Air heat pump electricity price increased as of January 1, 2022

The state can only spend money that it has received elsewhere, i.e. through taxes.

I came across an interesting perspective this week: According to MMT (Modern Monetary Theory), it is exactly the opposite.

But nobody wants to pay those.

According to MMT, the money would be created (issuance of government bonds) and because it then circulates, they would simply be paid. (Contracted companies make profits and invest in turn, or pay their workers --> everyone pays taxes). It somehow makes sense, I just don’t agree yet with the consequence regarding inflation. I still need to read and think a bit more.

:

you see it from the wrong perspective!
The state is calling for electrification and green energy (which also makes sense).
And if you suddenly wake up and have to catch up on everything that has been neglected and done wrong in recent decades within a very short time, then the state has to support the implementation. Unfortunately, there is no other way.

Even after an energy renovation without changing the system, I heat with fossil fuels. So it doesn't help...
Luckily, according to your view, I am thankfully Austrian and not German ;)

Edit: I can also well imagine an energy solidarity surcharge for high earners. Nothing is set in stone, but I hope you will agree with me that the expansion of heat pumps must be promoted. The electricity price plays a big role in that.

The problem is actually also the delivery situation with the WPs. Do you have insights into the reasons (you’re still in the industry, right?) Is it still the chips? Or rather skilled workers? Or something completely different?

In terms of measures, on this side of my wet utopian dreams, I would initially see the renovation of old buildings. It seems to me to have the greatest leverage at the moment, at least according to the minmax principle.

MMT is basically Keynesian counter-cyclical fiscal policy at the central bank level. In bad times, the central bank acts expansively and provides cheap money. In good times, it then rolls it back and makes money more expensive so that it has powder left for the next crisis. In practice, it has the same problems: reactions take a long time, to truly react counter-cyclically you almost need clairvoyant abilities. And it is very easy to be expansive but much harder to reverse it. We are currently seeing that. Southern European debt crisis, Corona, Ukraine war. The low interest rates from the first crisis should have been raised years ago. The zero interest rates from Corona probably should have been rolled back at the beginning of 2021. But no one did that at the time. All the bazooka, boom, and double boom packages fueled inflation. You can create money out of nothing but not value. If you increase the money supply but the existing goods and services remain the same, then you have inflation. Now the central bank has to tighten money to slow down inflation and is effectively working cyclically.

The state calls for electrification and green energy.
And if you suddenly wake up now and have to catch up on everything that was neglected and done wrong in recent decades in a very short time, then the state has to support the implementation. Unfortunately, there is no other way.

It may support, but in the right place. Simply distributing money drives prices up and in the end, nothing is gained. It would be more sensible to create the conditions for good economic activity: training skilled workers, faster approval procedures, less bureaucracy. Create the conditions so that people not only have the infrastructure of others placed in front of them but also benefit from it. And yes, in some cases money can also be paid out, but only targeted, not with a watering can. And yes, all of this simply takes time. Using brute force will only make it more expensive, not faster and certainly not better. Instead of forcing a heat pump into every 1970s building that then has to cover a heating demand of 200-300 kWh/sqm with an annual performance factor of 2, one should start with energy demand. If I go from 300 to 80 kWh, then I have saved a very large part of gas/oil.

The problem right now is precisely the supply situation with heat pumps. Do you have insights into the reasons (you’re still in the industry, right?) Is it still the chips? Or skilled workers? Or something completely different?

In terms of measures, on this side of my wet utopian dreams, I would first see the renovation of old buildings. To me, that seems to have the greatest leverage at the moment, at least according to the Minmax principle.

The supply situation is getting better. However, there will still be a shortage of materials and skilled workers in the future. We will shift our capacity to 90% heat pump production. It just takes a bit of time...
The day before yesterday was the heat pump summit with Robert Habeck, where quite a few things were decided. You can find the paper and video on the BMWK homepage.
The biggest problem with existing building renovation, in my view, is in large cities. Where to put the big heat pumps? Not to mention the historic preservation in cities like Munich, Hamburg, etc.

He can support, but in the right places. Simply handing out money drives prices up and in the end, nothing is gained. It would be more sensible to create the conditions for good economic management: training skilled workers, faster approval processes, less bureaucracy. Creating the conditions so that people don’t just get other people’s infrastructure put in front of them but also benefit from it. And yes, in some cases, money can also be paid out, but only targeted, not with a watering can. And yes, all this simply takes its time.

Yes, exactly, but these are also political issues, whose costs should only be partially passed on to the end customer.
Everyone cares most about their own wallet. That’s why a cheap heat pump tariff and subsidies for the investment are a very good lever to motivate people to participate.
The investments and subsidies of the past were more in the spirit of the watering can, if I think of the Baukindergeld alone :rolleyes:
A cheap heat pump tariff would be targeted and by far not a watering can principle.