Federal funding for efficient buildings (BEG)
The most important BEG information at a glance
Blog article 07.02.2024An energy-efficient building stock generates only low emissions. The building sector is therefore an important building block on the path to a climate-neutral Germany in 2045. For this reason, federal funding for efficient buildings, known as BEG, has been available since the beginning of 2021. By improving the energy efficiency of buildings and increasing the use of renewable energies, CO2 emissions are to be significantly reduced not only in new buildings, but also in existing buildings.
- Event tip
- Grant and loan options for funding all measures
- Support for individual measures in renovation
- iSFP – the individual renovation roadmap
- Systemic measures in residential and non-residential buildings
- FROM THE IDEA TO THE PAYOUT
- Non-binding suggested wording / KfW contract modules for suspensive / resolutive conditions
- Benefit from new conditions despite funding approval for 2023?
- Consider other deadlines
Federal funding for energy-efficient buildings focuses on both existing and new buildings, based on the provisions of the Building Energy Act (GEG).
The subprogram, "Federal funding for efficient buildings - individual measures" (BEG EM), applies exclusively to existing buildings. It rewards investments in individual measures that gradually improve the energy efficiency of the building. The current BEG guideline for individual measures was published on December 29, 2023, and thus came into force on January 1, 2024.
Starting on August 27, private individuals and companies can submit applications for BEG subsidies for heating system renovations in residential and non-residential buildings.
Only municipalities will be given the opportunity to submit applications in November 2024. Municipalities will therefore still have the option of starting BEG-related measures before the project begins, even after August 31, 2024.
However, projects that are started between September 1, 2024, and the provision of the application function must be registered. Prior to this, a supply or service contract with a suspensive or resolutive condition must be concluded. Once the project has been properly registered, local authorities can begin their measures without the risk of premature project commencement, which would be detrimental to funding. However, project registration does not constitute a legal claim to funding.
Two subprograms promote systemic overall projects on existing buildings that serve to achieve a certain level of energy efficiency: "Federal funding for efficient buildings - residential buildings" (BEG WG) and "Federal funding for efficient buildings - non-residential buildings" (BEG NWG).
In all BEG renovation programs, planning and construction supervision are additionally subsidized at 50% of the costs in connection with the subsidized measures. In all areas, there are upper limits on subsidies depending on the building segment.
The promotion of new residential and non-residential buildings is regulated by the "BEG Climate-Friendly New Construction" program.
Grant and loan options for funding all measures
Grant and loan optionsThe individual measures are generally funded in the form of grants. Anyone who applies for funding in accordance with the guidelines will receive the calculated amount of the grant after a positive decision and after submitting all the required evidence.
However, since the beginning of 2024, it has been possible to apply for a supplementary loan from KfW once the subsidy has been approved. Households with an annual income of less than €90,000 can receive an interest rate reduction for the period of the initial fixed interest rate.
Systemic measures, on the other hand, are now only eligible for the loan option. Once all formalities have been completed, a repayment subsidy is granted. At the same time, applicants can benefit from attractive interest rate reductions. Local authorities can continue to apply for subsidies for planned systemic measures.
To ensure that the subsidies do not have to be repaid in full or in part in the future, it is important that the subsidized measures are used for their intended purpose for at least 10 years. During this period, audits may be carried out, for which all documents must be available.
Support for individual measures in renovation
subsidies- Heat generation systems, e.g., heat pump installation
- System technology, e.g., ventilation or, in non-residential buildings, room cooling
- Measures that serve to optimize heating, and
- the building envelope
SPECIAL FEATURES OF HEAT PUMP SUBSIDIES
basic subsidy rate The basic subsidy rate for heat generation systems is 30 percent, while in all other segments it is 15 percent of eligible costs.
climate speed bonus If the heat pump replaces an oil, gas, coal, gas floor heating system (other gas boilers must be at least 20 years old) or night storage heater, an additional 20 percentage points are granted. It should be noted that after the switch, the owner-occupied residential building will no longer be heated with fossil fuels. However, speed is of the essence here, as the full bonus is only valid until the end of 2028 – after that, it will be reduced by 3 percent every two years. From January 2037, this bonus will no longer be granted.
income bonus New in 2024 is the income bonus of 30 percent. This can be granted to owner-occupiers with an annual household income of less than €40,000.
efficiency bonus The use of heat pumps that utilize water, wastewater, or the ground as a heat source is subsidized with an additional 5 percent bonus.
The bonuses can be combined. For owner-occupiers, the maximum subsidy rate is 70 percent. In other cases, the maximum subsidy is 35 percent.
ELIGIBLE COSTS FOR RESIDENTIAL AND NON-RESIDENTIAL BUILDINGS
Whereas previously there was a flat-rate sum for all four funding segments per year, a distinction is now made between the eligible costs for heat generation systems and the costs for other measures from the remaining three segments.
The eligible costs for replacing a heating system are €30,000 for the first residential unit. The costs for the second to sixth residential units can be set at €15,000 each, and €8,000 each for the seventh residential unit onwards. For non-residential buildings up to 150 m², the flat rate is also €30,000. For buildings with a net floor area of up to 400 m², up to €200/m² can be applied. For buildings up to 1,000 m², an additional €120/m² is paid, and for buildings over 1,000 m², an additional €80/m² is paid.
The eligible costs for the remaining measures can be set at €30,000 per residential unit and calendar year in the residential sector. With the iSFP, the total increases to €60,000. For non-residential buildings, the maximum eligible costs are €500/m². // BEG 19 / BEG 20
iSFP – the individual renovation roadmap
restructuring roadmapAnyone who would like to increase the BAFA subsidy for measures relating to plant technology, the building envelope, or heating optimization by a further 5 percentage points and is able to tackle the renovation measures in the long term should have an individual renovation roadmap for their building drawn up by an energy consultant recognized by the BAFA.
