KfW Research KfW Energy Transition Barometer 2023

• 13 million households use energy transition technology, mostly photovoltaic systems, heat pumps and solar thermal units
• 60% of households are feeling the impacts of rising heating and electricity costs
• Economic constraints most frequent reason given as obstacle to investing in energy transition technologies

This year again people in Germany are feeling the impacts of climate change with record temperatures, heatwaves and drought, as well as extreme weather events. At the same time, geopolitical developments over the last one and a half years are a clear illustration of the risks involved in relying wholly on fossil fuels for energy – not only in terms of achieving climate neutrality, but also in terms of ensuring secure energy supplies. Rising energy prices are making alternative energy measures more attractive, while simultaneously restricting people’s ability to invest in such measures. Against this background, the findings of KfW Research’s Energy Transition Barometer 2023 give grounds for optimism. Nine in ten households (88% as compared to 89% in 2022) continue to support the energy transition project. In spite of all the challenges and uncertainties of the past year, the project thus continues to enjoy a high level of support within the population. The representative household survey for the KfW Energy Transition Barometer was conducted between December 2022 and April 2023.

Within one year the use of energy transition technologies has become more widespread. Almost one German household in three (32% as compared to 29% one year earlier) now uses at least one such technology. In absolute numbers, they total 13 million households, 1.2 million more than the previous year. The trailblazers are high-income households (42% in the top income quartile), but lower-income households are gradually catching up (25% in the bottom income quartile). Currently, the most widespread technologies are photovoltaic systems (12% as compared to 9% one year earlier), heat pumps and solar thermal units (each at 10% as compared to 9% and 10% respectively one year earlier). 6% of households (5% one year earlier) have an electric car. 7% of households plan to purchase energy transition technology before the end of this year. The technologies most frequently mentioned in this regard were photovoltaic systems (7%) and battery storage (6%). The numbers of electric cars are also increasing. 3% of households plan to purchase an electric vehicle in 2023. Relatively, the increase in electric cars (+50%) is actually greatest.

“The findings of the KfW Energy Transition Barometer indicate that even when energy costs are high, people are very supportive of the energy transition and many want to be part of it,”

declared Dr Fritzi Köhler-Geib, KfW’s Chief Economist.

“This is pivotal! Given that private households account for almost 40% of CO2 emissions in Germany, we need them to be on board if we are to achieve the transformation. Now it is a question of maintaining this positive attitude and acceptance – and encouraging even more households to take the necessary steps and invest.”

Asked about obstacles to undertaking energy transition measures, households most frequently stated economic constraints. 41% of property owners state that they cannot afford to invest. (These figures are not gathered annually; most recent previous figure 29% dates from 2021.) The rise in the number of respondents mentioning this obstacle can be seen across a wide spectrum of measures, from insulation to replacing windows and investing in photovoltaic systems. 39% of respondents state, as an obstacle, their perception that the investment will not pay off. The third most frequent reason given was the difficulty in finding skilled workers (27%). The high level of financial reasons for not investing in the energy transition seems likely to mirror the reduced financial leeway of many households resulting from higher energy costs and the general rise in prices, as well as the abrupt increase in construction costs.

This KfW Research survey indicates that 60% of households feel a high or very high pressure as a result of the increased costs of heating and electricity (previous year: 50%). Households with gas and oil central heating are more likely to give this response than the average, while fewer than average households with heat pumps or wooden pellet heating systems felt the same pressure. About 70% of respondents expect heating costs to rise further. More than 20% of households had already been informed of further increases when the survey was carried out.

Households have responded differently to the increased costs of heating their homes. Households using fossil fuels for heating mention taking adaptation steps more frequently than those using climate-friendly technologies. The measures most frequently mentioned were heating less (70%) and using less warm water (55%). One household in three stated the intention of making savings elsewhere so that they could pay the increased costs of heating.

Many property owners are considering upgrading their property to achieve greater energy efficiency. Almost one third stated that they were considering this. Of tenants living in rented property, 13% of households had already spoken to their landlord about enhancing the energy efficiency of the building. And almost two thirds of private landlords surveyed (64%) see the need to refurbish their rented property now or over the next 10 years. 26% of these landlords seeing a need to take action even stated that they were planning to insulate their properties or install new heating systems before the end of this year.

The most recent analysis can be retrieved at www.kfw.de/KfW Energy Transition Barometer

Background

The KfW Energy Transition Barometer is an annual representative survey of about 4,000 households in Germany. It reveals the attitudes of households to the energy transition, and provides information on the energy transition technologies they use, including planned purchases. Data is also gathered on the motivation for and obstacles to investing in these technologies. KfW commissioned infas Institut für angewandte Sozialwissenschaft GmbH to conduct the survey. The survey for the most recent KfW Energy Transition Barometer was conducted between December 2022 and April 2023.