NIBE Industrier AB
Company Name: NIBE Industrier AB
Headquarters: Kronoberg, Sweden
Ticker: NIBE listed on the NASDAQ Stockholm
Year Incorporated: 1989
Category: Amenities/Heating Solutions
Profile from the Company: NIBE Group is a global organisation that contributes to a smaller carbon footprint and better utilisation of energy. In our three business areas – Climate Solutions, Element and Stoves – we develop, manufacture and market a wide range of eco-friendly, energy-efficient solutions for indoor climate comfort in all types of property, plus components and solutions for intelligent heating and control in industry and infrastructure.
NIBE Air Source Heat Pump
NIBE through the Net-Zero Ninety Lens
NIBE Industrier AB manufactures heating equipment. The company has a long heritage in heating solutions dating back over 70 years, where they started out selling tubular electric heating elements, before developing hot water boilers in 1952, and heat pumps in 1981. Today’s product mix includes heat pumps and electric water heaters for homes and commercial premises (65%), electric heating elements and controls for white goods and industry (25%), and wood-burning stoves (10%). The company sells to Europe (50%), North America (25%), and the rest of the world. NIBE has averaged 10-20% annual sales growth and improving profitability over the last decade. The company listed on the Stockholm stock exchange in 1997.
Lean Green Economics
Heat pumps are essentially an air conditioning unit running in reverse, moving heat from the outside of the building to the inside using a fan/pump and compressor. Heat pumps can extract heat from the ground, water, or most commonly from the air and work even at sub-zero temperatures. They can run on renewable energy and for every unit of electricity they will provide an average of 3-4 units of heat. This means a heat pump uses 3-4x less energy compared to the most cost-effective fossil fuel technology, gas boilers. Heat pumps are therefore cheaper to run than gas boilers, so long as the electricity price is less than 3-4x more expensive than the natural gas price. Government taxation changes should increasingly bring electricity prices down and gas prices up, whilst a growing base of renewable energy should also bring down the average cost of electricity – this should increasingly favour the uptake of heat pumps – alongside support from regulation, increasing awareness, and a growing installer base.
A Boat for the Moat
There exists a number of unwarranted concerns around heat pumps regarding the use of lower heating temperatures and unsightly, or noisy, units. However, as the use of residential heat pumps becomes more common across consumers and installers, this will allay many of these worries and the focus will shift towards the benefits which include lower running costs, more consistent & comfortable building temperatures, and no internal boiler noise.
Sustainable Scalability
The largest part of NIBE’s revenues come from the sale of highly efficient, smart heat pumps which are reasonably priced and offer an industry leading warranty. This business unit also sells complimentary water heaters, heat accumulation water tanks, and district heating systems. NIBE are working on reducing the Global Warming Potential of the refrigerant used in their heat pumps to ensure lower GHG emissions through the product’s lifecycle. The heating element business provides energy efficient solutions for white goods alongside commercial uses such as heating components for the batteries and the cabins of electric vehicles. The smallest business is the stoves business, which sells wood burners - this form of heating can be run carbon neutral if the wood fuel is sustainably sourced (trees sequester carbon during growth) but does have issues from air pollution due to the particulate matter emissions from burning wood and biofuel (we note that NIBE conform to the highest emissions standards). Overall, the portfolio is well positioned to enable rapid, efficient electrification of heating for homes and businesses using established technologies, readily available materials, and with a technology roadmap to reduce life cycle emissions and improve ease of integration into all types of properties (new and retrofit).
Other Pure-Play Electrified Climate Control Companies: Johnson Controls Inc, Daikin, Lennox International, Modine Manufacturing, Carrier Global Corp, Trane Technologies, Watsco, Beijer Ref Ab, Zhenjiang Dongfeng Electric Heating Technology Co.
Space & Water Heating in a Net-Zero Future
The provision of basic amenities such as heating, cooling, lighting, and powering appliances is responsible for one third of energy use and one quarter of global emissions today. Heating and hot water alone contribute 13% of all global greenhouse emissions. Decarbonizing residential and commercial heating requires that we replace fossil fuel-based heating with more efficient solutions powered by sustainable energy. The leading technology for net-zero heating will be the heat pump. Heat pumps can run on renewable electricity and provide heat directly into a building or can be combined with a centralized district heating system. The future market for electrified heat solutions could reach up to $0.8 trillion and save over 5 billion tonnes of CO2e emissions each year (>10%).
This content is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice. No renumeration, incentives, or otherwise have been received from the company. Full Legal Disclaimer