Promotional investment programmes for energy-efficient construction and refurbishment support the economy

The German Federal Government made significant improvements to its promotional programmes for renewable energy sources and energy efficiency in the construction sector at the beginning of 2020. The German Federal Ministry for Economic Affairs and Energy thus implemented an important part of the resolutions made by the climate cabinet. At the same time, this promotional offer facilitates investments worth billions of euros in Germany. The quickly increasing number of applications for these programmes in the first quarter of 2020 now clearly shows that the programmes not only make a key contribution to climate protection in Germany, but also play an essential role in supporting the economy. Mid-sized skilled crafts and trades businesses benefit from this in particular.

Federal Minister for Economic Affairs and Energy Peter Altmaier: “Implementing the climate cabinet’s resolutions in construction promotion has triggered a wave of investment in Germany. In light of the threatening recession due to coronavirus, it is apparent that we need the energy transition for more than just reasons of climate protection. We also need it as a stimulus package for growth and employment in Germany.”

The improved terms of the promotional programmes for energy-efficient construction and refurbishment (“EBS” programmes) as laid down by the climate cabinet are paying off: compared to the previous year, the promotion figures in the first quarter of 2020 have risen drastically. In the months from January to March, 18,800 applications were already submitted to KfW (“Kreditanstalt für Wiederaufbau”) for construction or initial purchase of an Efficiency House. This institution is implementing the funding on behalf of the Germany Federal Ministry for Economic Affairs. The improved terms are also having an effect on energy-efficient refurbishment (e.g. through installation of new windows, insulating individual sections of buildings or complete refurbishment): over 26,500 applications were submitted in this segment in the first quarter alone.

Dr Ingrid Hengster, Member of KfW's Executive Board: “We observe that our “Energy-efficient Construction and Refurbishment” programme is currently in high demand, despite the corona crisis. In the first three months of the year alone, we have promoted around 110,000 energy-efficient housing units with a commitment volume of around EUR 5 billion. These are all important stimuli, both for climate protection and for the German labour market.”

The revised market incentive programme for heat from renewable energy sources (MAP) is a great success for the climate cabinet. Since the promotional incentives were bolstered in January 2020, investment in climate-friendly heating has risen drastically: in the first quarter of 2020 47,500 grant applications were submitted. This corresponds to an increase of over 150% compared to the first quarter 2019. The newly introduced replacement premium for oil heating systems is in particularly high demand. It was included in over half of the submitted applications. Applications can be submitted online and to the Federal Office of Economic Affairs and Export Control (BAFA).

Torsten Safarik, President of the Federal Office of Economic Affairs and Export Control , emphasises: “Due to the corona crisis, the Federal Office of Economic Affairs and Export Control will make the process fast and unbureaucratic because every successful application means an order for local skilled crafts and trades people.”

In total, 92,800 grant applications were submitted in the first quarter of 2020 alone in the listed promotional programmes for promotion of investments in the construction sector in energy efficiency and renewable energy sources. Significantly more than in the same period of the previous year. The promotional programmes are thus making an increasingly larger and more important contribution to stabilising the economy in Germany and can help to mitigate the economic impact of the COVID-19 pandemic.