Heat pumps: Why Germany's heating revolution is stalling
German Economy Minister Robert Habeck is desperately trying to promote the use of heat pumps for heating German households. The Green politician is convinced the technology has the potential to create jobs in Germany while saving the climate.
Heat pumps, which utilize ambient air or groundwater heat, are low-emission — especially when the heat pump is powered by green electricity from a private photovoltaic system.
When Habeck and his Green Party became part of Chancellor Olaf Scholz's three-party coalition government in 2022, they successfully launched a campaign to change how Germans heat their homes, which caused production and sales of heat pumps to soar, setting a record for the technology last year.
But towards the end of 2023, clouds began to gather over the heat-pump boom.
German Economy Minister Robert Habeck is desperately trying to promote the use of heat pumps for heating German households. The Green politician is convinced the technology has the potential to create jobs in Germany while saving the climate.
Heat pumps, which utilize ambient air or groundwater heat, are low-emission — especially when the heat pump is powered by green electricity from a private photovoltaic system.
When Habeck and his Green Party became part of Chancellor Olaf Scholz's three-party coalition government in 2022, they successfully launched a campaign to change how Germans heat their homes, which caused production and sales of heat pumps to soar, setting a record for the technology last year.
But towards the end of 2023, clouds began to gather over the heat-pump boom.
German Economy Minister Robert Habeck is desperately trying to promote the use of heat pumps for heating German households. The Green politician is convinced the technology has the potential to create jobs in Germany while saving the climate.
Heat pumps, which utilize ambient air or groundwater heat, are low-emission — especially when the heat pump is powered by green electricity from a private photovoltaic system.
When Habeck and his Green Party became part of Chancellor Olaf Scholz's three-party coalition government in 2022, they successfully launched a campaign to change how Germans heat their homes, which caused production and sales of heat pumps to soar, setting a record for the technology last year.
But towards the end of 2023, clouds began to gather over the heat-pump boom.
Manufacturers struggle amid market swings
According to a survey commissioned by the German newspaper Die Zeit, as many as 70% of Germans reject compulsory regulations on banning heating fired by oil or gas or paying for obligatory replacements of their heating systems.
Wolfgang Gründinger, a so-called chief evangelist at German greentech startup Enpal, says the complexity of the law and the heated political debate preceding it have had "an impact" on the current slowdown in heat pump sales. But things are already looking up again, he told DW. "We are seeing a rapidly growing demand and must continuously adjust our capacities to the rising interest."
Enpal is Germany's leading heat pump installer, with around 1,000 employees and revenue of €900 million ($1 billion) in 2023. Gründinger said Enpal would continue to work together with German and European heat pump manufacturers: "We have had very good experiences with our local partners so far and continue to trust their expertise."
And yet, news agency dpa reported recently that the situation looks quite serious for other competitors. Industry behemoths Stiebel Eltron and Vaillant are struggling amid the slump, envisaging three-digit job cuts in their heat pump units.
As German manufacturers struggle, competition is increasing from China.
Öko-Institut's Bei der Wieden is convinced though that German companies would still benefit from customers' "trust in local professionals" and their well-established networks of manufacturers in Germany. But "additional competition is beneficial," he adds, because there was still a market gap in Germany, especially for air-to-air heat pumps, which operate without a central heating system.
According to BDH, this month's opening of subsidy applications for bigger housing companies is likely to boost heat pump sales.
"We are cautiously optimistic that the second half of this year will see higher demand," a spokesman for the industry lobby group told German news magazine Spiegel. He expects sales to increase to 200,000 heat pumps by the end of 2024.