The Danish government has taken a significant step towards accelerating the green transition. The Folketing (Danish Parliament) has decided to encourage more people to replace their old gas or oil heaters with heat pumps. Until 2023, Danes could apply for subsidies for this transition through the Building Pool (Bygningspulje), but this program has now been closed. From September 2023, Danes can apply for subsidies through the new Varmepumpepuljen.

The Structure of the Varmepumpepuljen

The details of the upcoming Varmepumpepuljen have been revealed. A regulation on subsidies for heat pumps is now freely available on lovtidende.dk. The regulation stipulates that future support will be available for new air-to-water heat pumps and geothermal heat. The conditions include that you do not have access to (planned) district heating, and your upcoming heat pump must be A++ or A+++ rated.

Like the old Building Pool, you cannot get a subsidy for a new heat pump for the summer house, but only for year-round residences. You must apply through an application portal, which will be set up on the Energy Agency’s website and on statens-tilskudspuljer.dk. The application portal will be launched in September 2023.

Subsidy Rates

The subsidy rates according to the regulation are as follows:

• For residential houses, the subsidy for an air-to-water heat pump is 17,000 kroner, and for geothermal heat, it is 27,000 kroner.
• For large air-to-water heat pump systems (buildings over 400 m2), the subsidy varies from 45,000 kroner for a 20 kW – 50 kW heat pump to 349,000 kroner for a heat pump over 300 kW.
• For large geothermal systems (buildings over 400 m2), the subsidy ranges from 65,000 kroner for a 20 kW – 50 kW system to 410,000 kroner for a system over 300 kW.

The Varmepumpepuljen is a significant initiative to promote the use of more energy-efficient and environmentally friendly heating solutions. It is a clear indication of the Danish government’s commitment to the green transition and a sustainable future.

The way a heat pump is designed makes it possible to use every kilowatt hour efficiently, resulting in the emission of three to four times as much heat in relation to electricity consumption.

Potential savings

According to Green Power Denmark‘s calculations, heating an average 130m2 house with natural gas cost approximately DKK 28,726 in 2022, while using a heat pump cost only DKK 13,136. The cost of heating a house with natural gas has increased by DKK 11,400, compared to just DKK 5,300 if the same house was heated with an electric heat pump. This means that the annual savings from using a heat pump instead of a gas heater increased from DKK 9,459 in 2021 to DKK 15,590 in 2022.

Therefore, even though electricity prices rose significantly in 2022, heat pump owners fared much better than those with natural gas heaters thanks to the high energy efficiency of heat pumps.

The cost of a heat pump

A heat pump is more expensive to purchase than a natural gas heater. Expect to pay from DKK 135,000 for a quality heat pump for an average single-family home for a standard installation. The price depends on the size and type of the home and heat pump.

Subsidy options

If you live in an area without district heating, you can apply for the Energy Agency’s subsidy pool for heat pumps, which they expect to open in the first quarter of 2023. Remember that you must not enter into a binding agreement with a supplier before you have received a subsidy commitment.

If you switch from natural gas heating to a heat pump, your gas connection must be disconnected. You can also receive a subsidy for this.

Our calculations show that the cost of a heat pump is typically recovered within 6-10 years, taking into account the reduction in electricity tax and subsidies from the Energy Agency’s subsidy pool.

A greener heating solution

In addition to the economic benefits of a heat pump, you also get a solution that saves the environment from CO2. By using the energy that is already in the air or ground, a heat pump can produce heat that can be distributed throughout the home’s heating system.

The low CO2 emissions mean that your home’s energy rating can be up to two levels better if you replace your oil or gas heater with an air-to-water heat pump or a ground source heat pump.

Try the calculator at Varmepumper and get a rough estimate of the financial benefits of switching from your current heating solution to a heat pump. The calculator is free to use, and it only takes a few minutes to calculate your savings: