2024 marks the beginning of the end of pure oil and gas heating systems, at least according to the new Building Energy Act (GEG). Many German owners will soon have to leave their traditional heating systems based on purely fossil fuels behind.

With the GEG, the Federal Government has taken a decisive step towards a climate-friendly and future-proof energy policy in the building sector. But what exactly is behind this law and how does it influence the construction and operation of buildings in Germany?

In this article, we take a closer look at the important aspects of GEG, from its basics to its requirements for using renewable energy in buildings.

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Everything important: What exactly is the Building Energy Act (GEG)?

The GEG came into force in 2020 to decisively advance the energy revolution in the building sector. The GEG is not just a new regulation that was created out of thin air. Instead, it consolidates the contents of the Energy Saving Ordinance (EnEV), the Renewable Energy Heat Act (EEWärmeG) and the Energy Saving Act (EnEG) into a single law. This is intended to simplify legislation and make it more transparent for builders, planners and architects.

The text of the law is available here: https://www.gesetze-im-internet.de/geg/

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The Building Energy Act (GEG) in detail

The GEG is an important instrument in Germany's efforts to reduce energy consumption in the building sector and to minimize CO2 emissions. It aims to reduce dependence on fossil fuels in our heating sector, a sector currently dominated by gas and oil. The statistics strongly underline this dependence: Around three quarters of all heating systems in Germany are based on these fossil fuels. (Source: BMWK https://www.energiewechsel.de/KAENEF/Redaktion/DE/Dossier/geg-gesetz-fuer-erneuerbares-heizen.html)

The GEG has a clear goal in mind: climate neutrality by 2045. One main way to achieve this goal is to require new buildings in construction areas to install heating systems based on at least 65 percent renewable energy from January 2024. To put this in perspective, this means that two thirds of the energy used for heating must come from renewable sources such as solar, wind or biomass.

Of course, such far-reaching change requires flexibility and adaptability. The Act has therefore set different cut-off dates for different categories of buildings. Existing buildings, as well as new buildings in so-called vacant lots, are given longer transition periods. The size of the city or municipality plays a role here: large cities with more than 100,000 inhabitants must comply with these regulations by mid-2026, while smaller cities and municipalities have until mid-2028.

The GEG not only focuses on renewable energy, but also promotes technology openness. This means that builders and planners can choose from a variety of options to increase the share of renewable energy in their heating systems. These include hybrid heating systems that combine conventional and renewable technologies, systems that work with green gas, or even hydrogen fuel cells. This flexibility is key to ensuring that transitions are both practicable and economical.

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Another central point of the GEG is the role of municipalities. With the right planning, they can accelerate the transition to renewable energy. For example, if a city or municipality decides to designate an area for the new or expansion of a heating network or as a hydrogen network expansion area, the switch to 65 percent renewable energy in this area will become mandatory earlier. This shows how localized decisions can have a significant impact on a national level.

Important:

New oil or gas heating systems can be installed by the heating planning deadlines (June 30, 2026 for municipalities with over 100,000 inhabitants and June 30, 2028 for smaller municipalities). However, from 2029, they will have to use an increasing share of renewable energy: 15% in 2029, 30% by 2035, 60% by 2040 and 100% by 2045.

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Energetic quality of buildings

At the heart of GEG is the effort to improve the energy quality of buildings. A building that is designed to be energy efficient uses less energy for heating, cooling and lighting. This means that less fossil fuels need to be burned, which in turn reduces CO2 emissions. In the context of GEG, “energy quality” means not only efficient insulation and modern heating technology, but also the integration of renewable energy into the building's energy concept.

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The energy certificate

Each building has its own energy requirements and consumption. In order to make this transparent and comparable, the energy certificate was introduced. It is basically an “identity card” for buildings, which provides information about how energy-efficient a building is. The energy certificate lists important data such as primary energy demand, final energy demand and the specific CO2 emission value. It gives potential buyers or tenants the opportunity to see at a glance what energy characteristics a building has and what costs they can expect in terms of heating and energy.

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Climate protection and energy transition

The GEG is not only a set of technical rules, but also a political statement. It underlines the importance of climate protection and the energy revolution in the building sector. Buildings are responsible for a significant proportion of energy consumption and CO2 emissions in Germany. The GEG makes it clear that the building sector plays a key role in achieving German climate goals. The law requires increased use of renewable energy, not only in power generation, but also in the heat supply of buildings. It is a clear signal that the path to a more sustainable, climate-friendly future is through the building sector.

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Requirements for new buildings: What needs to be considered in the future?

