A crisis hits the heat pump market: these giants are laying off en masse!

The European heat pump industry is currently going through a major crisis. For the first time in 15 years, sales fell in 2023, according to Jozefien Vanbecelaere, head of European affairs at the European Heat Pump Association (EHPA).

This situation has led to the elimination or temporary suspension of 3,000 jobs in the sector, as investments in production capacity have outstripped demand.

Falling sales and mass layoffs

Based on 2023 sales data from 14 countries representing 90% of the European heat pump market, the number of units sold fell by 5% by 2022. European manufacturers, who had invested in the expectation of a boom in demand, have reacted to this decline by cutting jobs: a total of 3,000 to date.

For example, Vaillant, the German heat pump manufacturer, has sent 100 workers to Kurzarbeit at the end of 2023 - a kind of short-time working where employees see their working hours reduced. "We are seeing a clear downturn in the European heat pump market, particularly towards the end of the year," said Gerteric Lindquist, CEO of Swedish heat pump manufacturer NIBE, when announcing the redundancies. (500). Daikin is laying off 500 people in Belgium, Stiebel Eltron is planning 800 job cuts, Saunier Duval is planning 500 redundancies, and Atlantic 500 redundancies.

Causes of this crisis

The slowdown in demand and job cuts in the sector are attributed to several factors. In particular, EHPA points to political uncertainty surrounding heat pumps, stalled action plans and consumer reluctance towards this technology. Added to this is a fall in gas prices, which makes the competitiveness of heat pumps less obvious.

The European Commission has also postponed the development of an action plan to stimulate the heat pump market. This decision could significantly delay the presentation of any initiative, possibly beyond the European elections in June 2024.

Direct impact on quarterly sales

  • European heat pump sales down 14% year-on-year
  • Loss of market momentum and difficulties for major industry players
  • Slower investment and a potential brake on innovation

What does the future hold for the European heat pump industry?

Faced with this crisis, heat pump manufacturers are looking for solutions to boost demand and stabilize the market. Support measures are expected from the public authorities, such as tax or financial incentives to encourage the installation of heat pumps in homes.

Ideally, consumers should also be informed and made aware of the benefits of this technology in terms of thermal comfort and energy savings. This includes combating preconceived ideas and disincentives to adoption, as well as providing clear, transparent information on installation and running costs.

Ways out of the crisis

  • Government intervention to support companies in the sector
  • Introduction of tax and financial incentives for individuals
  • Informing and raising consumer awareness of the benefits of heat pumps

Julien G.

Juliena mechanical engineering graduate and specialist in climate engineering since 2009, has become a writer specializing in renewable energies, with expertise in heat pumps and photovoltaic solar panels for individual housing.
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