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The amendment to the Buildings Energy Act passed on 8 September 2023 was the product of long and intensive debate. According to Federal Minister Habeck, these discussions ultimately served to improve existing legislation and deliver a very positive result. In a press release, he also said the following: “Now we can really say we are reducing our dependency on fossil energy and are strengthening energy security. We are protecting consumers from rising prices for natural gas and oil. And we are stimulating Germany’s competitiveness in green technologies.”

The revised Buildings Energy Act is to help Germany master its heat transition. Heating systems based on oil and gas damage the climate and are gradually being replaced by efficient, economical and climate-friendly heating technologies that use renewable energy.

In order to provide planning security despite the changes and to make sure no one is overburdened, the Buildings Energy Act contains clear new provisions and reliable guidance for investment decisions for consumers, the housing industry, the heating industry and the crafts.

When switching to renewable energy, home owners can choose between a range of different technologies. Heating systems based on wood are also still permitted. By staggering the obligation for new heating systems to be based on renewables, building owners can take into account the results of local heat planning when making their decisions. The amended legislation provides for transitional periods and also includes hardship provisions and a subsidy for new heating systems of up to 70 per cent. For example, all applicants can receive a basic grant of 30 per cent of the investment costs. Existing oil and gas heating systems are not affected by the new provisions and can continue to be used.

Newly installed heating systems have to use at least 65 per cent renewable energy from 1 January 2024. This provision initially applies to newly developed areas only. As for new buildings located outside of new development areas and for existing buildings, transition periods have been set based on municipal heating planning. In municipalities with more than 100,000 inhabitants, the provision applies from July 2026 and in municipalities with up to 100,000 inhabitants from July 2028.

Existing heating systems are not affected by the new provisions and can continue to be used. If they break, they are allowed to be repaired. In addition, the legislative amendment protects tenants from high rent hikes. If a heating system is replaced in accordance with the requirements of the Buildings Energy Act, the apportionment of the costs of the new system to the tenant is capped at 50 cents per square metre of living space per month. In addition, tenants will benefit generally from more stable operating costs, especially in the face of rising carbon prices.

Choice between different environmentally friendly heating-system technologies

When it comes to the type of new heating system to be installed, it’s the homeowners themselves who decide. The switch to renewables can be made in various ways, whether through connection to a heating network or the installation of one of the following technologies: an electric heat pump, direct electric heating, biomass heating or hybrid heating (combination of renewable heating and gas or oil boiler), heating based on solar thermal energy or hydrogen-ready gas heating (heating systems that can be converted to 100 per cent hydrogen).

For detailed information on the amended Buildings Energy Act and on all available funding, including low-interest loans and investment grants, please click here. To view a video of Federal Minister Habeck discussing the Buildings Energy Act, please click here.