Article - Energy Efficiency

What pertains to local authorities?


Source: picture alliance/dpa

© picture alliance/dpa

Energy conservation is a challenge for society as a whole. Local authorities can set a good example and cut their long-term costs in the process. For instance, they can modernise buildings or set up municipal energy efficiency networks under the NAPE.

The CO2 Building Modernisation Programme, under which funding is provided for the KfW programmes for energy-efficient construction and retrofitting, has been a great success. Over 4.6 million homes have been built or modernised to be energy-efficient since 2006, representing nearly €283 billion in total investment. As such, the programme has played an pivotal role in making thousands of buildings more energy-efficient well beyond the legal requirements. Now the duration of the programme has been extended until 2018 and €2 billion added to its previous financial envelope.

Funding takes the form of grants or low-interest loans that may be combined with loan-repayment grants. As a rule, financial incentives rise with the level of energy efficiency achieved.

  • Residential buildings: The “energy-efficient construction” and “energy-efficient retrofitting” programmes for residential buildings each come in two varieties, with funding available in the form of a loan or grant. The loans provided for KfW Efficiency Houses under the programme can now be as high as 100,000 euros, up from the previous 75,000. Similarly, the loan repayment and investment grants available under the ‘energy-efficient retrofitting’ programme have also been increased and a new repayment grant introduced for one-off measures to improve a building’s energy performance. As of April 2016, there has been a new KfW standard, the KfW Efficiency House 40 Plus, for which funding is now available under the “energy-efficient construction” programme. Funding for the KfW Efficiency House 70 is no longer available.
    Under the ‘energy-efficient construction and retrofitting – construction supervision’ programme, grants are also available for construction expertise and supervision services. This programme has now been expanded to cover one-off measures and the construction of new buildings.
  • Municipal and social service buildings: The programmes entitled ‘Investment loans for municipalities’ (IKK) and ‘Investment loans for municipal and social enterprises’ are designed to promote energy-efficient retrofitting and construction where community and local government buildings are concerned. Whilst the funding for retrofitting has been available for quite some time, funding for the construction of new buildings has only been available since October 2015.
  • Commercial buildings: In July 2015, the ‘KfW energy-efficiency programme for energy efficient construction and retrofitting’ was expanded to include commercial buildings. This leg of the programme has also been very successful, with more than 2,000 low-interest loans for energy-efficient retrofitting and construction approved since the start of the programme and an overall investment volume of some €7.6 billion. Altogether, it is fair to say that the individual programmes under the CO2 Building Modernisation Programme are a key driver of the energy transition.

Press releases

  • 01/04/2016 - Press release - Energy Efficiency

    Changes to the KfW programme for energy-efficient construction as of 1 April 2016

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In April 2015, a new edition of the Market Incentive Programme (MAP) for renewable energies in the heat market came into force. This new programme marks an important step towards implementing the National Action Plan on Energy Efficiency. With new elements such as output-based support for solar thermal power and with more rigorous efficiency criteria, the MAP has set new benchmarks for the heating industry. The Market Incentive Programme has an annual volume of more than €300 million, making it the most important instrument designed to promote the use of renewables in the heating market.

Municipalities that want to use renewable energy to generate heat and cooling are also eligible to apply for funding under the MAP. Under the ‘KfW Renewable Energy Premium programme (271)’, funding for the installation of larger heat pumps (with a heating capacity of 100 kW or more), biomass installations (with a nominal capacity of 100 kW or more) and solar thermal installations (with a collector area of 40 square meters or more) is provided in the form of repayment grants for low-interest KfW loans. Investment grants for small-scale solar thermal installations, biomass-based heating systems and heat pumps are provided by the Federal Office for Economic Affairs and Export Control (in german). The focus of this funding programme by the Federal Office for Economic Affairs and Export Control is on promoting the use of new installations in existing buildings. In the case of new buildings, in contrast, funding is only available for certain innovative types of installations.

You can also find additional information about the Market Incentive Programme (MAP) on this website (in german) and in our FAQ section.

If you want to find out more about how you can apply for KfW funding, please go to (in german) or call KfW Infocenter on freephone 0800 5399002.

If you want to receive general information about funding under the Market Incentive Programme, please consult the website of the Federal Office for Economic Affairs and Export Control (in german) or call +49 (0)6196 908 1625.

On 1 January 2016, the Federal Ministry for Economic Affairs and Energy launched its new Energy Efficiency Incentive programme (APEE), under which funding will be provided for the modernisation of heating and ventilation systems in the home. It was introduced instead of previous efforts to provide tax breaks for the energy-efficient retrofitting of buildings. The aim of the APEE is to create a stimulus for innovation and investment in efficient and renewables-based heating systems in the home. Under the APEE, a total of €165 million in funding will be available each year for a period of 3 years. This funding will be provided in the form of low-interest loans and grants.

