Since 2017, a key objective of President Emmanuel macron’s administration has been to reverse France’s deindustrialization and foster reindustrialization. Air-water heat pumps (CAP) emerged as a focal point,championed as an efficient alternative to traditional fuel oil and gas boilers,experiencing rapid growth post-COVID-19.

In 2023, the government announced a plan to increase domestic CAP production tenfold, aiming for one million units by 2027.This initiative, unveiled in April 2024 by then-Minister of the Economy Bruno Le Maire and Minister Delegate for Industry and Energy Roland Lescure, sought to anticipate growing demand across Europe, offering tax credits to incentivize company investments and create over 15,000 jobs (excluding installers).

Overcapacity and Production Slowdown

Several factors have hampered the sector’s momentum,including rising electricity costs,competition from gas boilers,uncertainty surrounding individual aid programs,and a general downturn in the construction and renovation sectors. Consequently, CAP sales in France fell by nearly 50% in 2024 compared to 2022. According to a source at the Ministry of Industry, the challenge now is to revive demand. The professional union for the sector, Uniclima, anticipates that 2025 will remain a difficult year.

Last year, French production reached approximately 170,000 units, down from 200,000 in 2023. Despite significant investments in 21 French factories, current production capacity stands at around 500,000 heat pumps annually, leading to overcapacity. Manufacturers have responded with measures such as partial unemployment at Atlantic’s Pas-de-Calais facility and a job protection plan affecting 225 of 730 employees at Saunier-Duval’s Nantes site.

“We have never had as many aids as today.”

shifting Production from Alsace to Slovakia

In the Bas-Rhin region, Bdr Thermea (Dietrich group) announced the closure of its Mertzwiller industrial operations by mid-2027, resulting in the loss of 320 jobs.According to Philippe Lazarus, a worker delegate at the factory, this decision is a significant blow, as the factory had previously been designated as the center of heat pump jurisdiction, leading to massive hiring and the establishment of five production lines. production is slated to move to Slovakia, with another line dedicated to hot water tanks relocating to turkey.

Conversely, in Saône-et-Loire, the Vendée-based Atlantic group is proceeding with the construction of a factory expected to employ 300 people and produce 150,000 units by 2027. This investment of approximately 140 million euros, supported by state tax credits for green industry, reflects a belief in the market’s eventual recovery, as stated by the group’s general manager in november 2024.

The government remains committed to its goal of one million heat pumps by 2027, with recent decrees aimed at boosting the market through energy savings certificates.