Impact of CO2 tax and recommendation.

Question

- If we consider both total costs of ownership equal (and drop the 40 € difference), the CO2 tax indeed gives a positive impact. Without the tax the conventional heating would be cheaper. With the tax, the consumers are indifferent in terms of overall costs. Thus, it is possible to derive that the tax has a positive impact, right?

- The recommendation only considers actions of the government. Isn't it more the task to advice what our client can do? E. g. develop cheaper heating pumps in terms of installation and efficiency, use scale effects with more sold pumps, promote green energy, etc.? There is much potential in the market since only 0,35 Mio. households use energy pumps yet.

Answer 1

Getting to indifference is unlikely to drive significant market adoption, but it certainly helps by removing the cost disadvantage for heat pumps. In you brainstorming towards the end (and in the recommendation), I would highlight both government and client-driven actions to promote market share gain:

Government actions: revised CO2 tax, no VAT, rebate on system costs, low-cost financing to improve total cost of ownership
Client-driven action: partner with manufacturers to get discounts on bulk purchases for their customers (E.ON is a utility, so it won't be able to drive down manufacturing directly), partner with installation vendors to help drive costs down, customer education on the benefits of heat pumps, bundling solutions (e.g., European companies like Octopus Energy provide packages that include installation, maintenance, and energy supply, simplifying the transition for consumers and ensuring system efficiency)