Thermondo enters the heat pump market from LG Electronics

Düsseldorf The founder of Thermondo, Philipp Pausder, does not lack self-confidence. “We are Germany’s best chance for six million climate-neutral houses by 2030.” – says the head of the heating platform after entering the market in the heat pump industry. Thermondo now also offers the installation of electrically powered heaters.

So far, a young company, founded in 2013, has focused on oil and gas boilers in the field of heating substitutes. However, the Minister of Economy, Robert Habeck (the Greens), wants six million heat pumps to be installed in Germany by 2030. According to the Federal Association of the German Heating Industry, in 2020 it was just over a million.

Thermondo wants to get involved in a special offer in a growing market segment: heat pumps for rent. Customers pay at least 159 euros per month for this. “Not every homeowner has € 25,000 in cash to buy a heat pump,” says Pausder. “Thanks to the rental model, the target group grows larger.”

The founder of Thermondo formulates this as a challenge for established suppliers: “Our ambitious target for 2023: We will install almost 10,000 heat pumps.” In a growing market, they want to be a clear market leader as well as grow by 50 to 70 percent each year. The sales increase of 53 percent was already achieved last year.

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However, with this goal in mind, Thermondo is still far from leading the market. According to the Federal Association of the German Heating Industry, a total of 154,000 heat pumps were installed in Germany last year.

“Asians can flood the market with cheap heat pumps”

According to the industry, the manufacturer Viessmann itself probably produced a large proportion of the devices recently installed in Germany. A few weeks ago, the company announced that it would invest a billion euros in air conditioning and heat pump solutions. For this money, Viessmann transforms its production capacity from gas and oil heating systems to heat pumps, which require a much larger production area.

Vaillant and Stiebel Eltron are also producing many times more units than the Thermondo, which they want to install by 2023, insiders say.

The industry, however, is concerned about Asian corporations that are breaking into the German market with heat pumps – including Thermondo’s partner LG Electronics. The Korean conglomerate has yet to emerge as a major player in Germany, says an industry member.

And elsewhere in the industry it is said that Asian competitors could practically flood the market with cheap heat pumps. “Then tens of thousands of jobs in Germany would be at risk, and a well-meaning German climate policy would do harm to the German heating industry,” explains an insider.

According to their own statements, German companies are pioneers in Europe when it comes to oil and gas heating systems. On the other hand, the competition in the heat pump industry is much tougher. Asian companies, such as Mitsubishi Electric and Daikin, which previously sold air conditioning systems on a large scale, also often penetrate this market segment.

“LG Electronics is one of the largest manufacturers of compressors and batteries in the world”

The threat of competitive pressure brings back memories of cheap solar modules from China. The market for German solar PV systems collapsed massively for almost six years in 2012. Competition with Chinese suppliers has led many producers to bankruptcy.

Not all heat pumps are created equal. The devices differ, among other things, in the refrigerants used in them. Some substances can also evaporate at low temperatures, thereby extracting heat from the outside air. When the gaseous refrigerant is compressed again in the heat pump with the aid of the compressor and thus re-liquefied, it transfers its heat to the heating circuit.

Refrigerants have different ‘Global Warming Potentials’ (GWP), ie a different greenhouse effect if released into the environment. For example, LG Electronics wants to use R32 refrigerant with a GWP of 675 in its heat pumps for Thermondo. Founder Philipp Pausder says: “The R32 is much easier to handle than propane.”

However, the natural refrigerant propane (also known as R290) has only a GWP value of 3. It is used, for example, in the newer Viessmann heat pumps.

>> Read here: Rising heating costs: is the heat pump worth it now?

But Pausder is convinced he has found a valuable partner: “LG Electronics is one of the largest manufacturers of compressors and batteries in the world.” The manufacturer’s heat pump can even heat the interior at an outside temperature of minus 15 degrees without the use of a heating element. Very cold winter days usually bring heat pumps to the limit.

Thermondo as a bridge between a strong producer of heat pumps and German industries

The founder of Thermondo is also confident that LG Electronics can deliver the agreed quantities of heat pumps despite ongoing problems in the global supply chain and shortages of materials.

For LG Electronics, Thermondo offers access to the German market, which many Asian heat pump manufacturers hardly have. Unlike local heating engineers, they have not trained craftsmen for decades and thus have teamed up with companies that prefer to then install their products.

Thermondo can serve as a bridge between a strong producer and German craftsmanship. This is becoming increasingly important in the face of the growing shortage of skilled workers in the country. “We have 250 to 300 craft applications per month and employ up to 25 craftsmen per month,” says Pausder.

However, Thermondo also has problems filling all the vacancies. According to Pausder, the company currently employs 670 people, but would like to have 800.

More: Gas heating, heat pump or wood pellets? This is the best way to keep consumers warm in the future

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