Green technologies shortage looming in CEE

As several Czech media reported, local companies cannot cope with the current pressure on the market as there is high demand for solar panels and heat pumps among Czechs coupled with a lack of the materials and workers needed to meet demand.  [Shutterstock/Oscar Firme]

A boom in demand for heat pumps and solar panels combined with supply-chain disruptions is starting to cause severe material shortages in Czechia as producers focus on western European markets where consumers can pay more. Experts warn the problem is likely to spill over to other countries in Central and Eastern Europe, spelling possible trouble for the transition to a greener way of producing energy.

In most Central and Eastern Europe countries, gas plays an important role in the heating sector. With recent price hikes and the uncertain future of Russian imports, demand is rising for renewables both in companies and households.

As several Czech media reported, local companies cannot cope with the current pressure on the market as there is high demand for solar panels and heat pumps among Czechs coupled with a lack of the materials and workers needed to meet demand.

A change in the subsidy scheme recently boosted the high demand. While Czechia and Slovakia previously supported installations of gas boilers, the focus from now on will be heat pumps and other renewable sources.

“Cancelling the subsidy support for gas boilers and, on the contrary, increasing the subsidy for heat pumps does not solve the situation. The result is that people are responding with massive demand for renewables, while the supply market is not prepared for such an increase,” said Luděk Lošťák, owner of Zero living, a company that installs pumps and photovoltaics.

Richard Paksi from the Slovak interest group Buildings for Future warns that the problem may soon become visible in Slovakia.

“The Slovak heat pump market is five times smaller than the Czech one, and the gradual increase in demand has not yet fully manifested itself here as in the Czech Republic. So far, the Slovak market is coping, but it is likely that problems will soon occur as well,” he said.

Western market appeals more

Demand for heat pumps and solar panels is rising all over Europe. Finnish Environment Minister Emma Kari even labelled the installation of a solar panel or a heat pump a “patriotic act”.

With the rising demand comes the same fear as in CEE – that industry will not be able to cope. Worries come with the deteriorating pandemic situation in China, which exports an important component for heat pumps – cooling circles. However, countries like France or Germany currently don’t experience the same problems as Czechia.

Paksi explained that most producers currently focus on western markets because it is simply more lucrative.

“The biggest barrier for Slovakia or Czechia is the high investment intensity of the technology,” he said.

“In Western countries, households don’t have a problem with paying for a heat pump. Today’s subsidies from the (Slovak) Green Households programme, which offer a maximum of €3,400, are insufficient as the price of high-temperature systems like heat pumps is around €15,000,” Paksi added.

Are solar panels next in line? 

“Problem with the supply of components and installations of solar panels and photovoltaics is not as dire as in the case of heat pumps,” said Ján Karaba, director of Slovak Photovoltaic and RES Industry Association (SAPI). However, delivery times for materials and equipment have also risen by several months.

Karaba explains that the photovoltaic market is better protected as production capacities are significantly higher than in the case of heat pumps. Nevertheless, problems are on the horizon.

“There are difficulties with transport from China and also the production of aluminium profiles, which are used during the installation,” Karaba said.

“With the significant increase in interest in installing these sources, the need for skilled labour will also increase. Western member states are already experiencing a growing shortage and, in Slovakia, we are not prepared for this situation either,” he added.

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