Source: BMWK, Inderes

According to data from Germany's Federal Ministry for Economic Affairs and Climate Action (BMWK), applications for heat pump subsidies in Germany totaled 21,342 in January 2026. This represents a significant 49% increase compared to January 2025, although it is a sequential decrease that follows the typical seasonal pattern. In our view, today’s data offers a slight counterbalance to the recent negative headlines, indicating that underlying demand momentum in Germany, one of NIBE’s key markets, remains intact.

Data confirms recovery momentum

In our view, the January figures confirm that the German heat pump market was entering 2026 with strong recovery momentum. The 49% year-on-year growth supports the narrative that consumer interest in transitioning to renewable heating solutions was building up, driven by the regulatory framework and available subsidies. While the month-on-month decline from December is sharp, it is important to note that subsidy applications typically follow a seasonal pattern where the number of applications is higher at the end of the year ahead of the cold winter months, which explains the sequential decrease.

Despite the positive January data, the market's focus remains on the recent news that Germany's coalition parties have agreed to repeal key parts of the contentious heating law, specifically the requirement for new heating systems to use at least 65% renewable energy. As we noted yesterday, this policy reversal increases the medium-term risk profile for NIBE’s Climate Solutions business area, as it reduces the regulatory pressure on households to switch from traditional boilers to heat pumps. However, to our understanding, current government subsidies for heat pumps will continue during a transition period with funding secured until at least 2029. Nevertheless, the policy shift likely means that the country's phase-out of oil and gas will proceed at a slower pace.