Demand Explodes for Germany’s Energy-Efficient Building Subsidies

Despite the ongoing COVID 19 pandemic, the German government’s funding programs for renewable energy and energy efficiency in the building sector remained in high demand in the second quarter of 2020, continuing the positive trend seen from January to March.

Federal Minister Peter Altmaier: “These are excellent developments in difficult times. With our programs, we are advancing the energy transition in the building sector and we are helping small and medium-sized businesses and tradespeople. This safeguards income and employment. Here climate protection and the economy go hand in hand.”

One reason for the sharp rise in funding figures is the significant improvements made to the programs at the start of the year. The more attractive funding conditions continue to pay off, as a look at the programs for energy-efficient construction and renovation (EBS programs) shows.

Loans and grants totaling EUR 14.5 billion were approved In the first half of 2020, enabling projects in more than 215,000 residential units as well as commercial and municipal buildings. The investments will avoid more than 400,000 metric tonnes of CO2 emissions and secure more than 400,000 jobs. The total investment volume in the first half of 2020 was around EUR 38.5 billion.

Dr. Ingrid Hengster, member of the board at the KfW development bank, which implements the programs, said demand for promotional loans and grants from KfW has boomed since improvements were made to the energy-efficient construction and renovation program. “Even the corona pandemic has been unable to stop this trend. Overall, in the first six months of 2020, more than twice as much was invested in energy-efficient buildings and other energy efficiency measures in Germany than in the same period the previous year. In private construction, the growth exceeded 180 percent. That is around 55,000 energy-efficient residential units with an additional commitment from us of around 6.5 billion euros. All of this shows that the funding instruments are very well suited to initiating future-oriented investments and thus to boosting both climate protection and the labor market in Germany.”

There has also been high demand for the amended market incentive program for heat from renewable energy implemented by the government agency BAFA. Around 110,000 funding applications for heating based on renewable energy were received in the first half of 2020. Around half of the applications were also for the newly introduced oil heating exchange premium.

Torsten Safarik, President of BAFA, commented: “An increase of over 190 percent compared to the same period last year for the heating with renewable energy program – and that despite the corona crisis! This high demand is good news for the climate, the people in the country and the German economy. We at BAFA contribute with quick, simple and unbureaucratic procedures.”

In total, more than 210,000 funding applications were submitted for the funding programs mentioned, including commercial and municipal buildings, in the first half of 2020 - an increase of around 165 percent compared to the same period the previous year. As a result, the investment wave in the building sector triggered by the amended programs continues.

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BAFA Press release (in German)
GTAI: Energy efficiency in buildings