Heating Act: How to plan your new heating system now despite the delay

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Heat pump production in Lower Saxony

Photo: Moritz Frankenberg / dpa

This week, the heating law was supposed to go through the Bundestag after months of dispute in the traffic light coalition. But then the Constitutional Court ruled on Wednesday that the members of the Bundestag had not had enough time to actually discuss the final draft law. The lawsuit was filed by the CDU member of the Bundestag and former Berlin Senator for Justice, Thomas Heilmann, who, in his own words, wants to improve the law and make it even more climate-friendly.

In fact, there are still some opportunities to pause again and think about improvements. Environmental associations had recently complained that the new draft law no longer guarantees that the Federal Republic of Germany will meet its climate targets for 2030.

As a citizen, you can still work in parallel. Because one thing is already certain: classic heating will become more expensive in the coming months and years.

The core of the new law: New heating systems in new development areas should have to heat at least 2024 percent in a climate-friendly way from 65. Everywhere else, this only applies when the respective municipal heat planning is ready - by 2026 or 2028 at the latest.

Most of the important information is in paragraph 71 of the current heating bill.

For tenants: For more than 50 percent of households in this country, the current draft of the Heating Act actually brings clarity. Because of the new, more ecological heating system, their rents may be a maximum of 50 cents per square metre in the future – in six years. For a 100 sqm apartment, that's 50 euros more per month. More than 50 percent of people in this country live in rented accommodation, and in large cities even 80 percent. The whole thing is to be anchored in paragraph 559 of the BGB.

So for most of these households, the draft had signaled some reassurance, but of course not for all. For those who are currently just making ends meet, 50 euros more would be too much. According to the German Tenants' Association, more than three million households in Germany pay more than 40 percent of their income for rent.

However, the 50 cents per square meter would only be half the truth anyway. In an ideal world, the 50 cents more in the cold rent would be offset by a saving in heating costs thanks to a new heating system.

However, it could just as well be that the landlord, if he can pass on so little of the cost of the new heating system, only does the bare minimum of the new heating system for the time being. And no reasonable savings concept, for example with thermal insulation, pursued. Or even install a gas heating system again, for which he later has to buy expensive biogas or hydrogen – which the tenants have to pay.

This is because it is not the tenant who benefits from the savings in fuel or electricity costs, but only the tenant. As a result, this could mean 50 cents per square meter more for heating – and on top of that, higher heating costs.

In the long term, a half-baked heating modernization is not a good idea for landlords from the point of view of value retention. But not all landlords always think long-term. After all, it would motivate those who hope that new technology will generate considerable savings potential. Also a kind of openness to technology.

For district heating customers: The second group, for whom much has actually already been clarified in the draft law, are district heating customers. Like our chancellor, his construction minister and around 30 percent of households in the east of the country. Many of them are also tenants, but by no means all.

Those who are already connected to the district heating network do not currently have to do anything for the heating transition. According to the draft, district heating providers are obliged to make their networks climate-neutral over the next two decades (Section 71b of the draft).

But if you are a district heating customer and still have a little political energy left, it is still worthwhile to take care of the heating issue.

For example, with the same arguments as the tenants. This is because it is of no use to the district heating customer if a change is made, but the district heating company makes a decision that is associated with higher heating costs for you as a customer. Here, the law could be improved by motivating the district heating monopolists and, if necessary, forcing them to become more cost-effective.

This concern is justified, district heating companies have often called for much higher costs for heating than other energy suppliers in the past.

For low-income homeowners: The next group for whom the bill should provide more clarity is poor and still has a property. This may also include pensioners over 80, for whom, contrary to what is sometimes discussed, there will no longer be any exceptions based solely on age.

According to current plans, those who have little money should not have to modernize their house ecologically if the old heating system breaks down.

If you have been receiving citizen's allowance for at least six months, you should not have to retrofit in a climate-friendly way in the event of an accident. The same applies to housing benefit recipients, for owners the housing benefit is called a burden subsidy. You too can claim such an income-related exemption. And, of course, recipients of basic income support in old age do not have to switch their heating to a more expensive but more climate-friendly option.

For owners of old houses without much value: You own an old property that you are attached to, but which is basically over and unsaleable. If a buyer were to take over the house, she would have to replace the heating system under the current laws still from the Grand Coalition. If the new heating system would be significantly more expensive than the value of the property – something like this happens in the countryside – then the heating system of the property should no longer need to be modernised according to the current design.