The iSFP offers:
- an easy-to-understand, long-term overview of the building's energy status and renovation options
- A targeted, step-by-step renovation as a long-term method for increasing efficiency standards
- Orientation regarding renovation
At the same time, the iSFP takes into account the financial possibilities and expectations of the owners.
If subsidies are applied for under the BEG for measures from the renovation roadmap, the respective subsidy is increased by an additional 5.0 percent. In this case, it is mandatory to involve an energy efficiency expert. He or she checks and certifies that the measure applied for in the BEG corresponds to the proposals of the iSFP.
The ISFP bonus has not been granted for measures in the area of heat generation since July 15, 2022.
Systemic measures in residential and non-residential buildings
Systemic measuresIn terms of systemic measures in renovation, all projects that result in the building achieving a certain level of energy efficiency will be considered as a comprehensive measure.
For existing buildings, the scale ranges from monument, 70, 55, and 40. For residential buildings, efficiency house level 85 is added. The higher the level achieved, the higher the basic subsidy, which can be up to 35 percent of the eligible costs. Additional bonuses are promised by the EE and NH level supplements. EE stands for the use of renewable energies, which must cover at least 55 percent of the energy required for heating and cooling the building. NH is used to designate buildings for which a sustainability certificate has been issued in accordance with the BEG.
From September 22, 2022, a bonus of 5 percent will be granted for the "worst performing buildings" if they are renovated to energy efficiency level 55 or 40.
FROM THE IDEA TO THE PAYOUT
Renovation of the building envelopeThe promotion of measures relating to the renovation of building envelopes, building services (except heating) and heating optimization is handled by the Federal Office of Economics and Export Control (BAFA).
From January 1, 2024, subsidies for heating systems will be handled by the Kreditanstalt für Wiederaufbau (kfW). Owner-occupied single-family homeowners are expected to be able to submit applications to kfw from the beginning of March. Other applicants will be added in the course of the year.
Nevertheless, the measures can be implemented immediately. Anyone who starts renovating their heating system between December 29, 2023, and August 31, 2024, can apply for the subsidy retroactively until the end of November 2024.
There is an important change to be made before submitting the application. Once you have found a specialist partner you trust, you sign a contract with them with a condition precedent or condition subsequent, which must specify the expected implementation date.
The specialist trade partner and the applicant must now collaborate on the application process on the KfW portal, as well as on providing evidence of the measures carried out. The application is submitted online - our graphic shows the exact procedure.
Anyone wishing to apply for a subsidized supplementary loan must contact their bank after the subsidy has been approved. The bank will then handle the loan processing with KfW.
Once all the required documents have been uploaded online, nothing stands in the way of verification and payment of the subsidy.
Non-binding suggested wording / KfW contract modules for suspensive / resolutive conditions
Non-binding proposal from KfW- Non-binding proposal by KfW regarding the condition precedent:
The obligations to provide (delivery) services stipulated in this contract serve to implement [a renovation project] for which one of the contracting parties has applied for funding from the Federal Ministry for Economic Affairs and Climate Protection (BMWK) through the "Heating subsidies for private individuals – residential buildings" program (458) of the Federal Ministry for Economic Affairs and Climate Protection (BMWK) from KfW [has applied for / will apply for within [...] days of the conclusion of the contract].
This [purchase agreement shall enter into force / agreement shall enter into force with regard to the delivery and service obligations for implementation] only if and to the extent that [the BAFA / KfW] has approved the application [only for purchase agreements: for the promotion of [designation of individual measure / a renovation project]] and has confirmed the promotion with a commitment to the applying contracting party (condition precedent). The applicant contracting party shall immediately notify the other contracting party of the occurrence and scope of the condition. - Non-binding proposal by KfW regarding the condition subsequent:
The obligations to provide (delivery) services stipulated in this contract serve to implement [a renovation project] for which one of the contracting parties has applied for funding from the Federal Ministry for Economic Affairs and Climate Protection (BMWK) through the "Heating subsidies for private individuals – residential buildings" program (458) of the Federal Ministry for Economic Affairs and Climate Protection (BMWK) at KfW [has applied for / will apply for within [...] days of the conclusion of the contract].
This [purchase agreement expires / agreement expires with regard to the delivery and service obligations for implementation] as soon as and to the extent that [the BAFA / KfW] does not approve the application for funding [designation of individual measure / renovation project], but rejects it and does not grant the funding with a commitment to the applicant contracting party, but refuses it with a notice of rejection (condition subsequent). The applicant contracting party shall immediately notify the other contracting party of the occurrence and scope of the condition.
Benefit from new conditions despite funding approval for 2023?
NEW TERMS AND CONDITIONSNEW TERMS AND CONDITIONS
Anyone who has already received approval for their application from 2023 or earlier and has not yet begun implementing the measures should check whether the new funding conditions are more suitable for their project. This may well be the case, as the funding rates and eligible costs have changed significantly with the "new" BEG.
Anyone who now wishes to waive the old commitment and submit a new application does not have to observe the previous waiting period of six months. This rule has been suspended for one year after the amendment to the guidelines comes into force. In plain language, this means that after a waiver has been submitted, the new application can be submitted immediately thereafter in the course of 2024.
Consider other deadlines
Remember deadlinesEven after the funds have been approved, you should not completely ignore the calendar.
The grants are approved for 36 months, and the corresponding measures and the provision of evidence must be carried out during this period.
