Renewable Energy Heat Act

Germany’s Renewable Energy Heat Act aims to increase the share of renewable heat to 14 percent by 2020. New building owners are obligated to get a certain share of their heat from renewable energy, and owners of old building get financial support for renovations.

In 2009 – long before the disaster in Fukushima – Germany’s Renewable Energy Heat Act was passed. It aims to increase the share of renewable heat to 14 percent by 2020. According to the German government’s website, the share of renewable heat is already around 13 percent.

This funding was temporarily cut during the economic crisis although every euro spent here generated more than 7 euros in private investments. Now, the program is back in place.

New building owners – private persons, firms, and the public sector, even if the building is to be rented – are required to get a certain share of their heat from renewable energy systems (such as solar collectors, a heat pump, or a wood-fired boiler).

The owners can choose how to meet these obligations at their discretion. Those who do not wish to use renewables can use more insulation or get heat from district heating networks or cogeneration units. As the government is obliged, by European law, to introduce a nearly-zero energy standard, it plans to combine the renewable heating obligation with the building code.

Market Incentive Program (MAP)

Because renewable heating systems can be planned from the outset when new buildings are constructed, the Renewable Energy Heating Act only applies to this sector. In existing buildings, the German government supports renovations of heating systems with its Market Incentive Program (MAP), which was originally instituted in 2000. This program primarily supports existing buildings; new buildings are eligible only for certain types of innovations.

Homeowners, small and midsize businesses, freelancers, and municipalities can apply for special funding for the following types of systems:

  1. small and large solar heat collectors
  2. biomass-fired furnaces with automatic feed systems (such as wood pellets)
  3. highly efficient firewood gasifiers
  4. efficient heat pumps
  5. district heating systems, heat storage and biogas pipelines
  6. geothermal heat supply systems

The purpose is to ensure that sensible ways of using renewable energy are promoted when the current building standard does not go far enough. The MAP has a budget of more than 300 million euros annually. The MAP is, in terms of its market impact, a very effective program: every euro in MAP funding has generated more than seven euros in private investments.

Challenges for the Market Incentive Program

During some uncertain years, the available funding was dependent on the emissions trading volume, and therefore the MAP was vulnerable to the whims of policy makers. In the last amendments to the program in 2015, however, the subsidies were enhanced significantly to increase the dynamics in this market segment.

This triggered the market for renewable heating: in the following year (2016) there were 62,739 renewable heating projects installed, of which about 41% were solar heaters and 18% were heat pumps, preventing 456,223 tons of CO2-equivalent emissions.

One of the remaining issues for increasing the share of renewable heat is a lack of information among consumers. Recently the German ministry for economy and energy launched a website “Germany makes it efficient” to inform people about energy efficiency and renewables in the building sector. This initiative has a budget of over 17 billion euros to help renovate buildings and install renewable heating.

Nevertheless, regional differences in the use of the MAP remain: the former East German states are less likely to take advantage of subsidies (especially those for biogas) – there is therefore still a need for more information and support in those regions.