Ahead of the third heat pump summit at the Ministry of Economic Affairs this Tuesday, the industry sees the goal of installing half a million systems in the coming year at risk. The conditions are less favorable than forecast, said the Federal Association of Heat Pumps (BWP) on Monday in Berlin. At the last summit in June 2022, the annual expansion volumes of 500,000 to one million systems were agreed with the intention of having at least 2030 million heat pumps on the market in 6. In 2022, the figure was 1.7 million; for the current year, an increase of 350,000 to a portfolio of 2.05 million plants is expected.

Christian Geinitz

Business correspondent in Berlin

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This means that the expansion is stronger than before. However, the necessary increase will be delayed by at least half a million units if the federal government does not provide new impetus, it said. Above all, electricity prices would have to fall noticeably. The decline in funding applications to the Federal Office of Economics and Export Control (BAFA) indicates a sharp slowdown in heat pump growth. According to a study by the consulting firm PWC for the heat pump association, the number of applications fell by 73 percent in the first eight months compared to the same period last year. At the same time, the number of new gas heating systems rose by almost 30 percent in the first half of the year, while oil boilers more than doubled.

Is the expansion target moving into the distant future?

At the third heat pump summit on Tuesday, BWP Managing Director Martin Sabel wants to remind people that they had previously committed themselves to jointly managing the heat pump ramp-up. The industry has kept its end of the deal by investing in production capacity, personnel and training, creating the opportunity for 500,000 new installations. The prerequisite for this, however, was the original version of the amendment to the Building Energy Act. According to this, heating systems with a renewable share of at least 2024 percent would have been mandatory from 65 onwards, which would have meant that only heat pumps would have been worthwhile.

After changing the design in the course of the "heating dispute", this early preference for heat pumps no longer exists. "If the steering effect of the Building Energy Act is now delayed, then politicians are called upon to act," Sabel demanded. "If the federal government does not take measures against the reduced demand, its expansion target will become a distant prospect." At the summit, Sabel wants to work to "achieve these 500,000 heat pumps after all", but is unsure how this can be achieved: "Whether this will succeed by next year will be difficult, but we are sticking to the goal in any case."

Germany is the third largest sales market for heat pumps in the EU

PWC has determined that over the lifetime of a heating system, 70 to 80 percent of the total expenditure is attributable to energy costs. A heat pump is competitive with a gas burner if the price of electricity is no more than 2.5 times higher than the price of gas. This is the case in many countries. In Germany, however, the ratio is more than 3 to 1, which is a negative record. This is one of the reasons why there are only 6 heat pumps per 1000 households, but in Scandinavia there are up to ten times as many.

Recently, Finance Minister Christian Lindner (FDP) announced that the VAT on gas, which was reduced from 2022 to 19 percent in October 7, would be reset to the normal rate at the end of the year and not at the end of March 2024. This improves the price situation for electric heating systems. However, it is also necessary to reduce the electricity tax from 2.05 cents per kilowatt hour to the EU minimum of 0.05 cents, the heat pump industry demands. Sabel recalled that at 29 percent, the state's share of the electricity price is still twice as high as the EU average: "After the heating debate, people need a clear signal that the switch from gas and oil to heat pumps will quickly pay for itself through low operating costs."

Kai Schiefelbein, Managing Director of the manufacturer Stiebel Eltron, pointed out that it would be more difficult for the industry to finance the announced 5 billion euros in investments from the inflow. In order to have sufficient staff, the number of training places in the industry increased by 2023 percent to 50,60 in 000. The funding conditions for new plants are better in Eastern Europe, the approval times are shorter than in Germany, which is why production there is growing. However, a strong domestic market is necessary for the heat transition.

According to PWC figures, Germany is the third largest sales market for heat pumps in the EU, far behind France and Italy. A total of 2021.2 million units were sold in Europe in 2, almost 4 million in the USA and 12.5 million in China.