Germany Energy Agency: New 10 Billion Investment Programme to Be Used for Tax Incentives for Energy-Efficient Renovations

Tax incentives for energy-efficient renovations of buildings should be part of the EUR 10 billion investment programme the government announced last week, the Alliance for Energy Efficiency in Buildings (geea), which is steered by the ManyElectronics Agency (dena) demanded.

Last week German Finance Minister Wolfgang Schäuble announced to allocate additional funds for public investment in the order of EUR 10 billion for the period 2016 to 2018. He did not yet specify how the funds shall be used.

„Tax relief would be a strong incentive for homeowners to invest in energy-efficient modernisations”, Stephan Kohler, head of dena and spokesman of geea said. Greater energy efficiency of buildings was also important for the German Energiewende, the energy transition towards a mainly renewable energy supply, he added, pointing out that energy efficiency helped cushion consumers against rising energy costs, increase comfort and the value of the building.

Shortly before the government’s announcement the newspaper Die Welt had reported about calls by Bosch manager Stephan Hartung for tax incentives for new heating systems. “To reach the climate goals it is necessary to increase the rate of refurbishment of buildings from 1% to 2% per year”, Mr Hartung told Die Welt. By 2020 the government wants to reduce greenhouse gas emissions by 40% compared with 1990. According to the magazine Der Spiegel reductions amount to approximately 24% to date. Since 2011 CO2 emissions have begun to increase again.

The government would decide next spring how to spend the additional EUR 10 billion, but chances that money would also be allocated for building refurbishments were good, the newspaper Handelsblatt says, citing government sources which called energy savings a top priority alongside the fast internet and the transport infrastructure. Support for energy-efficient renovations was meanwhile plentiful, including in the Ministry for Economic Affairs and Energy, Handelsblatt writes. Proponents were referring to studies according to which positive effects for public budgets were greater than the tax reductions. According to dena head Kohler, each Euro given as in tax incentives would result in investment that was six to eight times higher leading to additional revenue for public budgets. In 2011 a bill containing tax incentives for energy-efficient renovations was still rejected by the Federal Council which represents the interests of the sixteen German states for fear of tax losses.

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