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Global Economy

Who makes the heat pumps?

By Antonia Mannweiler,

According to the ambitious goal of the Ministry of Economics, there should be six million heat pumps in Germany by 2030. According to the Federal Heat Pump Association, only 154,000 heating heat pumps were sold nationwide last year – that was still 28 percent more than in 2020. The figures for the current year are likely to be significantly higher.

In order to achieve the goal, all manufacturers have to increase their production capacities significantly. Just four years ago, the global size of the heat pump market was almost 55 billion dollars. Depending on the estimate, it could swell to $95 billion to $100 billion by 2026.

There are currently a large number of heat pump manufacturers in Germany. The best known and largest include Bosch Thermotechnik, Stiebel Eltron, Vaillant and Viessmann. But there are also many smaller and less well-known companies that build heat pumps.

Bosch thermal technology

Bosch Thermotechnik is a subsidiary of the Swabian supplier giant Bosch. The group's heating division emerged from the takeovers of Buderus and Junkers, among others. Bosch Thermotechnik is now one of Europe's largest heating manufacturers.

The heating subsidiary wants to invest 300 million euros in the heat pump business by mid-2025. In 2021, the company generated almost five percent of the sales of the entire Bosch Group. Last year sales increased by 13 percent to more than four billion euros for the first time. The demand for the heat pumps in the product portfolio has increased by 38 percent.

Even if the heating engineer Viessmann from North Hesse offers other products such as pellet heating systems: The current bestseller is advertised directly on the home page. "The clever heat pump thinks about the future," it says. Viessmann is currently one of the best-known heating manufacturers in Germany. The company is currently benefiting greatly from the high demand for heat pumps – in the past, this was weaker than in other European countries, for example, due to the even lower gas prices.

The company has been around for more than 100 years. Johann Viessmann, who was actually a master locksmith, founded the company with the development of a steel boiler. It is now managed by the fourth generation – by Max Viessmann. The old steel boilers have been replaced by air-to-water heat pumps, for which demand has exploded. Last year, the family business from Allendorf an der Eder sold 41 percent more heat pumps than in 2020. Total sales climbed from 2.8 to 3.4 billion euros.

The heat pump business is also booming; To this end, the company with 13,000 employees recently announced a major investment of one billion euros over the next three years in order to invest in the expansion of heat pumps and in green climate solutions. The company achieves more than half of its sales outside of Germany.

The founding of another large German heating manufacturer goes back even further: in 1874, Johann Vaillant laid the foundation for today's heating company, which, like Viessmann, is still family-owned. At that time, the company was still founded as a craft business – today it mainly stands for the production of heating, ventilation and air conditioning technology. In addition to heat pumps, the company from Remscheid in North Rhine-Westphalia also offers gas heating and photovoltaic systems.

The company with the eye-catching hare in front of an egg in its logo is currently active in more than 60 countries. Vaillant and Viessmann are not only similar when it comes to the first names of the two founders. In 2021, the group achieved sales of 3.3 billion euros. Sales of electric heat pumps increased by more than 50 percent compared to the previous year.

Stiebel Eltron

The Stiebel Eltron company from Holzminden in Lower Saxony is also one of the largest heat pump manufacturers in Germany. In 1924 Theodor Stiebel founded the company with the invention of the ring immersion heater. In the early 1970s, the company started to produce heat pumps.

Last year, the company with 4,000 employees worldwide generated sales of more than 830 million euros. According to Stiebel Eltron, incoming orders for heat pumps have doubled within a year. The company plans to more than triple heat pump production capacity at its headquarters by 2027. For the expansion and for investments in research and development in this area, the company is investing 600 million euros. In addition, 400 new jobs are to be created in Holzminden.

Smaller manufacturers in Germany

The cake of the heat pump market is already divided among many companies, says Peter Schossig, Head of Thermal Systems and Building Technology at the Fraunhofer Institute for Solar Energy Systems ISE But the three largest companies – Vaillant, Viessmann and Bosch – are likely to share a significant portion of the market.

In the second row there are companies like weishaupt or WOLF, which sell several thousand heating systems. Among them there are again hundreds of smaller companies, which will probably have a much harder time in the future, according to Schossig.

industrial production

A cleanup is currently taking place on the market, says Schossig. All manufacturers are currently benefiting from the high demand and recording high growth rates. However, if the market grows by 30 percent and your own sales by only 15 percent, this still means that you are losing shares to the competition. At the moment things are going well, says Schossig. In six years, however, things will look different.

In the past, the large manufacturers also produced smaller quantities – the price difference compared to the smaller companies was not that big, says Schosser. But now the larger heating manufacturers have announced that they will invest hundreds of millions of euros in the locations and build automated production lines. Schossig believes that industrial production will change the situation for smaller manufacturers. Then you might have problems. In return, the heat pumps would be cheaper for consumers. The market is currently overheated with the high prices.

International manufacturers

The Swedish NIBE Group is one of the largest European manufacturers of heat pumps. Both alpha innotec and Novelan produce heating systems under their roof. Outside of Europe, the Japanese group Daikin Industries, based in Osaka, is one of the big players in the market. But companies like the Japanese Panasonic group or LG and Samsung from South Korea also produce heat pumps.

Companies like Daikin definitely have advantages in production with a large parent company behind them, says expert Schossig. The group traditionally comes from the refrigeration market. Daikin already produces millions of compressors, which are important for heat pumps.

"According to our basic assessment, the market in Germany is still dominated by German and European manufacturers," the Federal Association of Heat Pumps said on request. From Schossig's point of view, German industry still has a strong position on the European market. However, the pressure from Asia will increase.

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