Energy-efficient heat transition for all households

The provision of heat to buildings constitutes a significant portion of CO2 emissions in Germany. Presently, the building sector falls short of meeting the climate objectives outlined by the German government for 2023. According to an amendment to the Federal Climate Change Act in 2021, the building sector must reduce greenhouse gas emissions by around 69 per cent by 2030 compared to 1990 emissions. In order to reduce CO2 emissions, achieve the targets of the Federal Climate Protection Act and drive forward the national energy transition, costly changes such as thermal refurbishment or the use of new heating systems are required. However, low-income households in particular face financial challenges when implementing such measures.

One of the main problems is that many low-income households rent their accommodations and are responsible for covering their energy expenses. Landlords bear the costs of renovations and can only partially pass these on to the rent. Consequently, they see no direct financial incentive for undertaking renovations. Low-income households, being a vulnerable demographic, often struggle to cope with rent increases and are at risk of displacement. Despite the lack of incentives, energy-efficient refurbishment also offers advantages for both parties: Landlords benefit from an increase in the value of their property and tenants benefit from lower energy costs and improved living conditions.

Creating Financial Models for Energy Efficiency in Low-Income Households

In collaboration with partners from academia, the financial sector, the housing industry, and energy supply, our research team formulated solution strategies across three designated regions in Germany: Baden-Württemberg, Berlin, and North Rhine-Westphalia. These strategies were aimed at addressing the financing challenges associated with enhancing energy efficiency in low-income households while avoiding imposing additional financial burdens on them. Our ultimate goal was to scale the outcomes of our research for broader implementation across Germany, thereby facilitating nationwide efforts towards sustainable energy practices.

Decisive steps in the INVEST project

The INVEST project undertook several key actions, including:

• Formulating viable strategies for implementing socially and technically innovative financing mechanisms, tailored to both national and local contexts;
• Fostering awareness of these measures through focused dialogue and stakeholder engagement;
• Conducting feasibility studies to evaluate the potential implementation of selected financing instruments, drawing insights from case studies conducted in Baden-Württemberg, Berlin, and North Rhine-Westphalia;
• Creating a decision support system and devising an implementation strategy to facilitate the transferability and replication of innovative financing mechanisms throughout Germany.