The GEG underlines the urgency of reforming the building sector in the context of climate protection. Expectations are particularly high for new buildings. Here is a detailed look at the individual requirements:

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Primary energy demand: reduction targets

The annual primary energy requirement indicates how much energy a building requires over a year, taking into account not only the energy consumed directly, but also the energy required to generate, convert and transport the energy. The introduction of new requirements in GEG 2020 and 2023 has focused on reducing primary energy demand.

• 20% reduction: Compared to previous requirements, new buildings must now achieve a 20% lower average annual primary energy requirement. For example, if a comparable building had a requirement of 100 kWh/m²a (kilowatt hours per square meter and year) before these regulations, this target would mean a reduction to 80 kWh/m²a.
• Building type and size: The specific requirements vary depending on the building type and size. For example, residential buildings have different requirements than non-residential buildings such as offices or shops. A single-family house with a smaller floor space could have different requirements than an apartment building or an office complex.

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Low-energy buildings: A future standard for Germany

A zero-energy building is, as the name suggests, a building that requires very little energy for heating, cooling, ventilation and hot water. It is designed in such a way that it has almost no net energy requirement, i.e. it consumes almost as much energy as it produces itself. Despite higher initial investments, the operating costs of a low-energy building can be significantly lower than those of a conventional building, as energy consumption is so significantly reduced

A key feature of these buildings is their dependence on renewable energy sources. At least 55% (often even more) of energy consumption must come from renewable sources. This can be achieved through photovoltaic modules, solar thermal energy, heat pumps or by connecting to a renewable district heating network.

Low-energy buildings represent one of the most advanced standards in construction, particularly when it comes to energy efficiency. By stipulation by the GEG that all new buildings in Germany must meet this standard from 2021, Germany is sending a clear signal for environmental and climate protection.

To ensure low energy consumption, low-energy buildings are equipped with the latest construction technology:

• Thermal insulation: Highly efficient thermal insulation ensures that no heat is lost in winter and no unwanted heat penetrates in summer.
• window: Triple-glazed windows or even more specific variants reduce heat loss and at the same time prevent overheating in summer.
• Heating, cooling and ventilation systems: Modern systems, often in combination with building automation, ensure an optimal indoor climate with minimal energy consumption.
• Smart design: Building orientation and construction is often planned in such a way that it benefits from passive solar energy and at the same time protects against overheating.

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Renewable energy: The future of energy in new buildings

The importance of renewable energy in the construction industry is constantly growing. The transition from fossil fuels to green energy sources is a key element in achieving Germany's climate goals and successfully implementing the energy transition.

With the specified GEG requirements, a clear signal is sent. From January 2024, a considerable 65% of heating systems in new construction areas will have to be based on renewable energy. This is a significant step that goes beyond previous standards and shows how serious Germany is about the energy transition.

Technology options:

• Photovoltaic (PV): Solar cells convert sunlight directly into electricity. As technology advances, PV systems are becoming ever more efficient and cost-effective. In Germany, new buildings, particularly with suitable roof arrangements, could cover a significant part of their energy requirements with solar panels.
• Wind energy: Although mainly used in large wind farms, there are also smaller wind turbines for use in urban or semi-urban areas.
• heat pumps: Heat pumps have become one of the most popular renewable energy technologies for buildings. They work on the principle of extracting heat from a source (air, water or earth) and making it usable for heating and hot water purposes in buildings.
• Other technologies: Biomass heating, solar thermal systems or even feeding into renewable district heating networks are other options that builders could consider.

The GEG consciously allows builders to be flexible when choosing technology. This is important because not all technologies make the same sense at every location. Local geography, solar radiation, wind conditions, and many other factors play a role in deciding which technology is most effective and efficient.

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Oil and gas heating systems: The gradual transition to renewable energy

The move away from fossil fuels is an essential part of Germany's energy strategy. With the introduction of the GEG, significant steps were taken to reduce dependence on oil and gas heating systems. Here are the key details:

• City regulations: Large cities, defined as municipalities with more than 100,000 inhabitants, are at the forefront of this energy revolution. From 2026, new heating systems based on renewable energy to less than 65% of which are based on renewable energy may no longer be installed in these major cities.
• Smaller towns: For municipalities with less than 100,000 inhabitants, this regulation comes into force two years later, i.e. 2028. This gives smaller communities additional time to develop the necessary infrastructure and measures to support this change.

While pure gas or oil heating systems will no longer be permitted in new buildings after these cut-off dates, this does not mean the immediate end of these types of heating systems. When combined with renewable technologies, such as a heat pump or a solar thermal system, they can still be used. These combined solutions use fossil fuels as backup or additional heating, with the main energy requirement being met by the renewable component.

