A lot of money helps a lot, seems to be the credo of the federal government when it comes to promoting environmentally friendly heating systems. A closer look reveals that this is not entirely true. The state has been providing financial support for the heating exchange since 2021. Anyone who disposes of a gas heating system that is at least 20 years old and installs a heat pump for it, for example, can have 40 percent of the costs paid by the federal government.
In fact, it cannot be denied that heating contractors have sold significantly more heating systems in the past two years than before. And sales of heat pumps in 2022 were more than 50 percent higher than in the previous year. However, it is questionable how much this is due to state funding. If you believe consumer advocates and other industry experts, the fear of a gas shortage in Germany and gas prices that were too high made people switch to electricity-powered heating systems last year.
What can be clearly seen, however, is that heating replacements are becoming more and more expensive. Because the prices of heating components are rising, as are the prices for the finished heating device and the services of the installers. Craftsmen make offers that are 50 percent or more above the usual market price. It doesn’t help consumers much if the state pays 40 percent of the costs.
The reason: the demand is too high for the supply. Heating manufacturers and installers cannot keep up with the construction and installation of heating systems. When manufacturers charge exorbitant prices for their devices and craftsmen for their service, it is a mixture of necessity, skimming off profits and self-defence.
Injecting even more subsidies into such a market is dangerous. According to media reports, the CDU wants to subsidize climate-friendly heating systems with at least 50 percent of the costs. According to current knowledge, this is hardly the right way.
Discounted electricity might help
A more sensible approach could be to make electricity cheaper. Because that makes heating with heat pumps cheaper in the long term, so the expensive initial investment is more bearable. If financial aid is also to come into play, it is important to use it specifically for the people who really need it.
And then of course there are the craftsmen. It must be possible to train and deploy them in such a way that they can better cope with the flood of orders in the future. Previous announcements by the federal government go in the right direction. Now it remains to be seen whether she will actually implement her support plans in a meaningful way.
More: Why state funding hardly reaches the citizens