Energy transition: The heat pump disaster: How progress is being ruined in Germany

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Energy transition: The heat pump disaster: How progress is being ruined in Germany

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Anyone walking through the halls of Stiebel Eltron Holzminden would never think that the heat pump has a problem. It's the last few weeks of the year and 1,500 people are working hard at the heating engineer's factory. Copper pipes are being processed, fins are being installed, there is rattling and rumbling everywhere. Several dozen finished devices leave the company in Lower Saxony every shift, and yet the building seems to be bursting at the seams: entire pallets of parts have been moved to the yard.

However, Kai Schiefelbein, the boss of Stiebel Eltron, sits in the neighboring building and says matter-of-factly: "The first half of 2024 will be a bit tough for us." Schiefelbein is a qualified mechanical engineer and you can clearly hear his origins in the Ruhr area as he was born in Oberhausen. He says “for Nöppes” when something is cheap and “and off” when he wants to tick something off. And if something doesn't go well, he doesn't dwell on it for long: "We had a huge boom in 2022, and we experienced an even stronger boom in the first half of 2023. But now there is a very, very significant decline in demand."

Stiebel Eltron has been building heat pumps since 1976, longer than almost any other manufacturer in Germany. The Lower Saxony company had already specialized in the devices when the competition was still relying entirely on gas and oil. But we've never experienced a rollercoaster ride like the one we've experienced over the past year and a half here either. Schiefelbein calculates: Production is still running at full speed, but they are currently only ordering half as much as they are producing. As good as the present looks, the future seems uncertain.

All heat pump producers are currently feeling the same way as Stiebel Eltron. The Vaillant Group has registered short-time work for some of its employees; The industry giant Viessmann sold the business entirely to the US group Carrier. A look at the funding applications submitted to the Federal Office of Economics and Export Control (BAFA) shows how much companies have been shaken up in recent months. These show how many people in Germany are planning to install a heat pump: While an average of around 5,500 applications were received per month in 2021, the number shot up to almost 150,000 in August 2022. It is now back to around 8,000 per month - higher than before the boom, but still far from the record.

The heat pump was actually intended to advance the energy transition in Germany as quickly as possible. But if you look back at the last few months, you have to say: So far it has only worked out so well. Instead, what has happened since the beginning of 2022 is a textbook example of how a simple, sensible, long-standing product gets caught up in the storm of lobbying interests and political intrigues - glorified by some as a savior, by others demonized as God's blessing. There were months of wrangling over laws and funding, public campaigns, and a lot of uncertainty. And as soon as there was some clarity again in the fall about how the country could be heated in the future, the Federal Constitutional Court put a big question mark over the heating conversion with its ruling on the debt brake. How could all of this happen?

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