The Energy Efficiency Incentive programme will build upon and strengthen the range of funding schemes that is already available. Home owners who would like to replace their heating system or install a ventilation system are eligible to apply for additional funding. For the very first time, support will also be provided for efficient combi-solutions.

The heating package will make funding available for the installation of particularly efficient heating systems, including measures to optimise the heating system as a whole (including radiators and pipes). This serves to promote a changeover to more efficient gas-based heating systems or heating systems based on renewables. The support provided for the installation of ventilation systems, combined with modernisation of the building envelope, will also help prevent damage occurring to buildings (such as mould) and for improving the indoor climate.

Persons wishing to install a heating system that runs on fossil fuels can apply for funding under the ventilation and heating package by using the same application procedure as under the KfW Energy-Efficient Modernisation programme (in German). Funding is available either in the form of a grant or as a loan. Under the heating and ventilation package, grants, for example, will be raised from 10% to 15% of the investment costs. Funding for fuel cell heating systems is available under the heading Energy-efficient Construction and Retrofitting - Fuel Cell Grant (in German). This scheme complements the existing funding programmes on energy-efficient construction and retrofitting (the Federal Government's CO2 Building Modernisation Programme). Private home owners have been able to apply for funding under the scheme since August 2016. In July 2017, the scheme was extended to non-residential buildings, meaning that the programme is now also open to small and medium-sized enterprises (SMEs), contractors, charities and local authorities. In view of the high investment costs for fuel-cell heating systems compared with conventional heating appliances, we want to assist the market roll-out.

Further information on the specific terms that apply can be found at (in German). Alternatively, you can call the KfW Infocenter on freephone 0800 5399002.

Persons wishing to install a heating system that runs on renewable energy can apply for funding under the ventilation and heating package by using the same application procedure as under the Market Incentive Programme (MAP) for renewable energies in the heat market. Those applying for funding under the heating package are also eligible to apply for a further 20% of the level of the funding amount that has previously been granted for heating-system replacements under the Market Incentive Programme (in German), and for a further €600 for heating system optimisation. The legal framework for this is provided by the Guidelines Promoting the Accelerated Modernisation of Heating Systems Using Renewable Energies. Further information on the specific terms that apply can be found at (in German). Alternatively, you can call the hotline set up by the Federal Office for Economic Affairs and Export Control at +49 (0)6196 9081625.

In order to promote investment, APEE will also include an extensive efficiency campaign.

Press releases

  • 30/06/2017 - Press release - Energy Efficiency

    Innovation in the heating market: funding for fuel cells will be expanded and 4th generation heating networks will be particularly promoted

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  • 01/08/2016 - Press release - Energy Efficiency

    “We are bringing energy efficiency into the home”, Federal Minister Sigmar Gabriel said on the launch of two new programmes for funding heating optimisation and fuel cell heating systems.

    Open detail view

On 1 June 2016, the German government launched a programme for ‘promoting electricity conservation within competitive auctioning schemes’ (‘STEP up!’). Under this programme, companies across all sectors are called upon to identify potential action they could take in order to bring down their electricity consumption and to submit these proposals in a competition for grants. The government has developed this new instrument to achieve maximum electricity conservation at the lowest possible cost. Funding will be granted for those measures that achieve the most in terms of electricity conservation per euro of funding.

‘STEP up’ is designed to encourage companies to identify areas where they can improve their energy efficiency and implement measures that take longer than three years to amortise in terms of electricity costs. Funding is available for any kind of investment that is proven to reduce a company’s electricity consumption, no matter if this means changing standard components or developing tailored systems solutions or whether action is taken on the company’s premises or at their customer’s premises. The competition is open to all companies, ranging from small and medium-sized family owned set-ups to large corporations. Companies can submit their proposals for internal action, but may as well choose to propose ‘collective projects’ whereby a large number of identical or similar measures will be conducted in private households or in businesses. All of this means that “STEP up” opens up new opportunities for companies to identify and implement action to improve their energy efficiency. “Step up!” entered its pilot phase on 1 June 2016. Up until the end of 2018, the German government will be providing a total of €300 million of funding under the programme. If the programme proves successful it is to be continued beyond 2018, perhaps even extended.

For more information about the programme and current edition of the competition, please go to (in german) and (in german).

Contracting allows for the complete prefinancing and implementation of energy efficiency improvements by a specialised energy service provider. One example of Energy Performance Contracting is the comprehensive improvement of a large office building. For this purpose, a company (the contractor) draws up an improvement plan with a binding level of energy savings. After the completion of the improvement, the contracting entity, in this case the owner of the office building, pays a monthly contracting instalment to the contractor, which he/she can finance in view of the resulting energy savings.

In order to boost demand for Energy Performance Contracting (EPC), the federal government is funding specialised contracting consulting services for municipalities and SMEs until 31 December 2018 in the context of the Guideline on the Promotion of Consulting on Energy Performance Contracting (in German). In a first step, municipalities and SMEs can make use of consulting services on the possibilities for energy efficiency improvements – including in particular contracting – in the context of an initial consultation. In a second step, the implementation of an EPC project can be supported by an expert in the context of an implementation and tendering consultation.

