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Article - Energy Transition in the Building Sector

Enhancing energy efficiency in buildings


Around 35% of our total final energy consumption goes on providing the comforts we need in the home, with most of it being used to provide heating and hot water. Where consumption is high, there is a lot of potential for energy savings.

There are many benefits of improving energy efficiency and using renewable energy to power the home. These include lower energy costs, greater living comfort, a higher property value and secure provision for retirement, as well as the valuable contribution that is made mitigating climate change. Why not start your personal energy transition now! The Federal Ministry for Economic Affairs and Climate Action will support you with a range of attractive funding programmes.

Lower costs and more convenience

Since 2000, around five million property-owners have implemented energy-efficiency measures in their buildings while benefiting from government funding. Making your home energy efficient undoubtedly saves you a great deal of money in heating costs and allows you to enjoy a pleasant indoor climate.

Energy Efficiency Strategy for Buildings

The Federal Government wants to make Germany's building stock virtually climate-neutral by 2050. In order to do this, more of our heating needs to be covered by renewables and our buildings made more energy-efficient.

Our Energy Efficiency Strategy for Buildings sets out a comprehensive strategy for this sector. It brings together the three aspects of electricity, heat and energy efficiency and provides a clear policy framework for the energy transition in the buildings sector.

"Germany makes it efficient" information drive

A family stands in front of their house with solar roof, symbolizing Germany makes it efficient

© Getty Images/Henglein and Steets

The best and cheapest way of combating climate change is to reduce the amount of electricity that needs to be generated in the first place. In order to make our energy transition a success, we are seeking to become even more efficient in the way we use power and heat. Whether it’s the installation of a new heating system to replace the old one or of energy-efficient windows, the German Government is providing more than 17 billion euros of funding up to 2020 in order to help private households, companies and municipalities implement energy-efficiency measures. This is good for the environment, makes homes more comfortable to live in, and helps you save money. Information and advice on energy efficiency is available (in German) at or by calling freephone 0800 0115 000.

Advisory services

Good advice for the right modernisation

For anyone considering an energy retrofit, task number one is to obtain reliable information and expert advice. This is the only way in which a wise and informed decision can be made.

Personalised information and advice is available throughout the whole process, from gaining an initial overview right through to securing a detailed analysis.

The initial overview: advisory services provided by consumer centres

If you’re looking to gain an initial overview and tips on how to conserve energy, the consumer centres are a good place to start. They offer a wide range of information services on their websites, over the phone, and can even come to your home.

"Building check" one of the services provided by the consumer centres

The ‘building check’ is a service designed for homeowners. It involves a two-hour appointment with an energy consultant from the consumer centre who will visit you at your home to take a closer look at your energy consumption and provide initial recommendations as to how you can best improve your energy efficiency. Your costs total a mere 20 Euros, because all of the energy advice provided and organised by the consumer centres is cofinanced by the Federal Ministry for Economic Affairs and Climate Action under the “Federal funding for energy advice from the consumer centres” programme. For further information, please call the freephone consumer-centre hotline on 0800 - 809 802 400.

"Heating checks" provided by the consumer centres

In addition to the ‘building check’, the consumer centres also offer a ‘heating check’ (launched at the start of October 2015), a useful service for anyone that owns a heating system. The heating check looks at the actual efficiency of the heating system when in use. It consists of a two-hour appointment with an energy consultant from the consumer centre who will visit you at home to provide you with practical tips on how to optimise your heating system, thus saving you money. This service costs a mere 40 Euros, as this energy advisory service is also cofinanced by federal funding from the Federal Ministry for Economic Affairs and Climate Action.

Practical tool: the modernisation wizard

The modernisation wizard provided by the Federal Ministry for Economic Affairs and Climate Action is an online tool which you can use to ‘modernise’ your house on your computer. First, you need to enter data about the current state of the building by answering questions, such as: When was the building built? How big is it? What kind of heating is installed? How old is the heating system? You can then choose between different modernisation options: Do you want to insulate the outer walls? Do you want to install new windows? Or are you looking to replace the heating system? You provide the information about your building and in just a few mouse clicks, the online tool will help you assess what modernisation measures will truly pay off for you (in German):

On-site energy consultation with energy efficiency experts

Booking a one-on-one on-site consultation will make help you identify your specific modernisation needs and put together a coherent overall modernisation strategy for the building. To make sure that everyone can afford this advisory service, the Federal Ministry for Economic Affairs and Climate Action is providing part-funding for the costs. The energy consultant makes specific proposals on which modernisation measures suit the needs of your particular house and what government funding can be obtained to undertake these.

