The company will receive subsidies to expand heat pump production, but interest in them is currently at a standstill
The heat pump manufacturer, despite the low demand for these devices, is investing millions of euros in expanding their production. Additionally, they will receive a subsidy for the expansion of the factory in Lower Saxony.
Just a few months ago, many major manufacturers of heat pumps announced significant investments in expanding production and developing new products. Shortly thereafter, interest in heat pumps not only in Germany or the United Kingdom but also in other major markets dropped significantly. Companies thus began to announce reductions in production, withdrawal from major investment plans, and layoffs of employees. However, one German manufacturer still intends to invest in development and is planning to expand its plant, despite the ongoing lack of interest in heat pumps.
The company Stiebel Eltron, according to Handelsblatt newspaper, had planned to lay off a large number of employees as a result of the decline in demand for heat pumps. Currently, however, the same company is expected to invest millions of euros in expanding production, for which it will also receive nearly 11 million euros in subsidies.
According to Frank Doods, the state secretary of the Ministry of Economy in Lower Saxony, as reported by the German press agency DPA, support for the company is "an essential part of the strategy to support a climate-neutral and competitive economy".
The currently low demand for heat pumps, which the company produces at several branches, is expected by the market to reverse in the coming months and years. Heat pumps are currently considered almost the only possible alternative in replacing gas or fossil fuel boilers. Although their replacement is already underway, due to the pressure to reduce emissions, it is anticipated that the significant replacement of fossil sources is yet to come in the future.
For German companies involved in the production of heat pumps, air conditioning units, and other types of heaters, this is a necessary investment that should preserve their competitiveness in the coming years, despite the current low demand.
