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Investment promotion programmes for energy-efficient construction and modernisation are backing up the economy
At the beginning of 2020, the German government significantly improved its funding programmes for renewable energy and energy efficiency in the building sector. The Federal Ministry for Economic Affairs and Energy has thus implemented a key part of the decisions taken by the Climate Cabinet. At the same time, this funding support will lead to billions of euros worth of investments in Germany. The sharp rise in the number of applications submitted for these programmes in the first quarter of 2020 shows very clearly that the programmes are not only making a key contribution to mitigating climate change in Germany, but that they are also providing significant support for the economy. Small and medium-sized craft enterprises in particular are also benefiting from this.
Federal Minister for Economic Affairs and Energy Peter Altmaier said: "In implementing the decisions of the Climate Cabinet in the field of assistance for buildings, we have triggered a large number of investments in Germany that are specifically benefiting local crafts businesses. This is a positive and important signal, especially now during the coronavirus crisis. It also shows that the energy transition is not only fostering clean technologies, but it is also noticeably strengthening local value creation and employment.
The conditions of the funding programmes for energy-efficient construction and modernization have been improved as requested by the Climate Cabinet and they are paying off: The number of applications for funding has increased significantly in the first quarter of 2020 compared to the previous year: 18,800 applications for the construction or initial purchase of an efficiency house were submitted to the Kreditanstalt für Wiederaufbau (KfW) between January and March. The KfW is responsible for implementing the funding on behalf of the Federal Ministry for Economic Affairs and Energy. The improved conditions are also having an effect on energy-efficient modernisation (e.g. the installation of new energy-efficient windows, insulation of individual parts/sections of buildings or complete renovations), with over 26,500 applications submitted in this category in the first quarter alone.
Dr Ingrid Hengster, member of KfW's Executive Board stated: "We have seen that there is high demand for our programme ‘Energy-efficient Construction and Modernisation’ despite the coronavirus crisis. In the first three months of this year alone, we financed around 110,000 energy-efficient housing units with a volume of commitments of around 5 billion euros. This provides important stimuli, both for mitigating climate change and for the labour market in Germany.
The revised Market Incentive Programme for Heat from Renewable Energy (MAP) is also a great success for the Climate Cabinet. Since the financial incentives in this sector were significantly increased in January 2020, investment in climate-friendly heating systems has risen sharply: In the first quarter of 2020, 47,500 applications for funding support were submitted. This represents an increase of over 150 percent in year-on-year terms. Demand is particularly strong for the newly introduced premium for the replacement of oil heating systems. It is applied for in almost half of the applications submitted. Applications can be made online and at the Federal Office of Economic Affairs and Export Control (BAFA).
Torsten Safarik, President of BAFA, said: "Because of the coronavirus crisis, BAFA will pay special attention to ensuring that procedures are carried out quickly and without undue bureaucracy, because every successful application means a contract for a local crafts firm".
In the first quarter of 2020 alone, a total of 92,800 funding applications were submitted under the above funding programmes for the promotion of investments in energy efficiency and renewable energy in the building sector. This number was significantly higher than in the same period last year. This shows that these funding programmes are making an ever greater and more important contribution to stabilising the economy in Germany and that they can help to mitigate the economic impact of the COVID-19 pandemic.