France Ties Heat-Pump Incentives to European Production
France is contemplating a revision of its heat pump support structure to align financial incentives with its industrial strategy and enhance European manufacturing and supply-chain resilience. From 1 September 2026, the improved Coup de pouce Chauffage (“heating boost”) bonus as part of the Energy Savings Certificates (CEE) scheme will only be available for eligible heat pump models on a government-approved list. The new eligibility criteria apply to certain air-water and HP water heaters replacing individual coal, oil or gas boilers in principle private residences.
The measure does not ban heat pumps manufactured outside of Europe but says the improved support is only available for European production. Non-European equipment may continue to be sold and installed in France but will not benefit from the increased CEE bonus. The requirement is the manufacturing or final assembly of the particular approved model, not the sourcing of all of the components. Under the new regime the relevant production activity must be performed in the European Economic Area (EEA). For monobloc systems, the final assembly of the whole refrigerant circuit shall take place in the EEA. For split systems, the final assembly of at least one refrigerant-circuit sub-assembly shall take place in the EEA. Furthermore, eligible models must meet recognised performance certification requirements from third parties.
The policy is consistent with the direction set out in France’s 2024 industrial plan for heat pumps, which calls for public procurement and financial support to increasingly favour French and European heat pumps with strong environmental performance. The plan was to produce one million heat pumps annually in France by 2027, about twice the country’s current production capacity, and support the creation of around 47,000 jobs, including 30,000 installer jobs. This industrial push follows a period of significant volatility in the French heat pump market. The BRG heating and cooling report 2026 showed that the French heat pump market declined in 2025 after the strong growth seen during the European energy crisis. The correction reflected weaker demand after several years of rapid growth and impacted manufacturers that had increased production capacity in anticipation of continued market expansion. Some manufacturers cut production or modified employment as demand weakened. The development of the market has demonstrated how important a stable and predictable policy framework is, in particular for manufacturers who are making long-term investments in production capacity.
But financial incentives are still important to sustain demand for heat pumps. The Coup de pouce Chauffage scheme offers financial assistance to replace fossil-fuel heating systems, the amount of which depends on the household and the technology. The government also supports the installation of heat pumps through MaPrimeRénov', the CEE scheme and interest-free renovation loans. The cumulative impact of the MaPrimeRénov and CEE schemes on the installation of heat pumps in 2023 amounted to about EUR 1 billion, according to the French 2024 heat pump industrial plan, while the average purchase price of an air-water heat pump was estimated at EUR 8 000. These incentives continue to play an important role in reducing the upfront cost for households.
The electrification strategy of France is also making heat pumps more relevant for the longer term. The government’s roadmap to 2026 includes more electrified buildings and less reliance on imported fossil fuels. Heat pumps are expected to be among the technologies that replace heating systems that run on gas and oil. The longer-term ambition is to get to one million heat pump installations a year by 2030. This mix of targets for electrification and industrial policy could impact the competitive landscape of HVAC manufacturers in France.
There is also the new European-production requirement to consider in product selection. As well as price, energy efficiency, type of refrigerant and technical performance, manufacturers will have to take into account whether individual models qualify for enhanced subsidies. The first list of approved models under the new quality and industrial-resilience framework was published by the French government in July 2026, including products from a variety of international manufacturers. Individual approval numbers will be given to approved models, with a transitional regime for certain models linked to existing investment schemes.
Therefore, the framework does not mandate that heat pumps be manufactured in France. Instead, it is more orientated toward production and final assembly in the EEA. This is an important distinction for international manufacturers. Companies can continue to supply the French market from production facilities outside Europe, but models manufactured or assembled outside the EEA might have a disadvantage in the competition for customers eligible for the enhanced subsidy. The policy might also encourage multinational manufacturers to keep or grow their European production and assembly operations instead of relying solely on imports from lower-cost manufacturing locations.
Therefore, the French heat pump market is entering a new phase after the rapid growth and correction of recent years. Building electrification, replacement of fossil-fuel heating systems and government incentives support long-term demand, but market recovery will depend in part on the stability of these support mechanisms. Recent experience has demonstrated that large amounts of subsidy-driven demand may incentivise manufacturers to ramp up capacity quickly, but changes in policy support can result in weaker demand and overcapacity. It will therefore remain important for manufacturers contemplating further investment to have a predictable policy environment.
The French approach is more broadly important for the European HVAC industry as it increasingly links heat pump deployment to industrial policy. That financial support is not only being used to help households move away from fossil-fuel heating but also to bolster European production and supply-chain resilience. This approach could serve as a reference for other European markets looking to speed up building electrification while also decreasing their reliance on imported HVAC equipment.
Author: Anam Khan
Source: BRG Research
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