The decision to phase out oil and gas heating systems gradually is based on their environmental impact. According to statistics, around 85% of the energy used in residential buildings for heating and hot water comes from fossil fuels. The increased use of renewable energy in heating systems is intended to significantly reduce this figure. (Source: BMWK https://www.energiewechsel.de/KAENEF/Redaktion/DE/Dossier/geg-gesetz-fuer-erneuerbares-heizen.html)

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Requirements for existing buildings: What needs to be considered in the future?

The renovation of existing buildings is a central element in Germany's efforts to achieve climate goals. Old buildings, in particular those from before the first thermal insulation regulations, generally consume significantly higher energy consumption than modern buildings. The GEG therefore sets clear requirements for the energy-efficient renovation of existing buildings.

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Restructuring according to GEG: The concrete effects

The energy-efficient renovation of existing buildings is an essential lever for achieving Germany's ambitious climate goals. The term “essential” in the context of the GEG refers to measures that affect more than 10% of the building envelope. This means that when more than 10% of the outer area of a building is renovated, the GEG comes into force and the work must meet the requirements set out therein.

According to GEG, certain U-values (heat transfer coefficient) must be achieved during renovation. For example, this value is 0.24 W/ (m²·K) for roof insulation and 0.28 W/ (m²·K) for exterior walls. Achieving these values ensures a significant reduction in heat loss and thus a reduction in heating energy consumption.

When replacing windows, the new windows must have a maximum U-value of 1.3 W/ (m²·K) for the entire window and 1.1 W/ (m²·K) for the glazing. This ensures that the windows insulate optimally and minimize heat losses.

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Heater replacement: Suitable solutions for existing buildings

The conversion of heating systems in existing buildings is one of the central challenges in the context of the energy revolution. An oil or gas heater usually has a lifespan of 15 to 20 years. Once this period has been reached, restructuring is often required. The provisions of the GEG apply here.

It is foreseeable that the installation of pure oil and gas heating systems will be further restricted in the future. From 2026, the installation of heating systems based on less than 65% of renewable energy will be banned in large cities with more than 100,000 inhabitants. In smaller municipalities, this regulation will apply from 2028.

Suitable solutions for existing buildings in line with the GEG include heat pumps, solar thermal energy and biomass heating systems.

• heat pumps: Heat pumps are efficient heating systems that use environmental heat from the earth, air or water. Depending on the type and efficiency, they can generate between 3 and 5 kWh of thermal energy per 1 kWh of electrical energy. There are various types such as air-to-water, brine-water and water-to-water heat pumps. The installation of an electric heat pump is particularly suitable for single and two-family houses as well as multi-family houses. Installation can be an advantage in existing buildings. For optimal heat pump performance, building insulation or surface heating is advantageous, but not absolutely necessary.
• solar thermal energy: Solar thermal systems use the sun's energy to heat water for heating purposes or domestic use. Depending on size and orientation, these systems can cover 40-60% of the annual hot water demand in Germany. A combination of solar thermal system and boiler can also be used. If certain minimum sizes (minimum aperture areas) of the solar thermal system are met, it can be taken into account with a coverage ratio of around 15%. During further operation, a large part of the remaining heat must then be obtained from renewable energy sources or biomass.
• Biomass heating systems: Biomass heating systems use renewable raw materials such as wood, pellets or wood chips. A modern pellet stove can achieve efficiencies of over 90% and emit around 50% less CO2 compared to a conventional oil heating system. Despite efficiency, resources for sustainably produced biomass are limited. Prices could rise due to increasing demand in various sectors. Biomass heating systems are therefore particularly useful in existing buildings, particularly in those that are difficult to renovate or are listed buildings.

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Energy certificate: Consumption certificate and requirement certificate

Today, the energy certificate is a central document for property owners and interested parties. It is an official certificate that shows the energy status of a building. It is imperative for every owner who sells, rents or leases their building to have a valid energy certificate and present it when required. Failure to comply may result in fines.

There are two main types of energy certificates — the consumption certificate and the requirement certificate. The consumption certificate is based on actual energy consumption over the last three years, while the demand certificate is a theoretical calculation of the energy requirement of a building based on its condition and construction.

• Energy efficiency class: Similar to electrical appliances, the building is classified in an energy efficiency class of A+ (very efficient) to H (less efficient). This classification provides a quick overview of the building's energy consumption.
• Final energy demand: This value, expressed in kWh/ (m²·a), describes how much energy the building requires per square meter and year. A low value indicates high energy efficiency.
• Primary energy demand: This value not only takes into account the direct energy consumption of the building, but also the energy used to generate, convert and deliver the energy.

