German Government Mandates and Funds Renewable Home Heating

The proposed legislation, which now goes to Germany’s parliament for ratification, is a revision of the country’s existing Buildings Energy Act (GEG). The 65-percent rule applies only to newly installed, not to currently working units or ones taken in for repair. So-called H2-ready heating systems, which can be completely converted to use sustainably produced green hydrogen, will also qualify. The rules would take effect on January 1, 2024.

Domestic heating accounts for some 70 percent of private energy use in Germany. The proposed rules changes do not require any specific form of heating as long as it’s renewable.

“With this legislative revision, we are starting a major modernization offensive and making up ground lost over many years,” said German Minister for Economic Affairs and Climate Action Robert Habeck in a statement. “The heating transition must begin now with new heating units.”

Meanwhile the government also promises financial assistance under the existing Federal Funding for Efficient Buildings (BEG) program to people who convert to sustainable forms of heating. Under the upcoming rules, those replacing fossil-fuel-burning heating systems with sustainably powered ones can claim 30 percent of their costs. Additionally, 20 percent is available to people who swap older for more modern, efficient systems.

“With the revision of the BEG,” Habeck added, “we are extending a helping hand to our citizens where it’s necessary.”

“The provision of heating in Germany will be changing immensely in Germany in the years to come – there’s no getting around that,” says Germany Trade & Invest heating expert Bénédicte Winter. “The combination of new rules governing sustainable heating systems and state subsidies to help people make the transition means that this is an excellent time for new international players to enter the German market.”