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Financial and Support Instruments
for Fuel Poverty in Social Housing
Template D2.1 (2) – summary of the financial
products review – Germany
July 2008
Otto-von-Guericke-University Magdeburg
Department of Psychology I PF 4120
Environmental Psychology 39016 Magdeburg
Prof. Dr. Petra Schweizer-Ries Phone: +49 – 391 – 67-18471
Juniorprofessorin für Fax: +49 – 391 – 67-11963
Umweltpsychologie Email: petra.schweizer-ries@ovgu.de
www.finsh.eu
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The sole responsibility for the content of this publication etc. lies with the authors. It does not
necessarily reflect the opinion of the European Communities. The European Commission is not
responsible for any use that may be made of the information contained therein.
FinSH, D 2.1 Financial Review (Germany)
Contents
0. Introduction ................................................................................................................3
1. Singular grants for consultation services .................................................................3
1.1. Execution by independent experts .............................................................................3
1.2. Coordination by bank.................................................................................................3
1.3. Coordination by chambers .........................................................................................4
1.4. Coordination by energy agency and chambers...........................................................4
1.5. Coordination by German Consumer Organisation ......................................................4
1.6. Coordination by non-profit climate protection organisation..........................................5
2. Loans and grants for structural measures................................................................6
2.1. Loan..........................................................................................................................6
2.1.1. Coordination by National Banking Group (KfW) and local banks..............................6
2.1.1.1.‘CO2 Building Rehabilitation Programme’............................................................6
2.1.1.2.‘Modernization of Housing Space’ .......................................................................6
2.1.1.3.‘Ecological Construction’ .....................................................................................7
2.1.1.4.Supplements by public funds and private investors .............................................7
2.2. Running grant by public fund, coordination by bank ...................................................7
2.3. Singular grant............................................................................................................8
2.3.1. Public fund on local level ........................................................................................8
2.3.2. Public fund on local level, coordination by bank and non-profit company .................8
2.3.3. Public fund, cooperation with private and public organisations.................................9
2.3.4. Cooperation between municipalities and energy supplier ........................................9
2.3.5. Energy suppliers.....................................................................................................9
3. Main information sources ..........................................................................................9
4. Conclusion .................................................................................................................9
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FinSH, D 2.1 Financial Review (Germany)
0. Introduction
The present review of financial products in Germany focuses on mechanisms to increase the
energy-efficiency in residential buildings. Besides programmes being provided on a national
level by the Federal Government, a vast amount of financial products exists within the 16
Länder as well as on a regional and local level. Exemplary products were chosen, which can
be accessed in order to relieve tenants from high energy costs on the one hand and at the
same time increase the energy efficiency in residential buildings on the other hand. Thus,
programmes, which exclusively focus on a CO2 reduction for example by the implementation
of renewable energy technologies or products, which only target a reduction of energy costs
such as social tariffs by energy suppliers are not included.
The introduced mechanisms have in common that they were not specifically designed for
households with a low income. The bigger part of the products target building owners rather
than tenants. They promote single measures like the insulation of walls and the replacement
of the heating system, extent measure packages or a consultation service concerning the
implementation of such measures. Only a few products subsidize the acquisition of energy
efficient appliances and consultation programmes concerning energy-efficient behaviour.
Furthermore, most of the mechanisms are based on public funds but they differ concerning
the coordination of the products.
The numbers in brackets refer to the attached excel file, where more detailed information
about the respective products is provided.
1. Singular grants for consultation services
1.1. Execution by independent experts
The most extensive consultation
programme on a national level is promoted Federal Office of
by the Federal Office of Economics and Economics and
Export Control
Export Control (BAFA) [1]. Consulters have
to address to an independent authorized files application provides grant, max.
expert (experienced architects/engineers, 50% of consultation
certified craftsmen). BAFA will grant max. Authorized independent expert
50% of the consultation costs. Before
starting the consultation programme, an addresses to provides cut-rate on-site
application has to be filed in by the expert consultation
directly at BAFA as can bee seen in Figure
consulter
1. The consultation counts as a proof in the
context of the financial products by KfW Fig.1: BAFA ‘On-Site Consultation’ - national
banking group, which are mentioned in
paragraph 2.
