Building conversations up with... Thomas Nowak, Vice President Government Relations and Public Affairs at Qvantum International.
Thomas Nowak is a distinguished leader in Europe’s sustainable heating and cooling sector, with more than two decades of experience spanning industry associations, innovative clean energy companies, and academic institutions. His career includes Vice President Government Relations and Public Affairs at Qvantum Industries AB, nearly two decades of executive management at the European Heat Pump Association (EHPA), and earlier roles in renewable energy entrepreneurship, research, and solar photovoltaic project development.
He is widely recognised for his pivotal contributions to the expansion of the European heat pump market, his ability to forge strong alliances between policymakers and industry, and his long-standing commitment to the decarbonisation of buildings and energy systems.
He was recently awarded the Ritter von Rittinger Prize by the IEA Heat Pump Technology Collaboration Programme, recognising his contribution to establishing heat pumps in EU policy and driving market development.
BUILD UP (BUP): Approximately 200 million EU citizens live in multi-family buildings, many of which are affected by energy poverty and underperformance. What are the primary technical and structural challenges encountered when installing heat pumps in multi-family buildings compared to single-family homes? Furthermore, what viable solutions exist for buildings where space heating and/or domestic hot water (DHW) systems are currently decentralised and autonomous?
THOMAS NOWAK (TN): Multi-family buildings are typically heated using one of 5 solutions:
These heating options are combined with hot water solutions and – where needed – air conditioning. Hot water can either be provided by the same technology or separately by instantaneous gas/electric boilers. Thermal storage tanks are added where needed, often connected to freshwater stations to avoid the legionella risk. Heat pump solutions do exist for each of these alternatives; in fact, a reversible air conditioning unit is already a heat pump.
Decarbonising the heating system faces several challenges, starting with the decision-making process, which depends on ownership and majority rules. It is closely followed by the need for financing, connected to the availability of subsidies. Once the owner/owners consider a boiler change, they typically assess the building and need to answer questions like:
These questions feed into a technical study, which leads to a presentation of available alternatives. Depending on the current situation and future renovation plans, existing boilers can be replaced by large heat pumps, to be installed inside the building or in outdoor containers. Decentralised boilers can be replaced with exhaust air heat pumps, apartment-based booster heat pumps in combination with ambient temperature thermal loops or air conditioning units. Hot water can be generated with the same system or through a separate domestic hot water heat pump.
All solutions exist today. The final choice depends on the existing solution and the willingness/plans to change, available finance and the ability to reach a final decision. Available planners and installers, or the need for permits, may delay the process.
BUP: One of the most innovative systems emerging on the market is the 'building ambient loop,' which pairs a centralised thermal network with individual, decentralised heat pumps in each apartment. From a property management and billing perspective, how does this specific technical architecture help overcome the traditional 'split-incentive' problem between landlords and tenants?
TN: Today, several million apartments with decentralised gas boilers exist, and not all of them can be replaced by central systems. Here, ambient temperature thermal networks in combination with booster heat pumps are an emerging solution. They consist of three parts: a heat pump and a thermal storage tank per apartment (think of a fridge), a thermal network operating at ambient temperature level (think of two additional water mains pipes), and a thermal energy source, which can be a dedicated heat pump, a waste heat source or the return flow of a district energy system. It can also be a dedicated thermal loop connecting many heat sources and heat consumers in the area. A heating and hot water heat pump can replace the existing gas boiler and allow existing radiators to be retained, as modern heat pumps can provide 70° to 75°C where required. Cooling can be provided with additional hardware.
Modern and connected heat pumps help ensure indoor environmental quality and thermal comfort. Access to monitoring data enables the owner/building manager to avoid dissatisfied tenants by ensuring the agreed-upon temperature levels. Failing components can be identified remotely, enabling faster and more accurate replacement. Electrified heating and lower system temperatures improve efficiency and reduce heating costs. Hot water provided at the point of use, including through freshwater stations, avoids costly distribution lines while protecting legionella.
With heat pumps providing flexible load to the grid, their deployment at apartment level allows the tenant to profit from dynamic electricity tariffs and to increase self-consumption from tenant PV systems or balcony solar.
Decarbonising apartment-based boilers through heat pumps connected to ambient loops does not immediately solve the traditional ‘split-incentive’ problem between a tenant who has to pay high heating costs and an owner who does not want to invest in better, more comfortable and renewable heating solutions. However, with legislation mandating the move away from fossil-based heating, this new solution improves tenant comfort, makes administration and maintenance easier and helps the building owner to be legally compliant.
BUP: The European heating and cooling landscape is shifting dramatically. The recast Energy Performance of Buildings Directive (EPBD) mandates a phase-out of fossil-fuel boilers by 2040 and bans subsidies for stand-alone fossil systems, while the upcoming ETS2 will introduce carbon pricing on heating fuels. How do you expect this rigorous regulatory shift to reshape the heat pump market, and what unexpected risks or bottlenecks might accompany these new market opportunities?
TN: The change in legislation gives a strong sign to building owners: don’t choose a new fossil boiler, and in case your ageing boiler fails, make the effort to replace it with a renewable, clean, modern solution. Depending on the country, bio-based fuels will still be available for a while, but if the electrification of heating is not happening fast, users must expect unpredictable price increases. While heat pumps are not the only solution for future heating, they are an available ‘no-regrets’ option, avoiding all the risks related to combustion boilers. Next to regulation, the dependency on fossil energy and the uncertain supply situation make people want to move away from it.