The on-site consultation is divided up into three steps. Please see our site (in German) Themenportal Deutschland macht`s effizient to learn more.

Tailored modernisation roadmap

The tailored modernisation roadmap (iSFP) is a software-supported instrument for the step-by-step energy-efficient refurbishment of buildings. The building energy consultant uses the iSFP to create an understandable overview of the refurbishment work to be carried out in a building and summarises these into sensible sets of measures. It points to untapped possibilities for energy conservation and the use of renewables, and also gives an estimate of the relevant investment costs and of the savings that could be achieved in terms of heating costs and carbon emissions.

Figures and facts about the energy transition in the building sector

~ 35
Symbolicon für Heizen

per cent of Germany's final energy consumption

is used in our homes – mainly for hot water and heating

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million flats
were refurbished or newly built between January 2006 and December 2016 to be energy-efficient

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million euros of funding per year
is provided under the ministry's Market Incentive Programme to drive forward the development of renewables in the heating market

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per cent of the loan amount
is reimbursed to recipients of KfW loans of up to €100,000 granted for the energy-efficient refurbishment of private homes

The Federal Ministry for Economic Affairs and Climate Action funding through the KfW

Energy-efficient refurbishment and government-funded construction

Under the KfW’s ‘Energy-efficient Refurbishment’ programme, the government supports the energy-efficient renovation of your building by covering up to 30% of the costs. As a rule, the more energy-efficient the building will be following the work, the higher the level of assistance.

The Federal Ministry for Economic Affairs and Climate Action uses the KfW finance programmes “Energy-efficient construction and refurbishment” to fund your new building or the energy-efficient refurbishment of your existing building. The Ministry covers up to 40% of your costs. As a rule, the more energy-efficient the building, the higher the level of assistance.

KfW programmes for energy-efficient construction and refurbishment are a driving force for energy efficiency in the buildings sector and a central instrument of the energy transition. Homeowners, businesses, municipalities and social institutions that make use of these programmes all benefit from low-interest loans and attractive grants to improve their building’s energy performance or to have a new, energy-efficient building erected. The KfW programme funding rates were significantly increased in January 2020 for “energy-efficient construction” and “energy-efficient refurbishment”. The Federal Ministry for Economic Affairs and Climate Action has thus implemented the Climate Cabinet decisions of September 2019.

Roughly one in three new buildings in Germany benefits from KfW funding programmes and is corresponding to a higher standard than required by the Energy Savings Ordinance (Energieeinsparverordungn EnEV).

For more detailed information on KfW funding programmes and funding options, please click on one of the following links (in German):

Heating with renewable energy

Attractive funding assistance under the Market Incentive Programme (MAP)

Renewable energy has made major inroads in transforming the electricity market, but much potential still remains on the heating market. At the same time, Germany uses too much energy for heating: more than two thirds of all heating systems used in Germany are inefficient, and around 10 million boilers in the country are more than 15 years old.

The Federal Ministry for Economic Affairs and Climate Action has therefore improved its Market Incentive Programme (MAP) to encourage more owners of houses and apartments, as well as companies and municipalities, to use solar, biomass and geothermal energy for their heating needs.

More funding for solar thermal energy, biomass and heat pumps

The Federal Ministry for Economic Affairs and Climate Action’s MAP provides funding assistance for the installation of solar thermal installations, biomass heating systems and heat pumps for private individuals, providers of professional services, and companies. It also supports the construction of new, larger-scale heating plants which use renewable energy, such as deep geothermal installations and district heating networks to distribute heat generated from renewable energy, e.g. neighbourhood systems provided by municipalities.

Market Incentive Programme: two types of funding

With a funding pot of over €400 million per year, the Market Incentive Programme is a central instrument for expanding the use of renewable energy on the heating market. It makes an important contribution towards advancing the energy transition, since it encourages private individuals, companies and municipalities to invest in sustainable heating technology and to use renewable energy to meet their heating and cooling needs.

There are two types of funding available:

The main objective of the programme is to modernise existing buildings. In the case of new buildings, in contrast, funding is only available for certain innovative types of installations. This is because new buildings are already required to use renewable energy under the Renewable Energies Heat Act (in German).