1.2. Coordination by bank
The city of Hamburg grants 40% of the
consultation costs within the programme
City of Hamburg
‘Energy Performance Certificate for Hamburg’
[2]. The consulters can choose between a first
on-site check and a further assessment of the WK
building standard. The latter is the
files application 40% of costs
precondition for the issue of a certificate. In
Authorised
contrast to the BAFA-programme, the independent consulter
disbursement of the grant is coordinated by a expert addresses to
bank, the Hamburgische
Wiederaufbaukreditanstalt (WK) (see Figure Fig.2: ‘Energy Performance Certificate for Hamburg’
2). The Energy Performance Certificate for
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FinSH, D 2.1 Financial Review (Germany)
Hamburg is requested as a proof for the programmes of the city of Hamburg [18, 19]. (see
paragraph 2). The costs depend on the size of the building.
Ministry for Environment
Baden-Württemberg
1.3. Coordination by chambers
Chamber of crafts
The ‘Energy-Saving-Check’ [3] being offered in
Baden-Württemberg is coordinated and executed by 100€
the chamber of handcrafts (see Figure 3). The Land
Authorised 100€
grants 50% of the fixed amount costs of 200€. The independent consulter
assessment counts as a proof for the KfW- expert
programmes [8, 9, 10] (see paragraph 2).
Fig.3: ‘Energy-Saving-Check’ – Baden-Württemberg
1.4. Coordination by energy agency and chambers
Programmes being promoted by the
Land of Nordrhein-Westfalen [4,5] are
Land Nordrhein-Westfalen
coordinated by the regional energy
agency and executed by the chamber of promotes
handcrafts respective architecture/
engineering (see Figure 4). The Chamber of crafts/arch./engin. Energy agency NRW
consultants offer a determinate service
Certification/ Coordination/
for a fixed fee, which is partly granted by execution
52€
dissemination
the Land. The chambers certify experts Building
and disburse the grant for the Authorised check consulter
independent expert 25€
consultants. The energy agency Start-
coordinates and disseminates the consultation 48€
programme. The consulters directly
address to the experts who are Fig.4: ‘building check energy’, ‘start-consultation energy’ – Nordrhein-
Westfalen
registered in databases offered by the
chambers.
1.5. Coordination by German Consumer Organisation
The Federation of German Consumer Organisations coordinates a national consultation
programme [6], which is promoted by the Federal Ministry of Economics and Technology
(BMWi). It addresses both, owners and tenants, in contrast to the programmes being
described above who target mainly home owners. Local consumer agencies hire
experienced, but not specifically certified architects and engineers and offer energy
consultation hours (see Figure 5). Besides technical issues, the consultation includes topics
like energy behaviour, energy-efficient domestic appliances and promotion possibilities. If
necessary, a broader consultation concerning single measures can be utilized on-site.
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FinSH, D 2.1 Financial Review (Germany)
Federal Office of Federation of Consumer
Economics and Annual grant German Organsisations of
Technology Consumer Länder
Organsisations
Local Consumer Agency
Fee-based contract
independent expert
Stationary On-site
consultation consultation
5€ 45€
consulter
Fig.5: ‘Consultation by German Consumer Organisation’ - national
1.6. Coordination by non-profit climate protection organisation
Heating Surveys [7] are promoted by the Federal Ministry of Environment, Nature
Conservation and Nuclear Safety and coordinated by the non-profit limited liability company
co2online in the context of a climate protection campaign. The programme provides a grant
to municipalities in order to disseminate consultation services to owners and tenants.
Municipalities with more than 60 000 inhabitants can order a municipal heating survey for a
highly cut-rate price (average investment: 2 000€ by municipality, 10 000€ by programme).