On 1 August 2016, the Federal Ministry for Economic Affairs and Energy launched its programme for funding heating optimisation via highly efficient pumps and hydraulic balancing (in german) (PDF, 367 KB). The programme provides funding for measures that require only a small investment to be made and creates incentives for consumers to improve their existing heating systems. This means that consumers will be able to reduce their energy and heating costs, receive a government grant of up to 30 per cent of their investment, and also make a contribution to transforming Germany’s energy supply.

The programme provides funding for the installation of highly-efficient heating and hot water circulation pumps, the use of hydraulic balancing and other measures that require only a small investment to be made such as buying pre-adjustable thermostatic valves and having these valves installed by a professional. In 2017, €360 million will be available under the programme; and between 2018 and the end of 2020, €470 million will be available each year.

One key characteristic of the programme is that it provides funding for measures that can be implemented easily and without major changes having to be made to the building whilst at the same time having the potential to make the heating system run much more efficiently. Pumps and thermostatic valves can be replaced within hours, and in smaller buildings, the process of hydraulic balancing can be completed within one day. The measures can even be implemented during the heating period.

Applications for funding need to be submitted to the Federal Office for Economic Affairs and Export Control. You only need to complete two steps to receive funding. Step 1: Go to the website of the Federal Office for Economic Affairs and Export Control (in german) for registration; step 2: Have the work completed and submit the required data via the online portal operated by the Federal Office for Economic Affairs and Export Control (in german).

For more information about the programme, go to (in german) and (in german), or call 0800 0115 000 to use the free hotline operated by the Federal Ministry for Economic Affairs and Energy.

The Federal Government wants to encourage municipalities and charities to use renewable energy and improve energy efficiency. This means providing municipalities and charities with the help they need to identify where and how they can save energy, and how energy saving measures can be undertaken in the most economically-efficient manner. This is where the programme entitled ‘Providing municipalities and charities with advice on energy use in non-residential buildings’ comes in. Under this programme, the owners of non-residential buildings are to be provided with needs-based, tailored advice on energy use before they start retrofitting a building to make it more energy-efficient. To this end, energy audits will be conducted in municipality-owned non-residential buildings including simple structures such as schools or more complex structures such as hospitals.

The advice yielded by the audits helps the owners avoid faults in the design of a building, and therefore avoid additional costs and damage to the building. Under the EU Buildings Directive, all new buildings erected by the municipalities from 2019 need to be nearly zero-energy buildings. In order to help municipalities comply with these rules, funding is also available for getting advice on energy use in new buildings.

Municipalities can receive grants coving up to 80 per cent of the costs they spend on energy advice. Another €500 is available in cases where municipalities require energy advisors to present the results of their audit in front of a panel of decision makers. This is to cover the additional costs that giving such a presentation causes for the energy advisor. The relevant guidelines on the subject can be found here (in german). By the end of 2016, the municipalities had submitted a total of more than 400 applications for funding under the programme.

As municipalities seek to implement the measures set out in the energy audit – both for retrofitting existing buildings and for building new ones – they can receive funding under the Federal Government's CO2 Building Modernisation Programme (IKK/IKU - energy-efficient construction and retrofitting).

In order to receive further information about the guidelines on providing municipalities and charities with advice on energy use in non-residential buildings, please call the service unit of the Federal Office for Economic Affairs and Export Control at +49 6196 908 2439.

For more information, please click here (in german).

Under the new energy-savings meter pilot programme, companies providing their customers with the metering infrastructure, data tools, and additional services they need to save energy are eligible to receive up to €1 million in funding per project. By launching this new programme, the Federal Ministry for Economic Affairs and Energy is seeking to further promote the use of smart home, smart building and smart production applications and other smart systems that help users reduce their energy consumption.

By connecting existing devices or systems to the internet, users can receive customised advice and services that help them save energy. This is to help users make informed decisions and identify

  • how much electricity is consumed by a particular device in their home,
  • which devices or systems use the most electricity and therefore drive up costs,
  • the most effective way to bring down their energy consumption.

So energy-saving meters show users where they use the highest amounts of energy and which measures are the most effective to improve energy efficiency and therefore to save energy and money. Energy-saving meters help users become more aware of how much energy they are actually using and take steps to reduce their energy consumption.

Under the programme, funding is available for companies that are trying out, enhancing and marketing digital solutions for reducing electricity, gas, heat and cooling consumption by providing these solutions to final consumers. This is being done as part of a number of pilot projects that cover different sectors and a wide range of different users.

The funding guidelines governing the energy-savings meter pilot programme were published on 20 May 2016 and entered into force the next day. Applications for funding can be submitted via the website of the Federal Office for Economic Affairs and Export Control (in german).

Further information can be found here (in german).

Further information