The traffic light puts a project of historic proportions on the track: a third of German CO2 emissions are to disappear through nationwide heating modernization by 2045. This is provided for in a draft law approved by the cabinet. But there is great uncertainty as to what this means for owners, tenants and landlords. ntv.de clears the fog of facts and clarifies the most important questions. However, because the legislative process has not ended with the cabinet decision and the Bundestag has a say, there is still a lot going on. Even a complete failure of the law is conceivable. The regulations described below therefore all refer to the draft law of the Federal Cabinet.
When will the new Building Energy Act (GEG) come out?
The coalition is aiming to have the amended law passed by the summer parliamentary recess in the Bundestag. The Bundesrat has no say, which is why the SPD, Greens and FDP can get the GEG through with their own majority. The approval of the CDU and CSU, which the law would need in the Bundesrat, is not necessary. However, the FDP in particular sees a need for improvement. Their parliamentary group leader, Christian Dürr, therefore questioned the timetable: the law had to be practicable and, if necessary, needed more than two months. It should take effect on January 1, 2024.
Are the costs passed on to tenants?
The heating replacement will also affect tenants, assuming that their consumption costs will fall as a result of the modernization costs. While the installation of a new heating system is to be borne by the landlord as a maintenance measure and the replacement of a very old heating system is at least partially considered maintenance, modernization to reduce consumption is apportionable. However, the surcharge should be limited if the owner decides to use heating that burns biogas or hydrogen, so that the price risk cannot be passed on to the tenants.
Do functioning oil and gas heating systems have to be replaced from January 1, 2024?
Yes, but not immediately. A ban on fossil heating will only come into force in 2045 and the ban does not apply to gas heating, which is then operated with hydrogen or biomethane. The following applies to all other heaters: only irreparably defective heaters may not be replaced with new oil and gas heaters. Heaters have a lifespan of 20 to 30 years, with 60 percent of all gas heaters in the country being more than 20 years old, according to the Federal Association of Chimney Sweeps. In the case of oil heating, this even applies to 70 percent.
Are new gas and oil heating systems completely banned from 2024?
That depends on whether it is an existing building or a new building. Oil and gas heating systems may no longer be installed in new buildings. The new installation of oil heating systems is already largely prohibited under the applicable GEG from 2026. Biomethane-burning boilers are also not allowed in new buildings. Existing buildings, on the other hand, can continue to install gas and oil heating if the overall package ultimately meets the requirement of 65 percent renewable energy. This can also be achieved with a hybrid heating system, which mainly uses a heat pump and only uses the fossil fuel burner on particularly cold days, or with the help of a solar thermal system, in which heating and drinking water are heated on the roof.
What is permitted as an alternative to gas and oil?
If Federal Economics Minister Robert Habeck has his way, homeowners will primarily rely on heat pumps or a connection to the district heating network, if available. Direct electricity heating is also an option in particularly well-insulated houses. In principle, the planned subsidies should apply to all technologies that are compatible with the 65 percent target. Gas heaters that are hydrogen-ready, i.e. run on hydrogen, can also be installed.
Are hydrogen heaters a serious alternative?
The market must decide on this, the FDP believes, and calls for “technology openness”. Greens and SPD, on the other hand, want to reserve the foreseeable shortage of hydrogen for industry and trucks, especially since hydrogen will remain expensive as long as it is scarce. In practice, the GEG amendment therefore makes strict specifications: Anyone who wants to install a hydrogen-ready gas heating system may only do so where the local gas network operator is planning a binding conversion from gas to hydrogen. This must flow by 2035 at the latest and be at least 65 percent green hydrogen or blue hydrogen – i.e. either produced in a climate-neutral manner (green) or come from fossil fuels whose CO2 emissions were stored during hydrogen production (blue).
However, it is still completely unclear whether and to what extent the operators will convert the 500,000 kilometers of gas network to hydrogen, because technical and regulatory issues and thus the economic viability of the whole thing have not been clarified. It is therefore likely that the FDP will push for a relaxation of the requirements in the parliamentary process so that hydrogen is not actually taken out of the market right now.
What do I do as a homeowner with a defective gas heating system?
Those whose heating can no longer be repaired already receive a subsidy of up to 40 percent if they opt for a heat pump. The amended GEG also provides for 40 percent funding for every technology permitted from 2024: 30 percent basic funding plus 10 percent for accidents (climate bonus III).
What deadlines apply in the event of a heating defect?
