Take advantage of opportunities

In the run-up to ISH, which will be taking place in Frankfurt am Main from March 13-17, we talked to two experts from the fields of HVAC and bathroom fitting, Jens J. Wischmann, CEO of Vereinigung Deutsche Sanitärwirtschaft e.V. (VDS), and Claudio Paulus, who is on the management board at heating and air conditioning firm E. Engelhardt GmbH + Co.KG. In the interview, the two talk about how things currently stand and about what areas will be gaining in importance.

Anna Moldenhauer: How has the sector changed since ISH 2019 in your opinion?

Claudio Paulus: Of course, there have been a great many developments, particularly in the field of heating and then especially in terms of heat pumps, sustainable heating systems, and energy-saving heating systems. A lot has indeed altered in these areas. By comparison, the sanitary sector has some catching up to do. Here, we are more likely to find isolated measures for saving energy, e.g., using water-saving aerators or water-saving showerheads but these have no impact on the situation as a whole. Moreover, we have no influence over whether their production is sustainable.

Jens J. Wischmann: I can understand Mr. Paulus – we want to use sustainable energy sources but transforming the way we produce it, in view of the war in Ukraine and its consequences, presents us with great challenges. Fortunately, we are not faced with the same kind of turmoil in the sanitary industry. The challenge here has more to do with the question marks surrounding the future quality of drinking water and the production of hot water – where to find the power to generate it. I do think that the subject of sustainability is now being addressed in the sector. The issues that beset us have to do with the future of drinking water, the stagnation of water in empty houses, and a functioning supply of cold water, even with thick insulation. Water shortages have never been an issue in Germany, but we are gradually realizing that even in our country there are regions confronted with such things, when there are droughts or where the ground has become contaminated. Companies tend to be better informed about this than consumers. When people are having a bathroom converted, sustainability is not always their first concern. Nor is where the materials were sourced or whether there is a recycling system in place. Nevertheless, the structures do need to change, in the companies, as well, both in terms of production and of technological developments. Publishing an environmental report simply isn’t good enough as a fig leaf. We are currently in the process of drawing up a sustainability report for the HVAC and bathroom fitting sectors, and our research has demonstrated just how manifold the commitment in the industries actually is. Trends have the potential to evolve, over time, into major forces for change, and I am convinced that in future the subject of sustainability will grow and develop greater momentum than has previously been the case in our sector.

Mr. Paulus, together with your brothers, you represent the third generation in your family-run company E. Engelhardt GmbH+Co KG, a HVAC business in Nuremberg. The services you offer range from new builds to modernization, to servicing and looking after your customers. What is it that you feel the latter currently require in this area?

Claudio Paulus: We sense a great uncertainty on the part of consumers, particularly in the field of heating technology, partly fired by announcements by the politicians about a possible ban on oil and fired heating systems. Many of them dread the thought of the expense involved in having to completely overhaul the systems they have, of having to install a heat pump and instead favor a modern version of their existing oil or gas heating. And so, despite the energy crisis, at present the demand for the latter kind of technology is currently on the rise, because it is familiar and is dependable as far as users are concerned. Of course, all we have is our perspective as a company that mainly operates in Nuremberg’s downtown – where classic apartment blocks with gas heating for the individual stories are the norm. It is difficult to integrate renewable energies into this kind of system. Moreover, a large number of owners’ questions regarding the concept of heat pumps remain unanswered – from the legal position to very practical matters such as how the system works with, for example, a sandstone façade, or how to avoid the operating noise disturbing residents. On top of this, there are strict regulations regarding spacing in the region here. Additionally, many of the district heating systems run on gas. I just don’t know what the advantage of this is meant to be. If the heat pumps are operated with coal-fired power stations, the approach is not sustainable at the end of the day. There is still a great deal of thinking to be done in order to lay clear foundations for the relevant financial investments.

Mr. Wischmann, is the complexity of the system and communicating it similar from your viewpoint?

Jens J. Wischmann: I am no heating expert but I have definitely received a good insight from my time at the trade association. I totally agree. The politicians have more ambitious aims but the devil is in the detail. We currently don’t have the power sources to be able to implement these measures quickly. What’s more, every building has its own ins and outs and needs an individual energy concept. A specialist fair like ISH is very important for exchanging ideas within the sector about the challenges that exist and how we can best combine what we have to offer. Both the sector and the consumers need the financial investments involved to be protected. What I am talking about here is long-term solutions – chopping and changing just won’t work here. You simply cannot put in a new heating system or a new bathroom every five years. I studied law and what I can say is you won’t inspire any trust by permanently changing laws. What is important is security and a planning horizon. That’s what we need from the politicians, for them to restore that sense of security, The sector is ready to develop the right solutions for this, both on the product side and on the installation side. However, what we need for this is the right basis.

