Dive Brief:

• Building owners in Germany who installed electric heat pumps in older structures saw significant environmental and performance improvements over gas-fired alternatives, the Fraunhofer Institute for Solar Energy Systems ISE said last month.
• The average seasonal performance factor, or SPF, across 77 heat pump retrofits was 3.4, meaning the equipment generated 3.4 units of heat per unit of electricity consumed, Fraunhofer said. With seasonal performance factors below 1, combustion and electric resistance heating equipment is far less efficient. The study focused on residential buildings but the findings could have relevance to commercial buildings.
• Fraunhofer found no correlation between building age and heat pump efficiency, suggesting heat pump retrofits may be cost-effective in older buildings as well as newer ones.

Dive Insight:

More than 70% of German new-construction residential buildings use heat pumps for space conditioning, Fraunhofer said. But — as in much of the United States — most existing German residences rely on combustion appliances.

Fraunhofer studied air- and ground-source heat pump retrofits in buildings constructed between 1826 and 2001. Seasonal performance factors ranged from 2.6 to 4.9 for air-source systems, which exchange heat with air outside the building envelope, and 3.6 to 5.4 for ground-source systems, which exchange heat with the bedrock below the building. The systems’ electric resistance rods, which support heat pumps during very cold temperature, accounted for a minuscule portion of total energy use.

Heat pump retrofits also offer significant climate benefits, Fraunhofer found. In 2024, the German systems it studied had 64% lower CO2 emissions than gas heating systems. Fraunhofer noted heat pumps’ actual emissions reductions may vary depending on the carbon intensity of electric generation resources on the local grid at a given time. 

“The results clearly show that heat pumps can be operated efficiently even in older buildings and that they provide climate-friendly heating without the need for the buildings to be renovated to new construction standards,” Danny Günther, team lead for heat pumps and building transformation at Fraunhofer ISE, said in a statement.

Fraunhofer’s findings back up recent studies of air- and ground-source heat pumps in commercial facilities, which have broadly concluded that the technology is more efficient and at times more cost-effective to operate than combustion alternatives.

Ground-source heat pumps, which are generally more efficient than air-source heat pumps, can reduce energy consumption by nearly 30% according to a literature review published in September by Texas A&M University researchers. The energy savings are particularly pronounced in more humid climates and climates where extreme temperatures are more common, and in facilities with relatively stable heating loads, such as hospitals, they said. 

Experts expect ground-source heat pump adoption to rise in the United States over the next several years due to favorable tax treatment in the One Big Beautiful Bill Act President Trump signed in July.

In U.S. commercial buildings, transitioning gas-fired or electric resistance rooftop units to higher-efficiency air-source heat pump units could reduce average energy consumption by 10% and greenhouse gas emissions by 9% across the sector, the National Renewable Energy Laboratory (now known as the National Laboratory of the Rockies) said in a 2023 whitepaper that modeled installation and operation nationwide. NREL’s modeling showed greater energy savings for systems replacing combustion equipment: 17% for natural gas and 50% for fuel oil and propane units, compared with 8% for electric resistance units. 

But the NREL paper noted sharp regional differences in rooftop heat pumps’ heating efficiency. For each unit of electricity consumed, building owners could expect to see 5.6 units of heat produced in California and 5.3 in Florida, compared with 2.1 units of heat in North Dakota and 2.5 in Minnesota.

Among other factors, lower operating efficiencies can extend or eliminate payback periods for heat pump retrofits, particularly when natural gas prices remain relatively low, the American Council for an Energy-Efficient Economy said last year. Inadequate electrical service, space constraints and refrigerant challenges can increase retrofits’ cost or limit their feasibility, ACEEE added. 

But with adequate policy support and more real-world performance data, these barriers “are not prohibitive to seizing the significant potential of heat pumps to help electrify commercial buildings,” the group concluded.