How efficient are heat pumps?

27 February 2025

In the discussion about Germany’s Building Energy Act – better known as the Heating Act – heat pumps became a bone of contention: How efficient are they, under what conditions can they be operated economically and are they also suitable for old buildings? Our checklist clarifies the most important questions.

A heat pump works in a similar way to a refrigerator – only the other way around: While the refrigerator extracts heat from its interior to keep its contents fresh, a heat pump extracts heat from the environment outside the house and raises its temperature to warm up the living spaces within. Here's how it works:

1. Evaporation
   The evaporator absorbs the thermal energy from air, soil or groundwater and transfers it to a liquid refrigerant, which, as a result of the heat it absorbs, evaporates, thus becoming gaseous.
2. Compression
   The gas is then compressed in an electrically powered compressor and heats up – as it would in an air pump. However, “the greater the temperature difference between the heat source and the heating water, the greater the pressure differential the compressor has to overcome and the more electrical power the heat pump needs,” explains Timo Reisner, heat pump expert at TÜV NORD.
3. Condensation
   In the next step, the heated, high-pressure refrigerant transfers its heat to the heating circuit, cooling down and returning to liquid form.
4. Expansion
   In the last step, the pressure of the refrigerant is lowered again via an expansion valve and the refrigerant is injected back into the evaporator. In the process, it cools down abruptly until it has reached its initial temperature – and the heat pump cycle starts all over again.

Oil heating systems usually have an efficiency of between 85 and 95 percent, while modern gas heating systems score slightly better. “If you burn a kilowatt hour’s worth of oil or gas, you generate a little less than one kilowatt hour of heat,” explains Reisner. Up to 75 percent of the energy used by a heat pump, on the other hand, comes in the form of freely available ambient energy. “Purchased energy” in the form of electricity is only needed by the compressor. This means that if you put one kilowatt hour (kWh) of electricity into a heat pump, you get three to five kilowatt hours of heat out of it. “Heat pumps are therefore by far the most efficient form of heating, as they provide more energy than you put into them,” says Mr. Reisner.

Around 76 percent of all new residential buildings approved in Germany in 2023 are now heated by heat pumps. However, the discussions around the Building Energy Act repeatedly returned to the question of whether heat pumps were also suitable for old buildings, with a great deal of scepticism being voiced. “This completely ignores the facts. Studies have already sufficiently shown that old buildings can be heated economically with heat pumps,” Mr. Reisner comments. For example, a study by Fraunhofer ISE of detached homes of up to 170 years in age revealed the following results: The 29 air-to-water heat pumps examined, which were of the main type usually installed in Germany, had an average annual performance factor (COP) of 3.1 – in other words, they produced three times as much heat in real operation as the electricity that had been put into them. Even more efficient were the twelve geothermal heat pumps examined, which achieved an average COP of 4.1. “This is because the ground temperatures are higher in winter than those of the outside air, which means that the heat pump doesn’t have to raise them quite as much,” says Mr. Reisner.

It is true that underfloor heating is particularly efficient. “Due to the larger area, the heating water only needs a comparatively low flow temperature of 35 degrees, for example,” says Mr. Reisner. However, surface heating, whether in the floor or in the wall, is not essential. As a rule of thumb, if the flow temperature of the heating system gets up to 55 degrees (which can fairly easily be tested by non-experts), then there will be no problem with switching to a heat pump. However, if the flow temperature is higher, which is often the case with poorly insulated houses with old ribbed radiators, a costly energy-efficient renovation will not necessarily be required. “It’s often enough just to replace the least efficient radiators with modern ones. This won’t cost much and will makes a considerable difference in terms of the energy used,” says the expert.

All that is required to counter this oft-repeated assumption is to look at Germany’s Nordic neighbours. In Sweden, Finland and Norway, heat pumps have long been standard and work reliably even in when it’s freezing cold outside. Whereas the Swedish government started pushing for the switch back in the early 1990s through various incentives, with consumers initially turning mainly to geothermal heat pumps, it’s now air-to-air or air-to-water heat pumps which are increasingly being installed in Sweden and Norway. Thanks to technological advances, they can now also cope well with extremely low temperatures.

Air-to-air heat pumps are comparatively inexpensive to purchase and can also be used as air conditioning in summer. They have therefore been very common in more southerly latitudes for decades. They have two disadvantages, however: They cause a low-level background noise in the home and they are not connected to the hot water circuit – meaning that they don’t provide any domestic hot water. “And people who are used to radiators or underfloor heating often find the draught that these appliances generate unpleasant,” adds Mr. Reisner. “However, they work so efficiently that they can still be part of a very attractive overall package, for example in combination with conventional electric instantaneous water heaters or a separate heat pump for hot water.”

Air-to-water heat pumps are by far the most popular type of heat pump in Germany. They are relatively quick and easy to install, are in the mid-range in terms of price and, unlike air-to-air heat pumps, usually deliver the complete package of heating and hot water, depending on the equipment installed. However, the outdoor units used by air-to-water heat pumps, as well as those of air-to-air units, have long been saddled with the reputation of being loud and annoying for the neighbours. The manufacturers have since addressed this drawback: “The appliances have become much quieter, although they’re still not quite silent. So, when setting up the installation, care should be taken as far as possible to ensure that the neighbours aren’t disturbed by the noise,” says Mr. Reisner.

Heat pumps that draw energy from the ground come in three varieties: Firstly, as surface collectors, which are laid close to the surface, for example in the garden; secondly, as geothermal probes that penetrate up to 100 metres deep into the earth; and thirdly, as water-to-water heat pumps that transport groundwater to the surface and use its heat for domestic heating purposes. All three have the advantage that the temperature below the Earth’s surface is higher in winter than it is in the air. This also makes these pumps particularly suitable for hot water heating. Their disadvantages include the labour-intensive nature of the installation and its higher costs: Geothermal collectors need space, and drilling for geothermal probes and groundwater wells requires a permit, which is usually only granted outside drinking water protection areas. On the other hand, geothermal probe and groundwater heat pumps in particular are incomparably efficient, i.e. they require very little electricity.