European Electricity Prices: Impact on Energy Consumers and Heat Pump Applications

As of the second half of 2024, household electricity prices in Europe are showing signs of stabilization after the steep increases caused by the 2022 energy crisis. However, prices still vary significantly between countries and remain higher than pre-crisis levels.

According to the latest Eurostat data, the average residential electricity price across the EU (including taxes and charges) is €0.287 per kWh, equivalent to approximately £0.25 per kWh. This average masks a wide range of prices depending on national energy policies, taxation levels, and energy mix strategies.

Electricity Price Comparison by Country

Germany: The Highest in Europe

Germany remains the country with the highest electricity prices in Europe, reaching approximately €0.39/kWh (around £0.34/kWh). This is largely due to Germany’s energy transition policy (Energiewende), which includes high renewable energy surcharges and grid fees.

Denmark: High Prices Due to Taxation

Denmark also has high residential electricity rates at around €0.31/kWh (£0.27/kWh), driven mainly by taxes and environmental surcharges to fund clean energy projects.

Hungary: The Lowest Electricity Rates

On the other end of the spectrum, Hungary offers one of the lowest household electricity rates in the EU, at just €0.091/kWh (£0.08/kWh), thanks to heavy government subsidies and market regulation.

United Kingdom: Outside the EU but Still Expensive

In the UK, as of early 2025, household electricity rates are about £0.27/kWh (€0.31/kWh). Additionally, UK electricity bills include a daily standing charge of roughly £0.54, making total household energy costs even higher than in many EU countries.

Why Do Electricity Prices Vary So Much in Europe?

Several key factors contribute to the price disparity:

• Energy mix (e.g., coal, gas, nuclear, renewables)
• Government subsidies and taxes
• Grid infrastructure investments
• Energy demand and weather conditions
• National policies for energy security and decarbonization

Electricity Prices and the Role of Air Source Heat Pumps

Can Heat Pumps Save You Money Despite High Electricity Prices?

The air source heat pump (ASHP) is one of the most energy-efficient technologies available for residential heating and hot water production. Despite regional variations in electricity costs, ASHPs can significantly reduce total heating expenses when compared to traditional heating systems like gas or oil boilers.

Benefits of Air Source Heat Pumps in Europe:

• High efficiency: COP (Coefficient of Performance) values often reach 3 to 5, meaning 1 kWh of electricity can produce 3–5 kWh of heat.
• Lower carbon emissions: Especially when powered by renewable electricity.
• Financial incentives: Many EU countries offer rebates, tax credits, or subsidies for switching to heat pumps.
• Energy independence: Reduces reliance on imported fossil fuels.

How Electricity Prices Impact Heat Pump ROI

While high electricity prices may raise concerns about operating costs, the overall cost-effectiveness of heat pumps remains strong in most regions due to:

• High energy efficiency
• Stable, predictable performance over time
• The possibility to pair with solar PV systems to further offset electricity use

In fact, in countries like Germany or Sweden—despite their higher electricity prices—heat pumps are still widely adopted due to strong government support and long-term savings potential.

The Future of Electricity Prices and Clean Energy Adoption

Although electricity prices across Europe are more stable in 2024 than in the past two years, they continue to influence consumer behavior and the pace of clean energy adoption. Technologies like air source heat pumps will play a critical role in Europe’s effort to decarbonize buildings, especially as governments push for greater energy efficiency and fossil fuel phase-out.

For homeowners, understanding national electricity price trends is essential for making informed energy decisions—whether it’s investing in a heat pump, upgrading insulation, or integrating smart thermostats.