They receive brochures including averaged data for tenants and owners to quickly check the
energetic standard of buildings. The brochure furthermore includes a coupon for a free
written heating assessment. The consulter therefore has to hand in data about the energy
consumption of the house respective the household. The assessment includes an analysis of
the data based on the regional reference data, provides information about consultants in the
respective region and possible financial promotion products. Above that, tenants receive a
letter, which they can address to their landlord in order to inform him/her if necessary about
above-average consumption and to motivate him/her to take action. Brochures including a
nationwide and therefore less specific heating survey can be ordered for free by smaller
municipalities as well. For both surveys, the municipal and the nationwide, data is provided
by individual consulters who use an online heating check, which is as well offered by the
coordinator. Figure 6 illustrates the described mechanism.
Federal Ministry of Environment, Nature Conservation and Nuclear
Safety
Promotes with annual amount
Co2online
Provides cut-rate
municipal/free
nationwide heating Provides free
Hands in Hands in
survey heating assessment
Orders coupon/data coupon/data
worth 60€
survey
Municipality owner tenant
disseminates survey informs
Fig.6: ‘Heating Surveys’ – national
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FinSH, D 2.1 Financial Review (Germany)
2. Loans and grants for structural measures
2.1. Loan
2.1.1. Coordination by National Banking Group (KfW) and local banks
The KfW banking group is the pivotal national coordinator of financial products to promote
investments concerning the retrofit, construction and technical equipment of (residential)
houses. It is owned by the Federal Government (80%) and the Länder (20%). The
programme is executed on a local level, which means that homeowners address to their
home bank when applying for the subsidy.
2.1.1.1. ‘CO2 Building Rehabilitation Programme’
The ‘CO2 Building Rehabilitation Programme’ [8] was designed to promote extensive energy-
saving investments. It encompasses two categories. In Category A an authorized expert has
to be consulted in order to reach at least the standard of a new building according to the
Energy Saving Ordinance (EnEV). The better the standard, the higher the repayment bonus
being offered. Additionally, construction supervision will be rewarded by a grant for owners of
one- and two-familiy houses. In Category B one can choose between five measure
packages, only one of them needs to be composed by an authorized expert. Figure 7
illustrates the mechanism. The KfW CO2 Building Rehabilitation Programme is as well
offered in the form of a grant, but only for owners of one- or two-family-houses.
Interest rate reduction
Federal Ministry of Repayment bonus
Transport, Building and KfW promotion
Urban Affairs bank Bonus for construction supervision
Grants subsidy Forwards audited
application
Local bank
Supplements: Applies for subsidy, proves
Disburses
loan professional implementation,
dena repays
Redemption bonus
Recipient
Consults/evaluates
Interest rate reduction, grants standards
Länder contracts contracts
Authorized expert
Professionals
consults
execute
Category A: Standard Category B:
according to Energy 4
Measure
Saving Ordinance
Construction packages
0-3
supervision
Fig.7: KfW ‘CO2 Building Rehabilitation Programme’ - national
2.1.1.2. ‘Modernization of Housing Space’
The KfW programme ‘Modernization of Housing Space’ [9] offers a loan for less extensive
measures compared to those being required in the programme described above. The version
ÖKO PLUS requires measures to improve the energy efficiency of the buildings. It therefore
offers better financial conditions compared to the STANDARD version (see Figure 8), which
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FinSH, D 2.1 Financial Review (Germany)
includes measures to improve the over-all standard of buildings as well. Consultation cost
are eligible but services are not requested.
Federal Ministry of
Transport, Building and
Urban Affairs
Interest rate reduction
KfW promotion
bank
Forwards audited Grants subsidy
application
Local bank
Fee:0,25%, Disburse- Disburse- Fee: 0 Supplements:
ment: 96% ment: 100%
Interest rate: -0,5%
Bavaria
Recipient
contracts
Interest rate: -0,25% Ing-diba
Professionals
STANDARD ÖKO PLUS
measures measures
Fig.8: KfW ‘Modernization of Housing Space’- national
2.1.1.3. ‘Ecological Construction’
The programme ‘Ecological Construction’ [10] supports the construction, set up and the first
acquisition of low-energy and passive houses and single measures to increase the energy-
efficiency of new residential houses. The subsidy by the Federal Republic is granted in the
form of a reduced and fixed interest rate in the first ten years. The required standards have to
be proved by an authorized expert. The higher the standard, the higher is the disbursement
and the lower is the annual interest rate.
