Deloitte: Poland enters the phase of economic expansion

The divergence of economic moods in Poland...

Two Years On: War in Ukraine and Its Global Impact

On February 24, 2022, a full-scale Russian...

Heat Pump Sales Slump in Poland, Industry Calls for Government Action

ENERGYHeat Pump Sales Slump in Poland, Industry Calls for Government Action

The previous year was not successful for the heating equipment industry – admits the Polish Organization for the Development of Heat Pump Technology (PORT PC). Sales in this sector fell by over 30 percent, and in the case of single-family houses by approximately 40 percent. The President of the organization’s board is hoping for an active government policy. Among potential solutions, he mentions, among others, the introduction of a special tariff for heat pumps and a reduction in VAT on electricity. He estimates that under favourable circumstances, heat pump sales in 2024 could increase by 20 percent.

Sales of heating devices in 2023 experienced a clear decline. On the scale of the entire market, it shrunk by over one third. In the segment of single-family buildings, declines were about 40 percent compared to 2022. The heat pump market also experienced a strong slowdown of 41 percent. Only ground pumps saw a positive trend with a 12 percent increase. PORT PC attributes such state of affairs to the unfavourable situation in the construction market, and the noticeable weakening of the economic situation, particularly in individual construction.

Industry representatives have no doubts that the poor sales results for 2023 are due to uncertainty about electricity bills.

“Firstly, the prices of energy and essentially the scaremongering about electricity prices, even though the facts contradict many theses, meaning, electricity prices really are significantly higher than two years ago, apart from the basic freeze. However, this year, at the beginning of January, we saw a reduction in energy prices in the G12w tariff, commonly used in heat pumps, and this was a decrease in prices, together with distribution, of several up to even 17 percent in the case of Tauron. So, we clearly see a reduction in energy prices,” said Paweł Lachman, President of the Board of the Polish Organization for the Development of Heat Pump Technology (PORT PC).

PORT PC also points to the lack of a decisive and clear information policy that would clearly present prospects for energy price developments. The organization also emphasizes that many publications still scare of future electricity price increases.

“Overall, the year 2024 for the heating equipment industry is a period of anticipation, and the heat pump industry feels it clearly. First of all, changes are still happening in the Clean Air program in terms of requirements related to subsidies for heat pumps and those devices that are subject to testing in accredited laboratories, it’s about the ZUM list, green technologies in the Clean Air program, but also the obligation associated with testing in accredited laboratories,” says Paweł Lachman.

Consumers still refrain from investments also due to the persisting uncertainty as to the future prices of electricity and other carriers.

“There are announcements from the election campaign, but many potential investors are simply holding back with investments,” adds president of PORT PC.

Among other reasons, the industry is encouraging the government to actively promote and implement policies that encourage investments in heat pumps.

“We call for special tariffs for heat pumps to be prepared, as in other countries, so that when someone installs a heat pump, they enter this tariff, this tariff should also include certain benefits resulting from the flexibility of heat pumps when it comes to the electricity grid. We appeal for this and I hope that we will be heard, because heat pumps are quite an important, actually key technology in the field of energy transformation, not only in the European Union, but in the world in general,” the expert postulates.

Such action was already announced in the election campaign before the autumn parliamentary elections. The PORT PC reminds us of the postulates of the Civic Platform and hopes that they will be fulfilled still in 2024. The financing source for such actions could be proceeds from the emission tax. But, this is not all the ideas. Another solution, pointed out by Brussels already in 2022, is to reduce VAT on electricity to 5 percent.

“The European Commission has encouraged member states to follow this path. But really, it’s about a comprehensive approach, because heat pumps are heating technology using renewable energy sources, since 2/3, and with higher efficiency 3/4 of the energy transferred by the heat pump, come from renewable energy sources,” reminds Paweł Lachman.

According to data from the Central Register of Building Emissions from the first half of last year, solid fuel boilers are still about one third of heat sources in Poland. Over half of these are coal-fired installations. As of April 2023, over 300,000 households were using heat pumps. This translates to a symbolic percentage of 2-3 percent of all heated buildings.

The industry has high hopes associated with the publication of the “Action Plan for the Promotion of Heat Pumps” being created at the EU level. It is known that the document will appear with a delay, but it should still happen in 2024. The EU wants to indicate the best possible strategies and coordinate actions for popularizing heat pump technology this way.

Support for the sale of heat pumps could be funds from the KPO, which is to be allocated, among others, to investments serving the energy transformation and the development of renewable energy sources. The funds would therefore go to the implementation of the Clean Air program by the National Fund for Environmental Protection and Water Management (NFEP&WM). The industry points out that subsidies for investing in heat pumps require systemic changes.

“Changes are needed in the increase in requirements for larger funding, ensuring that a building isn’t an energy vampire, meaning an energy audit is necessary. It is also necessary to increase requirements for the companies that perform this, because many irregularities associated with the third group of subsidies in the Clean Air program have appeared, where the subsidy is 100 percent to the net amount, and at the same time, a prepayment of 50 percent is possible. This is mainly beneficial for these companies, and I think that changes in the area of the third group of subsidies are necessary,” claims the president of PORT PC.

The Polish Organization for the Development of Heat Pump Technology, in its optimistic forecast, expects that in 2024 the industry will record an increase in equipment sales by up to 20 percent. Such a projection will be possible if several key conditions are met, such as stability and predictability of electricity prices.

Check out our other content
Related Articles
The Latest Articles