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Whopping EUR 2.2 Billion Boost for Building Efficiency and Renewable Heating in Germany
Good news for the climate and homebuilders: The BMWi building subsidy programs have been allocated significant new funding.
Oct 28, 2020
The budget committee of the German Bundestag approved additional funds for the building subsidy programs of the Federal Ministry for Economic Affairs and Energy (BMWi) at a meeting in October 2020. The “CO2 Building Renovation Program” and the “Market Incentive Program” (MAP) for heating systems based on renewable energy will receive a total of around EUR 2.2 billion. The financing of these extremely successful programs is now secure for the current year. A merger of the existing programs into the new program “Federal Funding for Efficient Buildings” (BEG) and the corresponding budget is planned for the coming year.
Germany’s government is currently implementing its 2030 climate protection program. One measure taken at the start of 2020 as part of this was to improve these two funding programs. For example, funding rates were increased in the KfW banking group’s "Energy-Efficient Building and Renovation" (EBS) program, which is part of the “CO2 Building Renovation Program”. A bonus was introduced for swapping out oil-based heating systems in the "Heating with Renewable Energy" program, which is part of the MAP and managed by the Federal Office for Economics and Export Control (BAFA).
The improvements at the start of the year had the desired effect: in the past few months there has been a sharp increase in investments in energy efficiency and the use of renewable energy in the building sector. This wave of investment in the building sector was matched by a corresponding increase in the number of funding applications.
BAFA expects the number of applications for its “Heating with Renewable Energy” program to triple from around 76,000 in the previous year to an estimated 240,000. The number of residential units refurbished with funding from the EBS program increased by around 40 percent in the year to August compared to the same period last year.
In just the first half of 2020, loans and grants totaling EUR 14.5 billion were issued under the EBS programs. These loans and grants supported investments of up to EUR 38.5 billion, according to calculations by the KfW.
The additional budget approved this October ensures that the programs can continue in full in the coming months. This is essential as these programs have a strong economic effect: In the ongoing COVID 19 pandemic, the federal government's building subsidy is not only making an important contribution to climate protection, but also securing numerous jobs in medium-sized businesses, the construction industry and the skilled trades.
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