2.1.1.4. Supplements by public funds and private investors
There are many supplements to the KfW-programmes. The Bank of Baden-Württemberg e.g.
provides a further interest rate reduction [11] for the ‘CO2 Building Rehabilitation’, the
German Energy Agency (dena) conducts a model project [12], which promotes passive
house standards in stock by a supplement repayment bonus. The Investment Bank of Berlin
supplements the programme in the form of an interest rate reduction as well as by the
cooperation with an energy agency in the context of the EU-project IMPLEMENT [13]. The
energy agency disseminates the program and offers support for the consulters concerning
the application. Both, the bank of Baden-Württemberg and Berlin request a minimum amount
of investments and therefore excludes smaller investors. The ‘Bavarian Programme of
Modernization’ [14] and the online-bank ING-DiBa [15] supplement the programme
‘Modernization of Housing Space’ by a reduced interest rate. The Länder Hamburg and
Sachsen-Anhalt provide a supplement for ‘Ecological Construction’ in the form of a loan [16]
respective a grant [17].
2.2. Running grant by public fund, coordination by bank
The city of Hamburg has passed an own Energy Saving Ordinance whose standards are
around 30% higher than the once being requested by the national ordinance. The city
provides a bunch of own financial products beyond a supplement to those being provided by
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FinSH, D 2.1 Financial Review (Germany)
KfW banking group. They are coordinated by the bank of the city of Hamburg (Hamburgische
Wohnungsbaukreditanstalt, WK). Both, the programme ‘Extent energy-saving and
modernization measures on rental buildings’ [18] and the ‘Climate Protection Programme
plus Single Measures’ [19], provide a grant with a running disbursement over 9 respective 6
years. Concerning the measures being promoted, they are comparable to the KfW
programme ‘Modernization of Housing Space’, since they include measures to increase the
over-all standard of the building as well. They require a professional consultation in the form
of an Energy Performance Certificate for Hamburg ([2], see paragraph 1). The programmes
are elements of a package of financial products, which aim to create and preserve affordable
living space. Therefore, the conditions include a cap for the allocation of investment costs
which goes beyond the general constrictions by tenancy law or social housing law. Figure 9
and 10 illustrate the described grants.
City of Hamburg
City of Hamburg
WK
Running grant: Running grant: 0,20- Up to 40% of WK
depending on 0,50EUR/decreased costs
measure 1kWh
1% Authorized expert
of grant 1% Running grant: 4% of all expenses
of grant
Energy Performance Authorized
Recipient Certificate (Hamburg) Recipient expert
Energy Performance Certificate
(Hamburg)
Extent measures
Improvement of Improvement
over-all of energy-
standard efficiency
Rent <6,50€
Duration: 6 years Duration: 9 years
Rent <6,50€
Fig.9: ‘Climate Protection Programme plus Single Measures’ – City of Hamburg Fig.10: ‘Extent energy-saving and modernization
measures on rental buildings’– City of Hamburg
2.3. Singular grant
2.3.1. Public fund on local level
The cities of Heidelberg, Freiburg and Hannover offer programmes [20, 21, 22], which
include fixed amount grants for a bunch of measures (e.g. thermal insulation, improvement of
heating system, blower door test) that can be combined if necessary. Applicants directly
address to the respective authorities before starting the workings.
