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Because of the budget crisis, there is great uncertainty as to what government funding is available for. Loans for construction and housing were stopped, as were subsidies for energy advice. A lot has not yet been decided. An overview.
The Federal Office of Economics and Export Control – BAFA for short – will no longer approve applications for various funding programs with immediate effect. The authority announced this at the beginning of the week. The Kreditanstalt für Wiederaufbau (KfW) also imposed a stop on individual promotional loans two weeks ago. Many details for 2024 are still unclear. tagesschau.de answers the most important questions.
What is BAFA putting on hold?
A total of nine BAFA funding programs have been paused since Monday. This includes federal funding for efficient heating networks (BEW), which is intended to provide an incentive for the construction of new heating networks with a high proportion of renewable energies. The so-called federal funding for energy and resource efficiency in the economy (EEW) and the funding for stationary refrigeration and air conditioning systems as well as vehicle air conditioning systems in buses and trains were also put on hold.
Subsidies for non-private e-cargo bikes and support for projects to generate electricity from wind energy on land were also stopped – as was the heat pump development program (BAW). Lastly, energy consulting (EBN and EBW) and the serial renovation funding program are affected.
What does this mean for consumers?
There are many different programs that are being eliminated. But for consumers, not much actually changes. Most of the subsidies listed usually go to companies and municipalities. Serial renovation, for example, involves the development of completely coordinated elements – so it is more of a technical nature and relevant for construction companies or tradesmen.
Just like the temporary end of the heat pump expansion program: This is not, as many initially assumed, about subsidies for the purchase and installation of the heating system, but rather about promoting training for employees. The state actually supports companies so that their employees learn how to install and maintain heat pumps. Ultimately, the renovation of residential buildings is not directly affected by the funding stop – rather indirectly.
What does it mean exactly?
This includes, for example, the very first step for households when renovating: advice. So far, the state has covered 80 percent of the fee for a consultant recognized by the German Energy Agency, who looks at the house and checks what should be renovated and in what order. The maximum for single-family homes was up to 1,300 euros. Now consumers have to pay for it completely themselves.
Energy advice is initially completely independent of the promotion of a renovation measure such as insulating the facade or replacing windows. But: Based on his analysis, the consultant creates a so-called individual restructuring roadmap (iSFP). Although this is also not mandatory for subsidies, it increases the funding rate by another five percent. So it may well be worthwhile to have an iSFP set up – despite the temporary loss of funding.
The non-binding advice should not be confused with the specialist planning and construction support for energy-related renovations. In order to apply for a grant or a low-interest KfW loan, owners often need a project description and proof, which in turn must also be prepared by an energy consultant. However, it is specifically about the minimum technical requirements and the energy savings of the respective projects. As usual, half of this is sponsored by the state.
Which programs has the development bank KfW stopped?
Two weeks ago, the KfW imposed a temporary freeze on applications and commitments for four programs in the area of housing and construction. However, promotional loans that have already been approved will continue to run. This affects, for example, the municipal funding program for energetic urban renovation and the hardship program for housing companies, which were able to borrow money cheaply from the state as a result of the increased energy costs.
But two low-interest loans including repayment subsidies were also put on hold for consumers. Federal funding for cooperative housing typically supports participation in a new or existing housing cooperative. The loan for age-appropriate renovations is intended to help seniors with construction work on their house and apartment in order to reduce barriers and improve burglary protection.
Why are so many? Funding programs frozen?
The background to the current end to the BAFA and KfW funding programs is the spending freeze announced by the federal government after the Federal Constitutional Court recently declared the reallocation of 60 billion euros in Corona aid to funds for climate protection and the modernization of the economy in the 2021 budget to be null and void . The stopped programs had so far been paid for primarily from the climate and transformation fund.
What funding is still available – for example for renovation?
In addition to the funding for electric cars, home purchases and new construction, the federal funding for efficient buildings (BEG), among other things, remains unaffected by the pause in applications. As already mentioned, this renovation consists of two parts: a low-interest loan from KfW for the complete renovation of a house and grants for individual measures that come from BAFA.
The loan amount for the KfW residential building loan is up to 150,000 per residential unit for an efficient house. The effective annual interest rate, i.e. the interest plus commissions and fees, is 0.24 percent for a term of four to ten years. Although it increases the longer the loan runs, it remains well below current market interest rates. The state also pays a repayment subsidy of between five and 45 percent.
BAFA subsidizes the insulation of the building, the renewal of windows and external doors, summer thermal insulation, ventilation systems or digital systems to optimize energy requirements. The owners must invest at least 2,000 euros gross and can submit a maximum of 60,000 euros in costs per residential unit annually. The funding rate is 15 percent of expenses.
In addition, BAFA is currently supporting the replacement of heating systems. Property owners can submit a minimum of 2,000 euros and a maximum of 60,000 euros of their costs per residential unit. Depending on the type of system, you will receive a refund of ten to 30 percent of this. If the old oil, gas or coal heating works, an additional ten percentage points will be added as a reward.
What is still open?
A lot. On the one hand, all of the state’s funding programs are ultimately being put to the test with regard to the budget. On the other hand, a revised BEG funding guideline was announced for the amendment of the Heating Act in September. This was originally supposed to apply from January 1, 2024. But due to the ruling from Karlsruhe, this is also in jeopardy.
As a result of the new directive, subsidies for heating replacement are to increase even further and responsibility is to shift to KfW. The funding rates for individual measures should also be higher, but the limit on eligible costs should be lower. In addition, a new income-dependent KfW loan is actually planned, which is intended to make financing more attractive, especially for seniors.
Although these changes have already been formulated, they depend primarily on the adoption of the federal budget for the coming year. At least from the SPD’s perspective, this can no longer be passed this month. So it remains exciting.