The energy certificate also provides comparative values that potential buyers or tenants can use to compare the building's energy consumption with other buildings. Many energy certificates also contain recommendations for energy-related renovation measures, which can help to reduce the building's energy consumption.

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Innovative Approaches: Local heating networks, district-related concepts and digitization

In recent years, the GEG has repeatedly made it clear how important innovations are in the area of energy-efficient renovation. It is no longer just about isolated individual measures; today, the focus is on comprehensive, district-related concepts. This idea of involving entire districts in energy planning offers a wealth of synergy effects and can increase overall efficiency. Local heating networks are a central element of these concepts. It makes it possible to generate heat at a central location and then deliver it to several buildings via a network of insulated pipes. The potential of these networks is particularly obvious when you think of renewable energy sources such as biomass or solar energy, or even the use of waste heat from industrial processes.

But it is not just local heating networks that are attracting the interest of city planners. Large-scale solar projects, which are jointly supported by an entire neighborhood, also open up new perspectives. Instead of many small solar systems on the roofs of individual houses, larger, jointly operated systems could significantly increase efficiency and at the same time enable cost savings.

By integrating various technologies, for example by combining solar panels, heat pumps and energy storage systems, a continuous and optimal energy supply can be ensured. And thanks to the financial incentives that the GEG provides for such innovative approaches, the implementation is not only ecologically sound, but also economically attractive.

Another aspect is networking and digitization in the energy sector. With their help, energy generation and consumption can be monitored and controlled in real time. For residents, this means not only greater efficiency, but also the opportunity to better understand and adapt their own energy consumption.

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Funding and support: What are the main funding programs and support related to the GEG?

The GEG provides the current legal framework for energy-efficient construction and renovation in Germany. It combines various previous regulations and thus implements the EU Buildings Directive into German law. In order to implement the ambitious goals of the Act in practice, the federal government offers a range of support measures.

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Funding programs

The state recognizes the crucial role of renewable energy and energy efficiency in the fight against climate change and has accordingly launched a series of funding programs to support the transformation of the building sector. The federal government is promoting the switch to heating systems, which run on 65 percent renewable energy, through subsidies and low-interest loans. This should also enable people with lower and middle incomes to transition to environmentally friendly heating systems.

• The basic funding of 30%: From 2024, the federal government will fund the installation of climate-friendly heating with 30 percent of the costs. This serves to protect the climate and keep operating costs stable compared to fossil heating systems.
• The income-related bonus of 30%: Householders with a total taxable income of up to 40,000 euros per year can claim an additional bonus of 30 percent.
• The 20% speed bonus: Up to and including 2028, those who replace their old fossil heating system with a renewable energy source will receive a speed bonus of 20 percent. This applies in particular to the replacement of oil, coal, night storage heaters and gas heaters that are at least 20 years old.
• The total funding of up to 70%: While the various bonuses can be combined, the total funding must not exceed 70 percent of the costs. This provides significant financial support and makes investments in renewable energy particularly attractive.
• Protection for tenants: For tenants, the costs of replacing heating are capped at 50 cents per square meter and month to ensure that everyone involved benefits from environmentally friendly heating.

All measures to introduce new heating systems are supported by the “Federal Funding for Efficient Buildings - Individual Measures (BEG EM)” funding program. Interested parties can choose between a direct subsidy or a low-interest loan. In addition, they can take advantage of energy advice from certified experts through the “Bundesförderung Energieberatung Wohngebäude (EBW)” program. The BMWSB's “climate-neutral new building” funding program is also available for new buildings.

(Source: BMWK, further information at: energiewechsel.de/beg)

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guidance

Implementing the GEG requirements can be complex for builders and owners. It is of central importance to be well-informed in order to both minimize environmental impacts and make economically viable decisions.

Energy agencies and independent advice centers: These institutions specialize in providing tailor-made solutions for individual requirements. You have access to the latest data, technologies, and best practices in the area of energy efficiency.

On-site advice from energy consultants: Individual and situational advice is often the key to success. Energy consultants visit the building in question, analyse the current status, identify weak points and recommend targeted measures to increase energy efficiency. Their expertise is often focused on specific topics such as insulation, heating systems or ventilation technology.

Funding opportunities for advice: It is important to mention that there are also government funding programs for such consulting services. These can help to reduce the costs of using expert knowledge.

