The Federal Government has shifted its funding priorities away from funding upgrades to a faster transition away from boilers and heat pumps, a move that has alarmed energy efficiency campaigners.
With around 10 million gas boilers installed, private households are one of the main gas consumers in Germany. Therefore, in order to reduce their consumption, the federal government is focusing on switching households to electric heat pumps.
However, due to budget constraints caused by the “debt brake”, something had to give way – the financing of building renovations.
The move, which was announced discreetly in July with little media interest, angered activists.
“We’re Stunned by Changes in Federal Effective Building Funding,” said Barbara Metz, Federal Director of German Environmental Aid (DUH).
“This overnight action is a rejection of climate protection in the construction sector,” she added.
Activists blame Federal Economy and Climate Protection Minister Robert Habeck, who is responsible for distributing much of the funding without following guidelines.
“While Minister Habeck talks about energy conservation and energy efficiency, he is de facto renovating existing buildings,” Metz said.
Before the change, the so-called complex renovation projects could be financed with state funds up to 55 percent. Now they are reduced to 5-25 percent.
This was not received very positively. “Rapid replacement of gas heaters is important, but it is not enough,” said Christian Noll, director of the Industry Initiative for Energy Efficiency (DENEFF).
Farewell to gas
From 2024 the federal government will ban fossil fuel heaters. From then on, new heating systems must be operated using at least 65 percent renewable energy, with the aim of installing around 500,000 heat pumps per year.
Relatively few new buildings already have gas heating. Only 16 percent in 2022. in the construction permits issued in the first half of the year, gas was indicated as the primary energy source for heating.
Nevertheless about 50 percent of households currently heat with gas, based on 2022 conducted survey, and another 24 percent. The fossil fuel heating inventory in Germany is outdated, most heating systems are more than 20 years old, many even 30 years old.
To change this, Berlin decided to allocate most of the renovation funds to new heating systems such as heat pumps.
With this radical move, the German government is expected to fulfill its legal obligation to reduce emissions from the construction sector, as required by the country’s strict climate laws.
The building stock in Germany is approx 35 percent of the country’s final energy consumption. The government has missed the 2020 and 2021 climate targets for the buildings sector.
For this reason, the transition to clean heating methods has become a priority for climate action. There are emissions from the construction sector calculatedgiving it a share of all oil and gas sales.
If they decrease due to the switch to heat pumps, the sector’s climate goals will be easier to achieve.
Financing for the actual renovation?
Overall, the federal government has committed to 2023-2026. 177.5 billion euros were spent on climate protection and economic transformation. Of these, 56.3 billion euros are theoretically earmarked for renovating climate-friendly buildings.
While the federal government spends about 14 billion euros a year on renovations, a source familiar with the matter estimates that about 12 billion euros will go toward the transition from gas.
This is good news for German heat pump manufacturers. With state subsidies, companies like Viessmann, Bosch and Stiebel Eltron get what is essentially a friendly domestic market for them.
For advocates of energy efficiency, who see it as an essential prerequisite for solving…