The European Commission has presented measures to address the high upfront costs that continue to limit household investment in heat pumps. The Electrification Action Plan introduces social leasing schemes, allowing users to pay a monthly fee instead of covering the full purchase and installation cost. Combined with subsidies, favourable loans and on‑bill financing, these mechanisms can expand access to clean heating and cooling solutions in buildings.

The Plan encourages Member States to use the Social Climate Fund to support such schemes and to apply lower VAT rates to heat pumps than to gas boilers. At present, only Belgium, France, Ireland and the United Kingdom apply reduced VAT rates to heat pumps.

Lowering upfront costs is identified as a key driver for accelerating heat pump deployment. Together with more competitive electricity prices relative to gas, the measures set out in the Electrification Action Plan aim to broaden access to clean heating and cooling while reducing reliance on imported fossil fuels.