Do you find the incentives currently on offer to the sector for sustainable solutions adequate?

Claudio Paulus: I am not a big fan of incentives in the form of grants because as a rule they are reflected in product prices. Just making overhauling such systems tax-deductible would be much more meaningful because then the market price of a product would be justified. Those who invest in the kind of energy that is supplied to their houses should also benefit from this, for example as part of a government grants scheme. Currently, the additional costs incurred by using a heating system based on renewable energy sources are not completely covered by such schemes. In my opinion, a simple system such as a government grants scheme for modernization would be better than the kind of schemes currently on offer from the German Reconstruction Loan Corporation and the Federal Office of Economics and Export Control.

What do you think Mr. Wischmann?

Jens J. Wischmann: Absolutely. I also favor making such systems tax-deductible, even if the politicians are against it. People often say: “it is only those who pay taxes who will benefit from tax deductibility”. However, homeowners also play taxes. I welcome grants but in terms of regulatory measures I am, like Mr. Paulus, of the opinion that such things inflate product prices. It helps everybody when we cut subsidies and instead ensure that our citizens have more money in their pockets. Furthermore, encouraging sustainability with financial incentives is not the only concern. An awareness of the priority the subject must be given is equally important.

Claudio Paulus: To answer this question all I need to do is look at my nephew who represents the fourth generation in our family-run business – he has the clear expectation that we must dedicate ourselves far more to such issues than was previously the case. Another point is bathrooms that are also suitable for the elderly. A larger number of age-appropriate bathroom solutions will be a requirement in the near future. This is another area where we are hoping for new ideas from ISH, after all, bathrooms suitable for the elderly can certainly have aesthetic appeal. Moreover, it is immensely important to get young people excited about careers in HVAC and bathroom fitting, for example with the recent national apprenticeship initiative, encouraging the careers in the trades of HVAC and bathroom fitting currently on offer here in Germany both from the relevant central association, Zentralverband Sanitär Heizung und Klima, and from its regional associations. We look forward to a good dialogue and meaningful discussions, which will also get the general public interested in the opportunities that our sector has to offer.

Looking at ISH, the focus has changed considerably – in 2019 people were still talking about “Color in the Bathroom” and now the subject is, quite specifically, solving all the challenges connected with sustainability, the raw materials scarcity, supply bottlenecks and skilled labor shortages. What do you expect from ISH in 2023?

Jens J. Wischmann: What we hope for is that ISH will interest as many people as possible and show them that the issues we address help support everyone, the kind of issues that ensure that we stay warm, that our water supply works, and that we can remain in our own homes, even when we are old. Society expects a great deal of our sector, and we need a debate of this kind in order to find the right solutions. ISH is not just about new colors for taps but about optimizing systems, about new technical solutions. What’s available at ISH also touches on those existential questions in the sector – our worldview and what people are prepared to pay for hard work by people who are prepared to put in the effort. ISH gives us the opportunity to enter it in on a debate, one that should continue long after the fair itself is over.

I would like to look a little bit more closely with you at the issue of modernizing existing buildings. To what extent do you think there is any opportunity for the HVAC and bathroom fitting sectors to come up with suitable solutions to this?

Claudio Paulus: The HVAC and bathroom fitting industries play a very decisive role here, because the architects usually don’t have much idea about such practical things, that isn’t their job. This means that the planners and fitters who assist the architects with things like this need to be properly trained to be able to offer ideal solutions for conducting the appropriate refurbishments with bathroom equipment and HVAC.

Jens J. Wischmann: More than 70 percent of our business comes from renovation projects and refurbishment work. And it is absolutely essential to come up with concepts for existing properties that are also affordable. Furthermore, the trend with grants is towards apartment buildings. In Germany what we are looking for in the building sector is something like a golden goose and solves everything, from the direction of its windows to its installation, suitable for all age groups, accessible for the disabled, ecologically sound etc. etc. At the same time, we have put in place a regulation for every element, one which people are expected to adhere to. And as if this wasn’t enough, there are still the fire regulations to be taken into account. I sometimes think that we need to be more prepared to compromise with some things on our wish lists and instead think about new ideas for optimizing what we already have, e.g., modular design.

