By 2024, Germany conducted nearly 700,000 energy consultations. The result? A resounding rejection of hydrogen as a viable heating solution for homes. Despite mounting political enthusiasm, expert consensus is increasingly clear: hydrogen heating is a costly detour in the path to decarbonizing residential buildings.
The Economics Don’t Add Up
Green hydrogen—produced via electrolysis using renewable electricity—currently accounts for just 0.1% of global hydrogen supply. At two to three times the cost of fossil-derived hydrogen (grey hydrogen), its price tag alone renders it economically unviable for residential heating. Thirty-two independent studies evaluated by CORRECTIV show hydrogen heating as consistently more expensive and less efficient than alternatives like heat pumps, district heating, or solar thermal systems.
Even Germany’s former head of heat policy, Christian Maaß, dismissed H₂-ready systems as “far too expensive and inefficient” for households. Natural gas users face an additional burden: CO₂ emissions pricing under the EU Emissions Trading System will raise fossil heating costs starting in 2027, potentially adding €400 annually per household, with worse to come as gas infrastructure costs are spread across a shrinking customer base.
Scarcity and Strategic Prioritization
Germany’s hydrogen strategy prioritizes industrial decarbonization. The proposed hydrogen core network—slated for completion by 2032—focuses on ports, refineries, and steel hubs, bypassing residential areas entirely. Even the Ministry of Economic Affairs admits that hydrogen supply will rely heavily on imports, with plans to build infrastructure for global delivery. Yet these imports remain speculative.
In Namibia, a key export partner, only 2% of surveyed sites were found competitive by the Technical University of Munich, due to security risks and high costs. Meanwhile, a January 2025 report from the Potsdam Institute for Climate Impact Research confirmed that global green hydrogen production remains well below projections, with industrial demand far outpacing supply.
Municipal Resistance, Political Advocacy
Municipal utilities—despite VKU (their national association) championing hydrogen heating—are increasingly signaling doubt. Stadtwerke München, Nürnberg, Chemnitz, and Düsseldorf have all expressed skepticism or pointed to a lack of planning for hydrogen integration. Without firm infrastructure commitments, “H₂-ready” heaters are unlikely to ever run on hydrogen.
Nevertheless, hydrogen-capable systems were enshrined in Germany’s Building Energy Act following lobbying pressure from the natural gas industry. Associations like DVGW and Zukunft Gas, backed by political allies in CDU and FDP, pushed to allow heating systems that can theoretically convert to 100% hydrogen, despite such systems being absent from the market and unaccompanied by binding municipal deployment plans.
The Profit Motive and Public Risk
For municipal utilities—serving over 50% of customers with gas—hydrogen offers a narrative that protects existing infrastructure and revenues. In contrast, heat pumps, powered by electricity and environmental heat, reduce grid dependency and limit utility profits. The insistence on H₂-readiness serves to delay transition to these lower-margin but more sustainable technologies.
Environmental economist Jan Rosenow likens the situation to building a “Ferrari-ready” garage—technically feasible but prohibitively expensive and practically unused. Claudia Kemfert of the DIW Berlin encapsulates the inefficiency: “Who heats with champagne when it can also be done with soda?”
A False Choice Embedded in Policy
Under current legislation, municipalities that declare vague intentions to build hydrogen infrastructure can still approve gas systems labeled H₂-ready. Yet there is no obligation to ever supply hydrogen, creating a regulatory loophole that entrenches fossil fuel use and burdens homeowners with costly, transitional technology.
As public funds are rerouted from climate investments to subsidize rising gas prices, the contradiction becomes stark. Germany’s stated climate ambitions are being undermined by policy concessions to an industry whose future hinges on an increasingly implausible hydrogen rollout.
The hydrogen heating narrative—though politically palatable and industry-backed—fails the tests of economics, feasibility, and climate logic. In a market that demands scalable, cost-effective solutions, betting on hydrogen for residential use appears less like innovation and more like an expensive stall tactic.
