In 2023 more than 190 thousand units were sold in the 6 most important European markets for biomass heating boilers, which represents a fall of 40.9% compared to the previous year. There are many reasons for this: declining interest in wood heating systems compared to other heat generators, problems with the environmental compatibility of this technology, keyword biomass potential, or poorly organized and sometimes overly bureaucratic subsidy programs, as the latest study by InterConnection Consulting shows.

Pellet Boilers on The Rise again after a Difficult Year 2023

Despite the significant decline in 2023, pellet boilers remain the best-selling type of boiler in Europe with a market share of about 48%. In 2022, however, their market share was almost 75%, which is due to the various national subsidy programs, as pellet boilers usually receive preferential subsidies. Last year, pellet boilers increased again to 53% and a market share of 63% is expected by the end of 2027. The second most popular boiler type are wood log boilers with a market share of 24% in 2024, whose customers prefer the manual operation of this heating system and mostly live in densely wooded regions. In third place are so-called “combi boilers”, which can be equipped with both logs and pellets. The least common are wood chip boilers, which generate heat by burning wood chips or wood shavings. Compared to the other boiler types, the latter are overrepresented in the heating output classes above 50 kW and are therefore installed more frequently in non-residential buildings.

Fluctuating Renovation Segment Due to Subsidy Programs

Taking a closer look at the new construction and renovation/replacement business segments, the latter is clearly the larger one with a market share of around 92% (2023). By the end of 2025, the market share will increase to 94.7%, but after that it will fall again due to the expiration of national subsidy programs and political uncertainties regarding renewable heat emitters. This trend is also due to the declining popularity of biomass boilers in the new construction segment: In Germany, for example, boilers are now only installed as central heating systems in less than 5% of apartments and detached houses.

Poland Saves The Industry with a Slight Plus

Sales figures also fell significantly in Poland in 2023, with a drop of almost 24%. However, positive growth rates are expected with an average growth rate from 2024 to 2027 of 9.3%. The main reasons for this development are as follows: Firstly, the government has launched the “Clean Air” subsidy program, with cost reimbursements of up to 100%, which incentivizes Polish citizens to replace their old oil and gas boilers and other fossil fuel-based heating appliances with newer and more environmentally friendly options such as heat pumps and boilers, and secondly, the proportion of applications for the purchase of an environmentally friendly boiler actually exceeds the proportion of applications for heat pumps. This is due to the declining popularity of heat pumps, mainly due to problems with scams and dubious manufacturers who tried to sell heat pumps as if they were of the highest quality, but ultimately did not meet international emission standards. This phenomenon makes Poland a special case in Europe and the Polish market thus stands in stark contrast to other European countries, where the market for biomass boilers is set to decline by single/double digits over the next two years. Heat pumps are seen as the better option in most European countries and it is therefore not surprising that the European boiler market as a whole will remain relatively stable over the next three years despite Poland’s strong growth, meaning that the average volume growth rate from 2024 to 2027 is 0.3 %.

Manufacturers of heating biomass boilers should not limit themselves to the production of these products, but should also offer other heat emitters, in particular heat pumps, in order to be able to react quickly to the changing preferences of consumers and thus position themselves more strategically diversified. As the case of Poland shows, biomass boilers should not be ruled out as a heating solution in the future, but this market will shrink back to a niche market, at least according to the current situation.

Last year, more than 115 million m² were sold in Europe’s Top 13 markets as the market suffers by the declining housing market. The long-term growth trend remains intact and underfloor heating will further dominate the heating market. The residential customer segment will slightly loose market shares, as the latest study by InterConnection Consulting shows.

Poland Has the Biggest Electro Scene – Unlike Italy

Hydronic, meaning water based, UFH systems are the most common choice all across Europe when it comes to the decision of how to heat one’s floor. But there are some important differences: While the market share of water based UFH systems in Poland is still high with 74%, it is the lowest in Europe. The situation changes completely when we take a further look into the Italian market: almost 100% of all UFH systems sold are hydronic, mainly because of the advantage, compared to its electric counterpart, that during hot seasons these systems can also be used for cooling instead of heating. This phenomenon may be more established in Italy but it gains importance in other European countries too, like in the UK for example. Other factors for the popularity of hydronic systems could be the lower overall cost of energy consumption, even though the prices for installing choosing this heating option are higher than for the electric UFH systems.

Given the dominance of hydronic UFH systems, it is worth looking further into this product group: We can distinguish between the so-called wet installation method and the dry installation method, that is considered mostly in renovation projects. Wet installations are generally the most common installation method because of the lower costs.

Most UFH Systems Are Installed in the Residential Segment

The residential sector is the one with the most square meters of underfloor heating installed across all analyzed European countries. The market share of this customer segment varies between 67% and 98%, but in almost all countries, except Belgium, there is a trend towards the non-residential segment, meaning that by 2027 the European market share of this segment will be about 20%.

As the attachment rate is stable for the majority of the countries, the trend towards the non-residential segment can be mostly attributed to the comparatively better development of the non-residential sector.

The Top 10 Account Only for 28% of the Total Market

The so-called system producers, meaning producers that offer whole UFH systems, not only certain components like pipes or plates, have a cumulative quantity market share of only 28%. The rest of the market belongs to many component and regional system producers.

Market shares are currently shifting relatively strongly in Spain, where the established companies loose market shares to smaller and cheaper producers. Examples for local top players are ALB Sistemas and Polytherm in Spain, RWC and Polypipe in the UK and LK Pex in Sweden. The European top players in alphabetical order are: Danfoss, Oventrop, Purmo, Kermi, Rehau, Roth, Schütz, Stiebel Eltron, Uponor, and Warmup.

The market for floor heatings in the DACH-region not only benefits from the construction boom but also from rising popularity of surface heatings. In 2018 sales increased by 4,2 percent compared to the previous year. Until 2021 it can be expected that the market will reach a level of 27,9 mil. square meters representing an annual average growth (CAGR) of 0,9% – as growth dynamic will slow down significantly from 2019.