© Adobe Stock / Robert Kneschke

New 'Federal Funding for Efficient Buildings'

Investing in energy efficiency and renewable energy has never been so rewarding and so easy. The new 'Federal Funding for Efficient Buildings' programme has been launched, featuring a streamlined application procedure for all funding – including large amounts.

(More than a third of all final energy in Germany is consumed in buildings, where it is used, for example, to provide heating, cooling and hot water. Against this background, the Federal Government wants to ensure that Germany’s building stock becomes climate-neutral by 2050. What this means is that more efficient buildings and a higher share of renewable energy in the heating and cooling supply are already needed today, as many of the buildings planned and constructed now will become part of the building stock in 2050. The good news is that wherever consumption is high, there is a lot of potential for saving energy.

The Federal Government wants to achieve these savings primarily through the 'Federal Funding for Efficient Buildings' (Bundesförderung für effiziente Gebäude – BEG) (in German only) programme, which was launched on 1 January 2021 and forms a core element of the 2030 Climate Action Programme (in German only) . The funding is to give a powerful boost to the energy transition in the buildings sector and replaces previous programmes to promote energy efficiency and renewable energy in this segment. These include the successful 'CO₂ Building Modernisation Programme' (implemented as the KfW 'Energy-efficient Construction and Refurbishment' programme) and the 'Market Incentive Programme' to promote the use of renewables for heating – applications for which hit a record high (in German only) in 2020.

Speaking at the launch of the 'Federal Funding for Efficient Buildings', Federal Minister for Economic Affairs and Energy Peter Altmaier said: 'If we want to achieve our climate goals, we cannot however allow ourselves to rest on this success. This is why we are modernising and simplifying our funding instruments for efficient buildings'. In 2020, the 'Energy-efficient Construction and Refurbishment' (in German only) programme, which will be replaced by the 'Federal Funding for Efficient Buildings' programme from July 2021, itself provided funding for almost half a million residential units, awarding loans and grants worth a total of almost €27 billion. According to calculations by KfW, this could trigger investments of up to €78 billion.

Three programmes to cover everything

The new 'Federal Funding for Efficient Buildings' programme consists of just three sub-programmes: 'Federal Funding for Efficient Buildings – Residential Buildings' (BEG WG) (in German only), 'Federal Funding for Efficient Buildings – Non-residential Buildings (BEG NWG)' (in German only) and 'Federal Funding for Efficient Buildings – Individual Measures (BEG EM)' (in German only). The BEG EM was launched by the Federal Office for Economic Affairs and Export Control (BAFA) on 1 January 2021. 'Individual measures' refer to those measures which do not lead to the 'Efficiency House' standard being achieved for the building as a whole. For example, those wishing to replace their old draughty doors and windows or insulate their building façade and roof can apply for funding of 20%.

The same percentage of funding is also provided for system technology, such as the installation of digital systems for optimising consumption (e.g. digital heating systems). Individual measures also include investments in renewable energy for heating systems, such as heat pumps, biomass systems and hybrid heating systems, which receive funding of 20% to 40% depending on the technology. For oil heating system replacements, the funding can even be increased to 50% of the eligible costs. Innovative heating systems based on renewable energy or solar thermal systems, and measures to optimise heating – such as the installation of low-temperature heating systems or pipe insulation – also receive funding. This includes support for 'hydraulic balancing'. This procedure ensures that the water flows evenly throughout the entire heating system and the heating system can be optimised.

The promotional loan scheme for the BEG EM will be available from KfW from 1 July 2021, with the other two sub-programmes (BEG WG and BEG NWG) also launching at the same time. Up until this date, applications for promotional loans for building construction and modernisation work leading to 'Efficient House' or 'Efficient Building' certification and for individual measures can continue be submitted to KfW as usual under the 'Energy-Efficient Construction and Retrofitting' programme. An important point for companies to note is that all three sub-programmes part of the new federal funding programme are considered 'no aid' under EU State aid law.

One application for multiple measures

By bundling the previous funding programmes into one, the funding programme has been modernised and made clearer. The application process has also become more simple. Since the start of 2021, homeowners have been able to apply for funding for multiple measures within a single application. And the level of funding they receive is higher, too. This increased rate of funding can be received for example for new buildings that are particularly sustainable. The new funding programme therefore introduces a new class of building, the 'Efficient House RE'. To be classed as such, at least 55% of the building's heating and cooling supply must be based on renewable energy or the building alternatively needs to have sustainability certification that is recognised by the Federal Government.

In future, anyone who wants to have their building project professionally planned and receive support right through the construction process can also receive funding for this under the 'Federal Funding for Efficient Buildings' programme using the same application. According to the Federal Office for Economic Affairs and Export Control (BAFA), applicants will also be able to view the processing status of their documents online.

Applications for funding for all three sub-programmes must be submitted to BAFA before the measures commence. Building-owners undertaking projects can consult energy-efficiency experts to help them decide which measures should be implemented. The costs for this are funded by the programmes 'Energy Advice for Residential Buildings (EBW)' and 'Energy Advice for Non-Residential Buildings, Plants and Systems (EBN)' at 80%.

Further information on 'Federal Funding for Efficient Buildings' can be found at deutschland-machts-effizient (in German only) and on the Federal Office for Economic Affairs and Export Control (in German only) and KfW websites.