Renewable Energy Funding
The renewable share in gross national electricity consumption is to rise to more than 80 percent by 2030. The renewable energy expansion is being supported by policy and funding measures that will create new business opportunities and favorable market conditions.
Renewable Energy Act 2023
The German Bundestag has passed significant amendments to the Renewable Energy Sources Act (EEG). The "EEG 2023" will replace the current EEG 2021 and come into force on January 1, 2023.
A number of first regulations of the EEG amendment have already come into force:
- The "renewable energy first" principle that the use of renewable energies is in the overriding public interest and serves public safety has been in effect since July 29, 2022.
- Higher compensation rates have also been applicable to all new rooftop PV installations since July 30, 2022.
- Adjusted subsidy rates are currently still subject to approval by the EU Commission under state aid law. The new subsidy rates can be applied as planned to systems commissioned after July 30, 2022, as soon as the relevant approval has been obtained.
Energy efficiency and renewable heat
More than one third of all final energy use in Germany is consumed in buildings to provide, for example, heating, cooling and hot water. The federal government wants Germany’s building stock become climate neutral by 2045. Two funding programs play a key role in providing funding to private as well as industrial clients, setting strong market incentives.
Federal Funding for Efficient Buildings (BEG)
The Federal Funding for Efficient Buildings (BEG) program combines a number of existing incentives programs to promote energy efficiency and the use of renewable energy sources in the building sector. Central to this is the use of new heating systems, optimization of existing heating systems, measures on the building envelope, and the use of optimized systems technology.
The BEG consists of three subprograms:
- Residential buildings (BEG WG)
- Non-residential buildings (BEG NWG)
- Individual measures (BEG EM)
They have been available for implementation since July 1, 2021. From 2023, funding is to be provided for each funding event either as a direct investment grant from the Federal Office for Economic Affairs and Export Control BAFA or as a low-interest promotional loan with a repayment grant from Germany's promotional bank KfW. All building measures that improve energy efficiency are eligible for funding. The following table provides an overview of eligible building measures and the maximum possible funding rates available (conditions apply, for full information refer to the Federal Office for Economic Affairs and Export Control BAFA).
Federal Incentive Program for Efficient Buildings as Strong Market Driver
Type of measure | max. possible funding rate | |
|---|---|---|
Building envelope | ||
Insulation of walls, roofs, ceilings and floors, renewal of windows or external doors, summer heat insulation | 20% | |
Systems | ||
Residential: efficiency smart home | 20% | |
Heating systems | ||
Solar thermal | 35% | |
Heat pumps | 40% | |
Biomass | 20% | |
Fuel cell based heating systems | 35% | |
Innovative heating systems based on renewable energies | 35% | |
Development or extension of a building grid without biomass | 30% | |
Development or extension of a building grid with max. 25% biomass | 25% | |
Development or extension of building grid with max. 75% biomass | 20% | |
Connection to building grid | 35% | |
Connection to heat grid | 40% | |
Optimization of heating systems | 20% | |
A 50 percent subsidy rate on expert planning or construction supervision is granted for all building measures.
Federal Funding for Efficient Heat Networks (BEW)
The federal funding program for district heating’s transition to renewable energy sources has been in place since September 2022. The BEW promotes the constructions of new heating networks with high renewable energy share as well as the decarbonization of existing networks.
In the period up to and including 2026, around EUR 3 billion will be made available for renewable heat generation using geothermal energy, solar thermal energy, large-scale heat pumps, and further heat network infrastructure. The BEW provides incentives for the building of new heat networks where renewable energy and waste heat sources will constitute a share of at least 75 percent, as well as the decarbonisation of existing networks.
Climate-neutral heat supply plays a key role in achieving climate targets. Greenhouse gas-neutral district heating networks are crucial for the climate-neutral transformation of heat supply, as they not only reduce dependency on fossil fuels but also enable the efficient supply of heat to consumers using renewable energies.