The result is an increase in demand. In Germany, one of the biggest heating markets, heat pumps have been the #1 heating solution since 2024, surpassing gas boilers. Overall, demand for heat pumps has returned to double-digit growth in the first quarter of 2026, according to recent data from the European Heat Pump Association (EHPA). This trend is expected to continue and even to accelerate if society switches the dominant energy carrier from fossil fuel to electricity.
The European and international heat pump industry has ample capacity to meet this demand, and at least in the short term, sufficient installer capacity should be available. However, continuous education will be essential to ensure planning and installer capacity for the future. In addition, the installation process must be shortened through process support, modular products and simplified commissioning and maintenance.
What could go wrong? An EU heat pump industry that relies on international trade will be affected by its disruption. The design of trade rules decides whether European manufacturers hold their home market. Domestic demand in turn depends on the strength of policy support. That support shows in a swift implementation of the Fit for 55 package, including the mentioned Energy Performance of Buildings Directive (EPBD) and ETS2. It shows in a market design that makes efficient electric heating and cooling economically more attractive, encouraging business models that drive both heat pump market development and the wider energy transition.
Often, the biggest bottleneck is the decision itself. Whether ownership is split across many parties or sits with a single housing company, the same logic stalls it: upfront heat pump investment is high, and for now, fossil boilers look cheaper on CAPEX alone. Shifting decision-makers to a total-cost-of-ownership view that reveals the real advantage of heat pumps over the system life will take effort, but it is what turns the decision.
BUP: A significant portion of Europe's existing multi-family housing stock relies on autonomous, apartment-level heating and DHW systems. In dense urban environments, these apartments frequently lack the physical space required for standard heat pumps and DHW storage tanks. Beyond converting the entire building to a centralised HVAC network - which often requires invasive and deep renovations - what localised or compact technological solutions are available to address this spatial constraint?
TN: For apartment-based heating and DHW, two solutions address the spatial constraint without the need to convert the whole building. The first is the apartment-based heat pump connected to an ambient loop (described above), but this requires installing the loop itself, which some building owners may not find acceptable.
The second solution avoids that entirely: an exhaust air heat pump extracts the energy from the indoor air in an apartment (heat recovery) and cools it down to as low as -18°C - the colder the discharged air, the more energy harvested (heat extraction). The effect is based on pure physics, and the extracted energy is considered renewable in the EU under the Renewable Energy Directive and counted in EU energy statistics.
Exhaust air heat pumps have been established solutions in the Nordics for decades and are yet another option for decarbonising Europe’s dense urban stock. They provide heating, ventilation and hot water in a single compact unit, comparable in footprint to a tall refrigerator. They can provide cooling where the distribution system allows. Exhaust air heat pumps connect to existing radiators, sit entirely inside the apartment, and require no shafts. Due to their low connection capacity, they can often use the existing electric panel without an upgrade. The trade-off is that performance depends on the ventilation air available, so the heat demand of a well-insulated apartment and the capacity of the unit must be matched at the planning stage. Where that fit is right, it removes the two things that usually block apartment-level retrofit: space and disruption to neighbours.
BUP: While heat pump advocacy often focuses on direct CO2 reductions, you have highlighted their capacity to act as 'virtual batteries' that offer vital demand-side flexibility to a grid increasingly reliant on variable renewable energy. In your view, how should these systemic, secondary benefits be quantified or financially rewarded to make the economic case for building decarbonisation genuinely attractive to private investors?
TN: I am convinced that a 100% electrified system based on renewable energy is possible. It will be a vastly different system with distributed supply and demand. It is best compared to the shift we saw in data networks: we moved from a few central servers to the internet as we know it, with millions of nodes that can each supply or demand data.
If we apply this concept to our energy network and connect the electric and thermal grid, then we see prosumers emerging that generate and consume electricity and that can smartly use their thermal infrastructure to shift demand. The shifting of demand can be done by a heat pump or an immersion heater using the Joule effect. The energy is then stored either in the building core or a thermal storage tank, typically a water tank or a tank filled with wax, so-called ‘phase change material/PCM’. Deploying this function or even optimising operations for it requires a full system integration based on smart meters, dynamic electric tariffs and grid fees, but also simplified administration when adding storage to the grid.
The use of electricity should be rewarded, not punished, by additional taxes, levies or requirements. The details are dry: smart meters, dynamic electricity tariffs, dynamic grid fees, and new connection metrics. The key is to recognise flexibility for the balancing service it provides and the grid expansion it makes unnecessary, and then to let that value reach the people who create it. A private investor captures it directly through dynamic tariffs: shift consumption, pay less. A corporate investor can go further, building business models on grid fees and ancillary services, and passing a share back to the user. Either way, flexibility stops being an invisible system benefit and becomes something someone is paid for.
If we manage to create an integrated system, our society will use much less (final) energy in an efficient and emission-free way for heating and cooling, transport and industry. The physics is on our side; the technology is ready. The slowest component in the system is now the decision-making.
