Questioning the IW Study: Cost Projections Overlook Key Variables

While the IW study's headline-grabbing figure of doubling gas heating costs grabs attention, some analysts question whether the assumptions behind the projection are too simplistic. The study assumes that carbon prices will rise linearly and that households will make no efficiency improvements or switch to cheaper alternatives. Critics argue that in reality, many households will reduce consumption through better insulation or partial electrification, moderating the cost impact. Moreover, the IW's baseline may overstate the price rise because it does not account for potential policy adjustments if costs become too heavy. The German government has shown willingness to cushion energy costs, as seen with the electricity price brake and carbon price cap discussions. The study also overlooks the possibility of technological breakthroughs in gas heating, such as hydrogen-ready boilers, which could keep gas relevant. By focusing on worst-case cost numbers, the study risks frightening homeowners into hasty, expensive retrofits. A more cautious reading suggests that while gas heating costs will rise, the doubling scenario is far from certain. Policymakers should treat the study as a useful but limited input, and households should evaluate their options carefully without panic.