Policies for clean energy

Renewable Energy Heating Act and Market Incentive Program (MAP)

Germany's Renewable Heat Act aims to increase the share of renewable heat to 14 percent by 2020. New building owners are obligated to get a certain share of their heat from renewable energy, and owners of old building get financial support for renovations. This funding was temporarily cut during the economic crisis although every euro spent here generated more than 7 euros in private investments. Now, the program is back in place.

In 2009 – long before the disaster in Fukushima – Germany's Renewable Energy Heating Act was passed. It aims to increase the share of renewable heat to 14 percent by 2020. New building owners – private persons, firms, and the public sector, even if the building is to be rented – are required to get a certain share of their heat from renewable energy systems (such as solar collectors, a heat pump, or a wood-fired boiler). The owners can choose how to meet these obligations at their discretion. Those who do not wish to use renewables can use more insulation or get heat from district heating networks or cogeneration units. As the government is obliged, by European law, to introduce a nearly-zero energy standard, it plans to combine the renewable heating obligation with the building code.

Public funding triggers private investments
Source: BMWI

Because renewable heating systems can be planned from the outset when new buildings are constructed, the Renewable Energy Heating Act only applies to this sector. In existing buildings, the German government supports renovations of heating systems with its Market Incentive Program (MAP), which was originally instituted in 2000. This program primarily supports existing buildings; new buildings are eligible only for certain types of innovations.

Homeowners, small and midsize businesses, freelancers, and municipalities can apply for special funding for the following types of systems:

  1. small and large solar heat collectors
  2. biomass-fired furnaces with automatic feed systems (such as wood pellets)
  3. highly efficient firewood gasifiers
  4. efficient heat pumps
  5. district heating systems, heat storage and biogas pipelines
  6. geothermal heat supply systems
  7. The purpose is to ensure that sensible ways of using renewable energy are promoted when the current building standard does not go far enough. The MAP has a budget of more than 300 million euros annually. The MAP is, in terms of its market impact, a very effective program: every euro in MAP funding has generated more than seven euros in private investments.

Budget reliability

During some uncertain years, the available funding was dependent on the emissions trading volume, and therefore the MAP was vulnerable to the whims of policy makers. In the last amendments to the program in 2015, however, the subsidies were enhanced significantly to increase the dynamics in this market segment. This triggered the market for renewable heating even though the low energy prices extenuated this effect.