Changes to federal funding for efficient buildings (BEG) at KfW in 2024

The Federal Funding Program for Efficient Buildings (BEG) has developed into a dynamic instrument that is subject to regular reforms to reduce emissions from buildings. In particular, the focus is on the switch to renewable energy, for which the state provides annual funding.

This article gives you an overview of the latest information about BEG.

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Innovative funding measures at a glance: BEG's key components for successful heating replacement

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With the revised BEG Individual Measures Funding Directive, which comes into force as part of the amendment to the Building Energy Act on January 1, 2024, funding for heating exchange in Germany is undergoing significant changes. We will give you an insight into the key points of this funding, which can already be actively used now.

The basic funding for replacing old, fossil heating systems with modern, renewable energy-based systems is 30%. In addition, heat pumps with certain efficiency criteria can receive a 5% efficiency bonus. Biomass heating systems that comply with a fixed emission limit are rewarded with a supplement of 2500 euros.

Self-using owners benefit from a climate speed bonus of 20%, which is valid until December 31, 2028 and is reduced by 3% every two years thereafter. In addition, an income-related bonus is being introduced for the first time, which gives self-using owners with a taxable household income of up to 40,000 euros an advantage of 30%.

The bonuses are cumulative so that private owner-users can benefit from a maximum promotion of up to 70% when several bonuses are combined. Landlords receive basic funding of 30%, plus 5% efficiency bonus or a lump sum of 2,500 euros in emissions reduction surcharge. The relieved costs may not be apportioned to rent.

The maximum eligible expenditure for heating replacement is limited to 30,000 euros for a single-family house or the first residential unit in an apartment building. In apartment buildings, the maximum eligible expenditure for each additional residential unit increases, while in non-residential buildings, there are limits on eligible expenditure by square footage.

These innovative funding measures form a key component of BEG and offer clear incentives for successful heating replacement, while at the same time promoting the energy-efficient renovation of buildings in Germany.

The most important changes in 2024

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Maximum funding limits for heating exchange in residential buildings 2024

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The maximum eligible investment costs for heating replacement in residential buildings in 2024 are set as follows: 30,000€ for a single-family house. In the case of apartment buildings, the amount increases by 15,000€ for the 2nd to 6th residential unit and by an additional 8,000€ from the 7th residential unit. As an additional plan, there is the introduction of low-interest loans for self-using owners whose annual household income is up to 90,000€.

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Maximum funding limits for heating exchange in non-residential buildings 2024

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The maximum eligible investment costs for heating replacement in non-residential buildings in 2024 vary depending on the size of the building. Up to 30,000€ are available for buildings with a maximum net floor area of 150 m². For buildings with a net floor area of between 151 and 400 m², funding amounts to 200€ per m². For buildings between 401 and 1000 m² net floor space, the amount is increased by an additional 120€ per m². Buildings over 1000 m² net floor space receive a further supplement of 80€ per m². This structure ensures that funding meets the different needs of different sized non-residential buildings.

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Funding application and guidelines: How and where you can apply for new heating funding

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The subsidies for heating replacement will be available for application to KfW from February 27. Investment subsidies for individual efficiency measures, including measures on the building envelope, plant technology and heating optimization, as well as for building networks, can be applied for from BAFA. Supplementary loans can be applied for via the house bank or commercial bank.

When applying for heating subsidies and other efficiency measures (at KfW and BAFA), it will be mandatory in future to submit a concluded supply or service contract with a specialist company (excluding the transitional provision). This measure is intended to ensure that funding is provided for concrete and ready-to-implement projects. However, in order not to block funding through “inventory applications” for projects that cannot be implemented immediately, this requirement is important. The granting of the funding commitment to be applied for should be included in the supply or service contract as a suspensive or resolving condition.

The good news is that from February 27, applications for KfW funding can be submitted again via autarc.

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When and how the new funding conditions can be claimed: Timing, transitional arrangements and application process

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The heating replacement can already be ordered now, and the funding application for the new conditions can be submitted — temporarily and for a limited period of time. This transitional arrangement is valid until 31 August 2024 for projects started by that date. The application must be submitted no later than November 30, 2024. After this period, funding approval must be obtained before commissioning.

The technical application for heating funding from KfW for private owners in single-family homes is expected to be possible from February 27, 2024. For other groups of applicants, applications will be submitted on a staggered basis over the course of 2024. The technical application for other efficiency measures as well as the construction, conversion and expansion of building networks at BAFA will begin on January 1, 2024. Applications can be submitted consistently to promote systemic renovations (BEG WG and NWG).

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Source: Federal Gazette, energiewechsel.de