- 'Superproduct made in Germany': Habeck praises the heat pump
Robert Habeck is a big fan of heat pumps, to an almost astonishing extent. "A super product made in Germany that makes sense in every way," he calls the systems that use heat from the air, groundwater, or the earth. Despite the months of arguing about the Heating Act last year, he has suffered significant damage.
Tanned and in good spirits, Habeck goes on the offensive a year later. For three days, he tours North Germany on a pump tour. He sets the tone during his visit to the heat pump specialist in Holzminden, Lower Saxony: "Heat pumps increase the value of buildings. A heat pump saves money."
The heat pump industry could use such support, if it helps. Because the sale of these devices has recently collapsed significantly, and the federal government's goal of installing 500,000 heat pumps annually by 2024 is likely to be missed in the first year.
Only 90,000 heat pumps were sold in the first half of the year, according to figures from the Federal Association of the German Heating Industry (BDH), a 54 percent decrease from the previous year. The BDH expects a maximum of 200,000 heat pumps to be sold by the end of the year.
This also affects Stiebel Eltron, where around 25 representatives of IG Metall and the works council gathered during Habeck's visit, fearing for their jobs. "We just want politics to keep its word," says Elke Grimme, the chairwoman of the Holzminden works council. She finds everything too unpredictable and refers to the recent cut in funding for energy advice. Moreover, electricity prices must come down. On the forecourt, Habeck discusses with Grimme and her colleagues.
Stiebel Eltron will have to cut jobs, admits the chairman of the supervisory board, Ulrich Stiebel - although not in the amount of 1,000 that the "Handelsblatt" reported. A part of the workforce has been in short-time work since March. Stiebel Eltron has approximately 2,600 to 2,700 employees at its German locations and around 5,500 worldwide, according to company spokesman Henning Schulz.
The market has become smaller, but Stiebel Eltron now holds a larger piece, says Schulz. His company had no choice but to significantly increase its workforce in recent years. "They've been snapping up heat pumps from us." Without the expansion, they would have lost market share.
The current downturn follows a record year: 356,000 heat pumps were sold in 2023. And the decline also affects gas heaters, where sales fell by 42 percent to 223,000 devices in the first half of the year. The significantly increased gas prices following the Russian invasion of Ukraine, as well as uncertainties about the then-heavily debated Heating Act, may have played a role for buyers last year.
The new Heating Act generally requires that from 2024 onwards, every newly installed heating system must be operated to 65 percent with renewable energies. However, these regulations initially only apply to new buildings in a new development area. Existing heating systems can continue to be operated. Many municipalities are still unclear whether district heating could be an alternative for those affected.
The entire industry is concerned. "The current market situation is a challenge for the heating industry," says Markus Staudt, CEO of the Federal Association of the German Heating Industry (BDH), in response to a request from dpa. Many companies have made significant investments in expanding their production capacities in recent years, expecting a politically desired development.
How much the market downturn affects individual companies depends on the degree of specialization and the strategy pursued. "This has currently led to far-reaching measures regarding the use of short-time work programs and further cost-cutting measures."
The extent to which these measures will be expanded or intensified depends on the developments in the coming months and the respective strategies of the companies. The industry association remains cautiously optimistic: "We expect the market to stabilize, but we have not yet seen any signs of a significant improvement." The increase in approved funding applications in June gives cause for cautious hope.
Not just Stiebel
It's not just Stiebel that's struggling. Bosch's climate technology subsidiary has recently seen a significant drop in heat pump orders. In Germany, demand for heat pumps had previously collapsed at the end of 2023 and the beginning of this year, among other things due to the long uncertainty about heat pump funding and the crisis in the construction sector. However, the head of the division, Jan Brockmann, had expressed cautious optimism for the second half of the year.
At the beginning of the year, Bosch CEO Stefan Hartung criticized the political uncertainty surrounding heat pumps as "poison for long-term purchasing decisions." The Bosch Home Comfort Group, which was previously known as Bosch Thermotechnik, does not provide sales figures.
Bosch remains optimistic
By the end of the decade, Bosch plans to invest more than one billion euros in its heat pump production in Europe. For example, a site in Portugal is being expanded, and a new factory is being built in Poland by 2027. There have been no reports of job cuts in Germany like those in other Bosch business areas.
On the contrary, Bosch recently announced its largest acquisition in the history of the company in the heating, ventilation, and air conditioning sector. For 7.4 billion euros, the group is taking over parts of the Irish building technology conglomerate Johnson Controls, among other things to strengthen its global position. The company expects the global market for products in this area to grow by 40 percent by 2030.
Short-time work at Vaillant
The heating technology manufacturer Vaillant is also struggling with weak demand. In mid-May, the family-owned company announced that it would cut around 700 jobs worldwide, including 300 in Germany. The reason given was to align the company with the new demand situation and future market and customer requirements.
The weak demand is also affecting production at Vaillant. In mid-July, the CEO of Vaillant Germany, Tillmann von Schroeter, told the Ippen media group that around 100 people in parts of the production were still on short-time work, out of a total of 5,000 employees in Germany. "In the medium term, we expect the heat pump business to pick up again," von Schroeter said in the interview.
The heat pump industry is currently facing a significant challenge due to a decrease in sales, with only 90,000 units sold in the first half of the year, a 54% decrease from the previous year. To reach its goal of installing 500,000 heat pumps annually by 2024, the federal government's target for the first year may be missed.
Markus Staudt, CEO of the Federal Association of the German Heating Industry (BDH), acknowledges the challenge, stating, "The current market situation is a challenge for the heating industry." This downturn affects not only Stiebel Eltron but also other companies in the industry, such as Bosch's climate technology subsidiary, which has seen a significant drop in heat pump orders.
