Stiebel Eltron produces one of Robert Habeck’s dream products: heat pumps. But when the economics minister visited the company, he found no industry booming. He would like to change that.
Robert Habeck is enthusiastic about heat pumps, to an almost astonishing extent. “A super product made in Germany that pays off in every respect,” is how he describes the systems that use heat from the air, groundwater or soil. The months of wrangling over the heating law last year caused him massive damage.
A year later, Habeck, tanned and in a good mood, went on the offensive. He spent three days on a pump tour through northern Germany. He set the tone during a factory visit to the heat pump specialist in Holzminden, Lower Saxony: “The heat pump ensures that the value of buildings increases. A heat pump saves money.”
Heat pump sales collapse
The industry can make good use of such support, if it helps. Sales of the devices have recently plummeted, and the federal government’s target of 500,000 heat pumps installed annually from 2024 is likely to be missed by a wide margin in the first year.
According to figures from the Federal Association of the German Heating Industry (BDH), just 90,000 heat pumps were sold in the first half of the year. This is a decrease of 54 percent compared to the same period last year. The BDH expects a maximum of 200,000 heat pumps to be sold by the end of the year.
This also applies to Stiebel Eltron, where around 25 representatives from IG Metall and the works council have gathered for Habeck’s visit, fearing for their jobs. “We just want politicians to keep their word,” says Holzminden works council chairwoman Elke Grimme. It’s all too unpredictable, she says, pointing to the recent cuts in funding for energy consulting. Electricity prices also need to come down. Habeck is discussing things with Grimme and her colleagues on the forecourt.
Stiebel faces job cuts
The company will not be able to avoid job cuts, admits the chairman of the supervisory board, Ulrich Stiebel – although not on the scale of 1,000 jobs that the “Handelsblatt” wrote about. Since March, part of the workforce has been on short-time work. According to company spokesman Henning Schulz, Stiebel Eltron has around 2,600 to 2,700 employees at its German locations and around 5,500 worldwide.
The cake has become smaller, but Stiebel Eltron now has a larger piece, says Schulz. His company has had no choice but to create a massive number of jobs in recent years. “They snatched the heat pumps out of our hands.” Without the growth, they would have lost market share.
The current downturn follows a record year: 356,000 heat pumps were sold in 2023. And the slump is also affecting gas heating systems, with sales falling by 42 percent to 223,000 units in the first half of the year. For buyers last year, the sharp rise in gas prices as a result of Russia’s war of aggression against Ukraine is likely to have played a role – but also uncertainty about the heating law that was hotly debated at the time.
The new heating law generally stipulates that from 2024 onwards, every newly installed heating system must be powered by 65 percent renewable energy. However, the regulations initially only apply to new buildings in a new development area. Heating systems that are already functioning can continue to be operated. In many municipalities, it is still unclear whether district heating could be an alternative for those affected.
Industry worried
The entire industry is worried. “The current market situation is a challenge for the heating industry,” says Markus Staudt, CEO of the German Heating Industry Association (BDH), when asked by the dpa. Many companies have made extensive investments in expanding their production capacities over the past two years in anticipation of a politically desired development.
The extent to which the market slump affects individual companies also depends on the degree of specialization and the strategy adopted. “This has currently led to far-reaching measures regarding the use of short-time work programs and other cost-saving measures.”
How far these need to be expanded or tightened depends on 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 so far we have not seen any signs of a significant improvement.” The increase in approved funding applications in June alone gives us cautious hope.
Dent not only at Stiebel
Stiebel is not the only one struggling. Bosch’s air conditioning subsidiary has recently seen a significant dip in heat pump orders. According to previous information from division head Jan Brockmann, demand in this country fell sharply at the end of 2023 and at the beginning of this year – partly due to the long-unclear heating subsidies and the crisis in the construction sector. However, he was cautiously optimistic about the second half of the year.
At the beginning of the year, Bosch CEO Stefan Hartung criticized the fickleness of politics on the subject of heat pumps as “poison for long-term purchasing decisions.” With the full effect of the Heating Act in the second half of the decade, the Swabian technology group expects a sustainable boost for electrification in the heating market. The Bosch Home Comfort Group, which was called Bosch Thermotechnik until spring 2023, does not disclose sales figures.
Bosch remains confident
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 to be built in Poland by 2027. Job cuts, as in other Bosch divisions in Germany, have not been an issue recently.
On the contrary: At the end of July, Bosch announced the largest acquisition in the company’s history in the heating, ventilation and air conditioning sector. The group is taking over parts of the Irish building technology group Johnson Controls for 7.4 billion euros – in order to position itself better globally, among other things. The company assumes that the global market for products in this area will grow by 40 percent by 2030.
Short-time work at Vaillant
The heating technology manufacturer Vaillant is also struggling with the slump in sales. In mid-May, the family-owned company announced that it wanted to cut around 700 administrative jobs worldwide, 300 of them in Germany. The reason given was that the company wanted to adapt to the new demand situation and future market and customer requirements.
The subdued demand is also having an impact on production at Vaillant: In mid-July, the managing director of Vaillant Germany, Tillmann von Schroeter, told the Ippen media house that around 100 people in parts of the production department 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 continued in the interview.
Source: Stern