Planning and implementation: After the consultation phase, the recommendations can be integrated into the planning and construction phase. With sound advice behind them, builders and building owners can be sure that their project not only meets GEG requirements, but also offers long-term economic and environmentally friendly benefits.

(Source: BMWK, all information available at: https://www.energiewechsel.de/KAENEF/Redaktion/DE/Dossier/energieberatung-uebersicht.html)

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[Updates] All important changes here:

Important: The information provided in this section regarding the changes made by GEG 2023 and 2020 is only a summary and is for general understanding. The content presented here does not claim to be complete or up-to-date and is not intended as legal advice or binding interpretation. Only the original texts of the respective laws and regulations are legally binding. If you have any questions or need detailed information, you should always refer to the original sources or seek legal advice. The information provided here is based on proven sources from the BMWK and BMWSB. Any liability for the accuracy, completeness or timeliness of the content presented is excluded.

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Significant changes made by GEG 2023 are:

• Reducing annual primary energy demand for new buildings: From 75 percent of the primary energy requirement of the reference building to 55 percent.
• Adjustment of the simplified verification procedure in accordance with Annex 5 of the GEG for residential buildings. Plant options not listed can be implemented using the reference building process, which remains open to technology.
• Primary energy factor for electricity: Introduction of a value of 1.2 (instead of 1.8 before) for the non-renewable share of the operation of mains-connected large heat pumps. The aim is a fairer evaluation of district heating from large heat pumps compared to other heat sources.
• Deletion of certain paragraphs in § 23 GEG: Paragraphs 2 and 3 were removed as they could lead to contradictory results in practice.
• Adjustment of the funding measures regulation in accordance with § 91 GEG: This is done in response to the increase in the level of requirements.
• Temporary relief until the end of 2024: Applies to buildings that are used to accommodate refugees by the public sector or on public behalf.

Important dates:

• Entry into force of the temporary relief scheme: July 29, 2022.

(Source: BMWSB, all information available at: https://www.bmwsb.bund.de/Webs/BMWSB/DE/themen/bauen/energieeffizientes-bauen-sanieren/gebaeudeenergiegesetz/gebaeudeenergiegesetz-node.html)

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Significant changes introduced by GEG 2020:

• Model building process: Introduction of a new process to verify the energy requirements for the construction of residential buildings.
• Using renewable energy: In the case of new buildings, the obligation to use renewable energy sources can also be met by electricity generated near the building from renewable energy sources.
• Flexibility options: The GEG offers options for meeting new energy standards. This includes calculations of electricity generated near the building and of gaseous biomass.
• primary energy factors: Direct regulation in GEG, increases transparency for builders and owners.
• Section 103 - Innovation clause (limited in time):
• By the end of 2023: Possibility of exemption by public authorities to meet requirements via a greenhouse gas emission limitation system.
• By the end of 2025: Possibility of joint fulfillment in the district for changes to existing buildings.
• Energy certificates: Now include information on a building's carbon dioxide emissions.
• Restriction of oil and coal heating: From 2026 Are there regulations that restrict the installation of new oil heating systems and coal heating systems.
• Energetic advice: When selling or major renovations of detached and two-family homes, this advice is mandatory.
• enforcement regulations: Introduction of a declaration of compliance for new buildings and for major renovations of existing buildings.

Important dates:

• End of 2023: End of time limit for certain aspects of the innovation clause.
• End of 2025: End of the time limit for joint fulfillment in the neighborhood.
• 2026: Start of restrictions on the installation of new oil and coal heating systems.

(Source: BMWSB, all information available at: https://www.bmwsb.bund.de/Webs/BMWSB/DE/themen/bauen/energieeffizientes-bauen-sanieren/gebaeudeenergiegesetz/gebaeudeenergiegesetz-node.html)

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conclusion

The GEG marks a decisive step towards a more sustainable and energy-efficient building landscape in Germany. As a bundle of previous regulations, it aims to significantly increase the energy efficiency of buildings and consistently promote the use of renewable energy.

While new buildings are being designed by the GEG to higher energy standards, in particular by anchoring the zero-energy building concept and the greater integration of renewable energies, the focus of existing buildings is on energy-efficient renovation. The Act places particular focus on the gradual replacement of oil and gas heating systems with renewable alternatives.

The GEG is supported by a variety of innovations and government funding programs, which are intended to facilitate both innovative approaches in energy-efficient construction and the implementation of GEG requirements. For building owners and building owners, numerous consulting options offer guidance and support to successfully overcome the new challenges and thus actively contribute to climate protection and the energy revolution in Germany.

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Disclaimer: All information subject to change.