of the revised heating law, which has already passed the Bundestag. They argue that the legislation introduces new uncertainties, potentially prompting households to invest in systems that may prove uneconomical or unsustainable in the long run. The German government's decision to allow the installation of gas and oil heating systems again, while gradually reducing subsidies for heat pumps until 2030, is a point of contention.

Government officials have cited budget constraints as a reason for the policy shift. Despite these financial pressures, the IW study highlights the potential long-term financial burden on consumers. The institute previously reported that heat pumps became the most commonly installed heating type in Germany in 2023, a trend they expect to continue.