“Wirtschaftswise” Veronika Grimm has spoken out against a general ban on the installation of new gas heating systems. “The government could shoot itself in the foot with such bans,” she told the Süddeutsche Zeitung. One possible consequence is inefficiency “if companies cannot use gas and later hydrogen for heating”. And perhaps due to a lack of skilled workers and material bottlenecks, heat pumps could not be manufactured quickly enough to replace gas heating.
The government is currently working on a bill on renewable energy in heating. A ban on pure new gas and oil heating systems is planned from 2024, although this is controversial in the governing coalition. Current funding figures for heat pumps should be an argument for Minister of Economics Robert Habeck (Greens) for his controversial plans.
More grants for replacing old heaters
In 2022, for example, the Ministry of Economic Affairs granted significantly more funding approvals for replacing old heating systems with climate-friendly systems than in the previous year. The funding for 200,000 heat pumps was approved for existing buildings that are being renovated. That’s almost four times more than in 2021, when 53,000 heat pumps were approved, according to figures from the ministry. The “Spiegel” had previously reported. This does not include figures for installation in new buildings, where this technology is increasingly gaining ground over gas and oil heating. In addition, the state approved funding for the installation of 110,000 biomass heating systems and the renovation of the building envelope of 140,000 houses.
According to the heating industry, 236,000 heat pumps were sold last year, 53 percent more than in the previous year. Heating systems based on biomass, here in particular pellet heating systems, also developed disproportionately strongly with a plus of 17 percent and 89,000 devices sold. According to information from the BDH industry association in mid-February, this is due in particular to the BEG federal subsidy.
“We saw last year how vulnerable our dependence on fossil fuels makes us,” Habeck told Der Spiegel. One answer is energy efficiency and the decarbonisation of heat supply. Many have already taken part. Citizens had “started to renovate their houses, insulate windows and install heat pumps and thus took things into their own hands”. That is a very good development.
According to a report by “Bild”, Habeck wants to significantly increase funding for energy-efficient building renovations. Habeck is exploring subsidies of up to 80 percent of the costs incurred by the consumer. The money should come from the fund for energy supply and climate protection. A ministry spokeswoman said “Bild”: The aim is to ensure that the costs of a heat pump can also be borne by low-income households and middle-income citizens in particular: “The installation of a heat pump, biomass heating or connection to a heating network should continue to be subsidised, to reduce the difference to cheaper gas heating.”
Grimm: Price signals instead of a ban
Economist Grimm, who advises the government in the Advisory Council, would rely on price signals instead of a ban: “Increase the CO2 price in the heating sector so that installing gas heating becomes unattractive and replacing old heating becomes attractive,” she suggested. In addition, the government must provide more incentives to save energy and expand renewable energies more quickly. At the same time, Grimm warns that one must stop “talking about or even propagating deindustrialization”. Drive out the industry, emit them elsewhere where there are more lax rules: “Instead, we should show how an economy can be made more climate-friendly without sacrificing growth. In doing so, we are providing a role model that might inspire others, not just cheap coal to burn.”
The funding for efficient buildings (BEG), which started in July 2021, is the most important program of the federal government to support people with heating replacement and energy-efficient renovation of apartments. Around 500,000 BEG funding applications were approved in 2022. A total of around 18 billion euros has been spent, and 12.8 billion euros will be available in 2023.