New: exchange bonus for oil-fired heating systems

As of January 2020, citizens can use the Market Incentive Programme to apply for an exchange bonus for oil-fired heating systems. Anyone who wishes to replace an old oil-fuelled heater with a new, energy-efficient and climate-friendly heater can receive a grant of up to 45% of the investment costs. This includes heating systems that are entirely fuelled by renewable energies - for example a heat pump or a biomass plant - or gas hybrid heating systems with a renewables-based share of at least 25%, or for example through the integration of solar thermal energy. Applications for the exchange bonus can be submitted to BAFA (Federal Office for Economic Affairs and Export Control).

For more information on funding assistance within the Market Incentive Programme, please click on the following links:

Frequently asked questions about the Market Incentive Programme (MAP)

How can renewable energy be used to heat a building?

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What is the Market Incentive Programme (MAP) for generating heat from renewable sources?

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Who can benefit from the Market Incentive Programme?

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Tax Incentives

Tax breaks for the retrofitting of buildings to improve energy efficiency

As of 1 January 2020, it has been possible to save on tax when retrofitting buildings to improve energy efficiency. The tax breaks are available for individual measures taken in owner-occupied properties to improve energy efficiency and to install heating systems which use renewable energy. Potential measures include replacing the heating system, fitting new windows, or insulating roofs and external walls.

20% of the spending on the measures (a maximum of €40,000 per residential property) is tax deductible, over a period of three years. As regards energy-related advice on construction and planning, 50% of the costs incurred are eligible. Tax breaks will be deducted from the tax debt so that a large number of homeowners can benefit from them. The requirement is that that the flat or residential property is at least 10 years old when the measures start.

2020 spending on retrofitting can for the first time be claimed in the 2021 tax return. A certificate by a specialist company needs to be attached to the tax return to confirm the proper execution of the retrofitting measures by the skilled craft firm or an energy consultant. It is not necessary to apply in advance. Beneficiaries can choose between the tax breaks and the existing federal funding programmes. Property owners can therefore choose: either they opt for a tax break or they apply for state funding using the BAFA or KfW investment programmes.

Further information on the tax breaks is available on the website of the information campaign „Deutschland macht’s effizient“ (Germany makes it efficient).

Energy Efficiency Incentive Programme

Targeted funding for more investments in housing quality and efficient heating

The Federal Ministry for Economic Affairs and Climate Action is promoting energy efficiency and climate change mitigation: the “Energy Efficiency Incentive Programme” is expanding the existing support available - to encourage more investment and more efficient heating in our homes using renewable energies and innovative fuel cell heaters.

The Federal Ministry for Economic Affairs and Climate Action uses the KfW funding programme “Energy-efficient construction and retrofitting” (product number 433) to have fuel cell heaters installed in residential and non-residential buildings. The aim is to make this forward-looking fuel cell technology widely available on the market. The funding is available for fuel cell heaters with an electrical output of up to 5 kW. These can be installed in new and refurbished buildings. Individuals, small and medium-sized enterprises (SMEs), contractors, non-profit organisations and municipalities are eligible for these attractive grants. For further information on fuel cell funding, please visit the KfW website:

The “Energy Efficiency” incentive programme (APEE) and its “heating package” also include a special incentive component for large heating systems that are operated with renewable energies. Anyone who applies for Market Incentive Programme funding from the KfW and wants to replace inefficient heating systems, such as oil-fuelled heating systems, receives a 30% repayment grant. For further information on the heating package, please visit the KfW website

For more information, please go to: (in German).

Consultation on energy efficiency

© - lightpoet

‘Germany makes it efficient’

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Heating Optimisation Programme

Optimise your heating system and replace the pump to save energy

The Heating Optimisation Programme launched in 2016 has helped widen the energy transition to include household boilers. The programme is intended to boost the number of energy-efficient pumps installed in German households, and to encourage the optimisation of existing heating systems.

Buildings account for around 35 per cent of Germany’s energy consumption and around one third of its greenhouse gas emissions. There is a lot of potential for saving energy in the buildings sector, particularly when it comes to heating. This has to do with the fact that many of the heat pumps installed in buildings are outdated and therefore use more electricity than is necessary. State-of-the-art high-efficiency pumps use up to 80 per cent less electricity compared to some outdated models. And there is still more that can be done: hydraulic balancing – which means making an existing heating system run more efficiently – can help bring down energy consumption even further. What is more, there is no construction work involved in this process.