2.3.2. Public fund on local level, coordination by bank and non-profit company
The programme QUAB offered by the City of Berlin [23] is coordinated by the non-profit
limited liability company KEBAB and realized through a cooperation with the Investment
Bank of the Land Berlin IBB (see Figure 11). It combines a fixed amount grant for thermal
insulation of buildings with the objective to advance qualification and employment. Therefore
the implementation of measures requires the employment of unemployed persons. KEBAB
cooperates with the local Employment Offices (Job Centres) in order to recruit unemployed
people, who will be qualified for the work in a building company in the context of a national
scheme aimed at creating employment. The recipient needs to contract a company, which is
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FinSH, D 2.1 Financial Review (Germany)
willing to hire unemployed persons. KEBAB offers advice concerning the implementation of
the measures; after a technical examination, the IBB will provide the grant ex post.
National employment scheme
Senate Department for Urban Development Federal State Land
promotes
IBB KEBAB Local Job-
Forwards Centre
application/proofs
qualifies places
unemployed
consults Files in
30€/m2 applications &
required proofs hires Employment subsidy
contracts
recipient Building company
Fig.11: ‘QUAB’ – City of Berlin
2.3.3. Public fund, cooperation with private and public organisations
The initiative ‘Arbeit und Klimaschutz’ in Hamburg consists of the authority of Urban
Development and Environment and around 60 organisations (handcrafts, housing
companies, tenants, architects, scientists and local authorities) targeting an increase the
energy-efficiency in the building sector. They offer a fixed amount grant for measures of
thermal insulation [24]. If the grant exceeds an amount of 4000€, an Energy Performance
Certificate for Hamburg [2] is required. The grant will be doubled if the measures decrease
the annual energy demand by 50%.
2.3.4. Cooperation between municipalities and energy supplier
In the region of Hannover, the fund ‘Pro Klima’ was launched by municipalities and the
regional energy supplier. They offer fixed amount grants for different measures which can be
combined within programmes concerning the construction [25] and retrofit [26] of houses and
the installation of Combined Heat and Power (CHP) systems [27].
2.3.5. Energy suppliers
Several energy suppliers provide grants for single measures like insulation, changeover of
the heating system or the acquisition of efficient household appliances etc. The subsidies are
provided as a fixed amount grant either in Euro or in the form of a certain amount of free
kWh. The single measures can be cumulated and are reserved for customers of the
respective supplier [28, 29, 30, 31], either tenants or building owners.
3. Main information sources
In cooperation with the German Energy Agency (dena), the information service BINE
provides an online database where the bigger part of all (national and regional) promotional
products for the building sector is registered (www.energiefoerderung.info). Additional
information was gathered on the respective websites of the providers (see attached excel
file).
4. Conclusion
The vast range of programmes, which targets the increase of energy-efficiency in residential
buildings by measures of energetic retrofit offers a high potential of alleviating the energy
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FinSH, D 2.1 Financial Review (Germany)
poverty situation in Germany in the long run. The requested quality of measures is in most of
the cases high and ensured by an inclusion of consultation services.
Nevertheless, different barriers seem to inhibit the use of the full potential. Even though e.g.
the BINE information platform gives a customised review of programmes, the range of
products is (too) complex, particularly concerning the possible accumulation of products.
Nationwide programmes, which are coordinated by the KfW banking group, are often
criticized regarding the complex application procedure. Furthermore, building owners seem
to avoid drawing on a loan over a long period of time and are not willing/capable to do high
investments for extent measures. Thus, an emphasis on grant or micro-credit programmes
should be taken in consideration. In order to simplify the access to promotion programmes as
well as the implementation of measures, a stronger guidance for building owners on a local
level is welcome. The coordination of public funds by energy agencies, chambers and
stakeholders seem promising.
The existing programmes have been neglecting tenants so far. Besides the improvement of
the housing stock, there is a need of programmes, which e.g. subsidize the acquisition of
energy efficient equipment like clock timers for heaters, or which offer guidance for energy
efficient behaviour and provide feedback tools for the evaluation of effects.
Finally, the described mechanisms are not explicitly designed for households with a low
income and often do not reach energy poor households. Thus, the design and dissemination
of products needs a close cooperation with local authorities, organisations and individuals
who are in touch with vulnerable households.
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