The new funding program for heating replacement: When and how does it apply to property owners?

The new funding program for heating replacement: When and how does it apply to property owners?

According to a report by www.tagesspiegel.de,

On the last working day of the old year, Economics Minister Robert Habeck took an important step forward. His new funding program for heating replacement was published in the Federal Gazette. Not a day too early. Habeck's heating law has been in effect since January 1st. The Building Energy Act (GEG) gradually obliges homeowners to only install climate-friendly heating systems. At the last moment, the Green politician managed to keep his promise that these new regulations would be accompanied by appropriate funding.

Impact on the real estate market

The new heating law regulations will certainly have an impact on the real estate market. Homeowners who build in new development areas must now use climate-friendly heating systems that are powered by at least 65 percent renewable energy. This will increase the demand for such heating systems and may also lead to an increase in the cost of traditional heating systems that do not meet the new standards.

Funding programs and their effects

The new funding program introduced by the Ministry of Economic Affairs stipulates that owners will receive 30 percent of the investment costs back when installing climate-friendly heating systems such as heat pumps or solar thermal energy. For low earners who own their own home and have an income of less than 40,000 euros per year per household, there is an additional 30 percent. This could lead to more homeowners switching to climate-friendly heating solutions, which in turn will further drive demand and the market for such systems.

Decline in interest in heat pumps and rising costs for gas and oil heating

Although interest in heat pumps has increased, the debate surrounding the heating law has resulted in many homeowners quickly investing in gas and oil heating systems in order to avoid the new standards. However, experts warn of rising costs for gas and oil heating as a result of the new law, as from 2029 a growing proportion of renewable energies such as biogas or hydrogen, which are significantly more expensive than conventional gas, will have to be used. This could lead to a slowdown in sales of gas and oil heating systems and further fuel interest in alternative, climate-friendly heating solutions.

Conclusion

The new heating law and the associated funding program have potentially far-reaching effects on the real estate market. Demand for climate-friendly heating systems is expected to increase, while traditional heating solutions may become less attractive. How homeowners respond to the new regulations and funding opportunities will be crucial, particularly given the long-term costs and environmental impact of various heating systems.