Investments in Energy-Efficient Building Renovation Are on a Downward Slide

Abstract

According to the latest review report of the Council of Experts on Climate Change, the German building sector failed to meet its greenhouse gas emission reduction targets in 2022. This is in part because investments in energy-efficient building refurbishment—supported by all kinds of policy measures— has neither been low nor shown a consistently positive trend over the past ten years. Furthermore, data from the DIW Berlin construction volume calculation and the Heinze GmbH modernization volume show the price-adjusted development of investments in energy-efficiency building renovation for the first time. There have been significant declines in investments in insulation, the replacement of windows and exterior doors, and the renewal of heating systems in many years. Although policymakers are currently making funds available to provide more support for such investments again, the subsidy volume is likely to be too low considering current and likely further price developments. However, a coordinated expansion of production as well as installation capacities is required to prevent additional funding from being canceled out by price effects.