According to the draft, households that have lived in the old building since 2002 and also own it can also claim an exception to the obligation to replace the heating system.

For future district heating customers: The planned new regulations are exciting for many people willing to build and those who will soon need a new heating system. Some people are still attached to a gas or oil heating system, but have been dreaming for a long time of being connected to a new, or already existing, district or local heating network in the future. Technically, this is often a good vision. This is especially true for households living in densely populated areas.

If you live there as a homeowner, you don't have to wait for the deputies. Check with an energy efficiency expert whether district heating is really your best option or not. Such an expert opinion often costs between 1000 and 1500 euros, but 80 percent of the first 1300 euros is paid by the taxpayer as a subsidy if you choose one of the 13,000 energy efficiency experts from the DENA database.

Subsequently, you fight for your best option. If it's district heating, you're fighting to get it to you. If it is not, you will fight against getting a mandatory connection. In the draft of the Heating Act, the traffic light deliberately did not provide for an obligation to provide district heating for such households. However, cities and municipalities could fall for the idea of compulsory connection and would already have a legal basis for it beyond the Heating Act. The expansion of new infrastructure will actually be cheaper if all households located there can be connected.

If your city or municipality really has to submit a heat plan in the coming years, and manages to do so despite the shortage of skilled workers, you as a citizen should fight for your district heating solution. Large cities with more than 100,000 inhabitants are to have to carry out such municipal heat planning by July 2026, small towns by July 2028 at the latest.

For current and future heat pump customers: The bill is still made for you. If you already have a heat pump at the start, you no longer have to convert and you don't care about rising costs for gas and oil. The traffic light coalition is apparently planning to significantly increase the CO2 tax on oil and gas heating systems in 2024 – from 30 to 45 euros per tonne of CO2. That would be an additional 5 cents per litre of heating oil. This year, the government had omitted an increase step in view of skyrocketing energy prices, which is now apparently to be made up.

For you with the heat pump, it doesn't matter at all.

And if you don't have a heat pump yet? But then let's go. The decision of the Federal Constitutional Court gives you breathing space. Order the energy efficiency expert now who will make a concept for you. You can find it sorted by postal code in this database . But don't just look in your small town. At the Schwedt refinery site, not a single expert was found in the database this week. In a 20-kilometer radius of my apartment in Berlin-Schönberg, there are over 360.

For those in need: There will usually be no shortage of funding in the future. According to the current draft, the subsidy for your new heating system should amount to at least 30 and at best 70 percent of a maximum of 30,000 euros in costs in the future. That would be up to 21,000 euros for low-income heating clients. If your heat pump – or another climate-friendly heating option – costs 35,000 euros, you have to pay the 5000 euros on top alone.

With the current subsidy, you will still receive up to 40 percent by the end of the year, in combination with subsidies from your state or municipality, up to 60 percent of all costs related to the scrapping of the old heating system and the installation of the new one. In the end, this can even be more than 21,000 euros.

Wood pellet and wood heating fans, monument owners, hydrogen junkies and other marginalized groups: For you, the current draft law already offers a lot of exemptions in which landlords and counsellors first have to find their way around. These are listed in paragraph 71d to h. To list all the possibilities here would go beyond the space. What many of them have in common is that the heating cost risk remains with the homeowner. Are there enough wood pellets cheap? Or enough biogas or even hydrogen, and at what price? Will your local gas supplier be able to convert its network to hydrogen – and what will it cost you? And finally, what does your municipality say about your specific concept with the heat planning?

If you make the decision only for yourself, it is your personal risk. If you also make the decision for your tenants, so much uncertainty can also make you think. Some may long for a few guardrails.

However, given the delay in passing the law, you should not get nervous.

• Perhaps it makes sense for you to take the current 2023 to 20 percent subsidy for tearing out the old heating system and installing the new one with you in 60 for a complete heating system replacement.

• Perhaps, as a higher earner, it even makes sense to carry out a gradual ecological upgrade of your house from 2023 to 2030, co-financed by currently available tax benefits.

• Or you, as a currently not so good earner, are waiting for the possible new subsidy of up to 70 percent from next year.

Equipped in this way, you can follow your plan.

Good luck!