How sensibly can renewable energies be used by the industry at present?

Claudio Paulus: Of course, we attempt to deal with this matter as well as possible. The classic example is the solar system on the roof. This is a technology which has been perfected, is relatively uncomplicated and, now that even here our summers are very warm, almost all our hot water can be generated in this way. For heating, we are tending towards fuel cells, combined heat and power plants. But these are options that are currently still very cost-intensive because they are still at the pilot stage. No doubt there will be further developments in this respect but the supply channels still need to be adapted accordingly. In other words, if I want to push hydrogen instead of gas through a pipeline at some point in the future, I have a technical problem because hydrogen has much smaller atoms. The amount of hydrogen that can currently be added to a gas supply is relatively small, around 15 percent. We are right at the beginning of things there. Another possibility is biogenic liquid gas. This means that the relevant gas heating needs to be converted but is in theory possible. In general, I would say that there are a large number of ideas in the pipeline in the field of regenerative energies but there is a great deal of work still to be done there. And we are up for it.

Jens J. Wischmann: Lighthouse projects demonstrating that change is possible are always important at this juncture – projects such as “Roadmap H2E” for a hydrogen region in Emscher-Lippe, comprising a good 40 concrete projects. Something else that is very important is the courage to attach more importance to the positive impact of such campaigns than to profit. If the foundations are in place, the technology will prevail, this is something that we clearly witnessed in the development of solar technology. I now hope that we manage to go down that route towards a sustainable, self-sufficient energy supply without once again having to rely on a new government. Moreover, not only the HVAC and bathroom fitter sectors but also the electricians must have to have the capacities to provide customers with the relevant parts. The sooner the new solutions are available, the sooner they will be integrated into the various systems and the same applies to existing households.

Is there anything which you would currently want from your communications with architects and planners?

Claudio Paulus: An understanding and appreciation of our expertise in our fields. Architects are visual planners and for building services they should rely on our specialist knowledge – after all that is our job. Sometimes, architects refuse to acknowledge the fact that we understand technology, instead attempting to come up with the most hair-raising solutions and blame us when we have good reason for not wanting to implement them.

Jens J. Wischmann: We appreciate it when architects say “We have a good specialist technical partner for the facilities equipment or we have a good company for the necessary technical equipment. Our work is mutually beneficial.” Even right at the training stage, too little is made of integrative planning. Likewise, it is hard for a small to medium-sized HVAC or bathroom-fitting company to communicate either with end-users or with architects. Generally, there should be more openness and curiosity in the different fields about working together. Because we are putting up fewer new buildings in particular, and integrative planning process is crucial. And ISH is one of the things that contributes to this – because it offers the opportunity to find out more about those pivotal aspects.

Looking ahead – where do you currently see growth in the sector?

Claudio Paulus: In three areas: One is in the field of a sustainable energy supply, water heating systems, heating in general, there we are, as mentioned above, right at the beginning of the kind of radical changes which are bound to preoccupy us over the coming years. The second area remains bathrooms suitable for the elderly. We are an aging society and not everybody is prepared to move into a care home at some point or would be able to afford to do so. Therefore, it is all the more important for us to be able to look after ourselves in our own homes for as long as possible. We also need specialists who have been trained properly, people who are willing to accept the challenges involved, who bring the new technology with them. At the moment, our business employees 11 apprentices. In order to be able to maintain this level we rely on reliable support from the politicians, to some extent through campaigns that demonstrate that academic training is not the only route to success but that our German dual vocational training system culminating in a qualification as a “master” of a specific trade can be at least just as successful. There are great opportunities out there and we just need to feel we can offer them.

Jens J. Wischmann: I go along with that. And it is not only in Nuremberg that there are specialist HVAC and bathroom fitting companies whose work goes way beyond what is commonly understood by a “trade”. Instead, what they offer is advanced engineering. And it is also one of ISH’s functions to broaden people’s understanding of what trades are already achieving and can offer above and beyond this. At ISH, it is very much the case that the matter be debated in a sufficiently serious manner. And I am looking forward to that.

ISH 2023 World's Leading Trade Fair for HVAC + Water
March 13 - 17, 2023

Ludwig-Erhard-Anlage 1
60327 Frankfurt am Main

Claudio Paulus
Jens J. Wischmann