As pressure to decarbonize mounts and economic incentives grow to make electricity demand catch up to renewable generation, the transition to renewable heat increasingly comes into focus for many players active in various types of energy services.
On top of the greening of gas networks and the development of biomass boilers that have been developing for years, players all along the value chain strive to make air-source heat pumps and ground-source heat pumps more attractive and competitive:
- In individually heated homes, the decrease in subsidies for solar PV incentivizes home-owners to combine it with heat pumps (and EVs and batteries in a growing number of cases, with e.g. Germany displaying very significant growth over the past few years).
- In buildings with larger heating systems (commercial or collective housing) or in district heating networks, project developers / financing players / operators / heat pump installers are pushing technical solutions that can replace gas boilers (or systematic use of biomass for DH), enabled by the development of improved drilling techniques (for geothermal) and heat pump models with increasing power, efficiency and convenience (for air-source heat pumps).
These developments are underscoring the importance of proper heat pump sizing (power as a function of space, insulation, radiating surface) and operation (water temperature control logic), for which there is significant room for improvement (standardization of programming interfaces, development of installation & maintenance skills specific to heat pumps): players that manage to get ahead of the pack on these key customer satisfaction criteria may get into position to lead the market.
Whereas decarbonized solutions are now commonplace in new buildings, high CAPEX remains an issue in many existing buildings, leading to the implementation of hybrid solutions where gas is used to provide peak power (also supported by grid constraints, which led the Netherlands to make hybrid heat pumps the default heating system).
In all these configurations, resorting to storage in the form of warm or hot water can present significant economic upside: it is a relatively cheap form of storage that provides direct benefits from basic load shifting and more advanced. Watch for such systems to develop for hot water heating in countries where it has room to grow (e.g. Belgium) and space heating in all countries where air-to-water heat pumps can replace legacy gas and fuel oil boilers.
E-CUBE supports players all across the value chain to find their optimal positioning, establish relationships with key partners, structure their offer and raise funds to offer no-CAPEX solutions.
In 2026, E-CUBE will be particularly attentive to:
- The impact of increasing subsidies for large-scale heat pumps in buildings, e.g. under France’s white certificate scheme (CEE)
- Considerations at EU level on “CfD-type” support schemes for renewable heat, such as the Renewable Heat Incentive (RHI) in the UK
- The development of a “renewable heat project developer” positioning that several players already embody
- Increased private equity & infrastructure M&A activity in heating system installation & maintenance, as exemplified in 2025 by the sale of Engie Home Solutions in France, Techem Solutions in Germany, and Empact’s €100m equity raise
E-CUBE has developed strong expertise on the topic of renewable heat in buildings through its recent projects and the experience of its consultants. We would be delighted to discuss these market perspectives and opportunities with you. Please feel free to contact the experts below to schedule a conversation on the topic.
