Belgian energy regulator wants to make heat pumps more profitable

The Belgian energy regulator CREG has devised a number of recommendations to make heat pumps more financially attractive to households. For example, the regulator recommends an incentive tariff for distribution costs and a reform of the existing consumption tax.

A study by CREG has shown that investments in renewable energy, especially heat pumps, have not been profitable in recent years. The cost of a heat pump - including investment and energy costs - was found to be two to three times higher than the cost of a boiler using fossil fuel oil or natural gas.

CREG has now made recommendations to the federal and regional governments to improve the economics of heat pumps. For example, it suggests that regional investment premiums for heat pumps should only be given to houses with adequate insulation. Without adequate insulation, heat pumps are less efficient and their profitability drops.

Incentive tariff

It also advocates the introduction of an "incentive tariff" for electricity distribution costs. This tariff could vary according to peak and off-peak times, or be based on an instantaneous signal of expected grid usage. This would encourage consumers to shift their energy consumption and reduce their bills, the regulator says.

Other recommendations include an extension of the 6 per cent VAT rate on heat pump installations, a reform of existing excise duties on energy in favour of heat pump users, and regional premiums for new installations.

^{PHOTO © Damien MEYER / AFP}