Heating Optimisation Programme launched

By optimising heating systems to make them run more efficiently, homeowners, businesses and clubs can save both energy and money and help to drive forward the energy transition. The funding programme helps improve energy efficiency in buildings, making a key contribution to ensuring that Germany’s energy supply is efficient, secure and climate-friendly, and to meeting the goal of achieving a building stock that is close to being climate-neutral.

Funding under this programme is available for the following two measures:

  • Pump replacement
    The German government provides funding for the replacement of old heat and hot water pumps with high-efficiency ones.
  • Optimising heating systems
    The German government also provides funding for persons wishing to submit their existing heating systems to a process of hydraulic balancing. This involves a specialised company coming into the home to synchronise all the different components of the heating system in order to optimise it for use in the particular building in question. In addition to hydraulic balancing, funding is also provided for investing in existing heating systems or optimising them in other ways (like replacing thermostat valves).

It is, of course, possible to replace the pump and to optimise the heating system all in one go as well – a combination of measures that makes good sense. The German government also provides funding for combined action of this kind, covering up to 30 per cent of the optimisation expenses up to a maximum of 25,000 euros.

For more information on how to apply for funding and on which products are eligible for funding, please visit the website of the Federal Office for Economic Affairs and Export Control (BAFA). Federal Office for Economic Affairs and Export Control (BAFA). For more information, please visit: (in German).

FAQs about thermal insulation of buildings

Is it really worthwhile for owners of houses and flats to insulate their property?

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Why does the improvement of the energy performance of the building stock influence the success of the energy transition?

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Does the manufacture of the insulating materials use up more energy than the insulation itself actually saves?

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Relevant regulations

Modern energy conservation legislation

The German government employs a host of measures to foster greater energy conservation in the buildings sector. Public funding can, however, only be provided to support measures that go beyond what is legally required. The legal requirements for energy conservation are laid out in energy conservation law. This legislation is continuously adjusted to take account of the latest technical possibilities and political goals or requirements, while fully respecting the principle of economic viability. Germany’s energy conservation law is currently undergoing a major overhaul.

Germany’s energy conservation law aims to strengthen energy conservation in buildings of all kinds and to foster the use of renewable sources of energy. This will reduce our dependency on fossil fuels and on imports of such fuels, strengthen security of supply and protect the climate.

The most important standards governing energy conservation in buildings are set out in the Energy Conservation Act (EnEG), the Energy Conservation Ordinance (EnEV), and the Renewable Energies Heat Act (EEWärmeG). These three pieces of legislation are now to be merged in a new law which is currently being prepared – the new Buildings Energy Act (GEG).

This Act aims to introduce a unified set of rules that cover both energy efficiency and the use of renewables in the buildings sector. The project to overhaul the country’s energy conservation law continues to be on the government’s agenda in the new legislative term.The new Act will also help apply and enforce energy conservation law more easily and provide builders with more flexibility for meeting energy conservation rules. Under the EU Building Directive, a regulation setting out the nearly-zero energy standard is to be developed for new non-residential, public-sector buildings used by the authorities by the end of 2018 and for private new buildings by the end of 2020. This is to take into account the economic efficiency of effecting such requirements.

Under the current German energy conservation law, the Energy Conservation Act (EnEG) provides the legal basis for the following regulations:

  • Energy Saving Ordinance (EnEV)
    The Energy Saving Ordinance stipulates all applicable energy standards for all types of buildings.
  • Heating Cost Ordinance (HeizkostenV)
    The ordinance stipulates that the dominant share of the costs to be billed for heating and warm water is to be determined by the user’s level of consumption.

The Renewable Energies Heat Act (EEWärmeG) defines the share of renewable energy that is to be used in buildings.

You can find out more about the relevant legislation and ordinances here.

Buildings platform

Working together to foster the energy transition in the buildings sector

The Energy Transition in Buildings Platform works together with stakeholders from real estate, commerce, industry, consumer groups and the public sector to identify the many different ways in which the energy transition can be applied in the buildings sector and to develop appropriate measures based on these.

The Energy Transition Platform on Buildings provides a forum for the relevant stakeholders from the business sector, civil society, academia, the Federal Ministries and the German Länder to work together. The sessions serve to present and discuss current developments and address the (intermediate) results achieved by the working groups set up under the Energy Transition Platform on Energy Efficiency and the Energy Transition Platform on Buildings.

Detailed information on the work and findings of the Energy Transition Building Platform can be found here.

Scaffolded building symbolizes enhancing energy efficiency in buildings; Source:

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