As a rule, there is a transition period of three years, during which a used oil or gas heating system can also be temporarily installed. This could be a cheap option if the heating fails in winter and a compliant conversion is not possible in the short term – for lack of money, tradesmen’s appointments or both. In owner-occupied residential buildings with no more than six apartments, the owner is also exempt from switching to renewables if he or she has reached the age of 80. Also important: The local heat supplier will enable a connection to the district heating network in the foreseeable future, and there is even a transitional period of ten years.
What other exceptions are planned?
Special regulations should come for buildings under monument protection. “Unreasonable hardship” should also lead to exceptions in individual cases, i.e. if the effort and savings are disproportionate. People over 80 are generally exempt from all obligations, so they can continue to rely on oil and gas. If they modernize their heating systems that are at least 30 years old, they even receive a 50 percent subsidy (climate bonus I) instead of the basic subsidy.
What do low earners do?
Anyone who receives housing benefit, citizen benefit or basic security in old age can also apply for a 50 percent subsidy (climate bonus I). Specific subsidies for low earners who do not receive any form of social assistance have not yet been envisaged. Here it will depend above all on the design of low-interest promotional loans, which should be available in addition to the direct payments from the state.
Read more about the new grants here.
Are floor heating systems a special case?
Yes, because here there is usually a switch to a centralized form of heat supply. If the first storey heating system fails, it can be replaced, but a three-year period begins with the installation, within which the owners must decide whether to modernize. They then have another ten years to implement the plan, such as connecting a house to a district heating system.
Switch now or wait?
Depends on: The aim of the law is to take the oldest and most climate-damaging heating systems off the grid first. That is why the Climate Bonus II, which also adds 10 percent funding to the 30 percent basic funding, should only be paid for old heating systems that are replaced at least five years before the regular replacement obligation. However, so that not all heating system owners apply for the “Climate Bonus II” at once and prices for devices and trades are further encouraged, the application periods are staggered: The Climate Bonus II is available in 2024 for all devices older than 40 years, from 2025 for devices older than 35 years and from 2026 for devices older than 30 years. If your heating is functional, you still have time to come up with a replacement plan.
Something else speaks for waiting: The legislator wants to oblige all municipalities to draw up municipal heat plans. Once these are in place, homeowners will know whether there will be an expansion of the district heating supply or whether the gas supply will be switched to hydrogen. These could sometimes be sensible alternatives to heat pumps, for example.
What applies to homeowners’ associations?
Residential buildings with several apartment owners are subject to the same regulations as other apartment and house owners: you have to react to an accident and agree on replacing the heating. The exceptions for those over 80 only apply if all the owners of the apartments have reached the age of 80.
Are there enough craftsmen?
According to the ZVSHK industry association, there is currently a shortage of around 60,000 heating installers in Germany. This number of additional installers will be needed if all markets are served and the industry should not all concentrate on installing new heating systems, said the general manager of the Central Association for Sanitary, Heating and Air Conditioning, Helmut Bramann, to the newspapers of the Funke media group. But there is no reason to panic, because in principle all installers are able to install heat pumps, for example. There are also qualification programs that the Federal Ministry of Economics wants to set up – by the way, also to increase the number of energy consultants. They play a key role in enabling owners to make an informed decision about the right heating technology and to benefit from the funding programs provided.
Where does all the criticism of the GEG amendment come from?
It remains controversial whether the conversions actually pay off for people. The BMWK calculates that it will take 18 years for the modernization costs to be amortized. This is based on the assumption that the agreed extension of the CO2 price to include heating will drive up the prices for gas and oil significantly, while at the same time electricity from renewable energies will become cheaper and cheaper. This is plausible, but remains an assumption.
Furthermore, associations are raising doubts as to whether the proposed funding structure will actually help people who do not receive social assistance but neither earn well nor have large reserves. The SPD wants to make improvements here, the FDP warns that the project can be financed and refers to the tight budget situation.
The fact that the traffic light intervenes in terms of regulatory policy and bans certain heating systems is also fundamentally controversial: Opponents argue that it could also rely solely on the price signal of the CO2 price, which people could use as a guide when buying a heating system. Federal Building Minister Klara Geywitz, on the other hand, considers the regulatory approach to be a consumer protection measure: According to her ministry, 70 percent of all new installations last year were gas heaters, despite the foreseeable rise in gas prices.
Another important point of criticism: In poorly insulated houses, a heat pump is not very efficient. Instead, associations would have preferred to see more state money in building renovation. New windows and insulation of the outer walls are more expensive for homes than a heat pump, for example. The legislature therefore wants to continue to promote these construction measures and, when buying new heating systems, subsidize the repayment of development loans with additional repayment installments if the heating efficiency of a building is increased during the loan period.