The new heating law

The so-called Heating Act was passed by the Bundestag with the votes of the traffic light coalition. Municipal heating planning plays a crucial role and the new regulations come into force on January 1, 2024.

The controversial amendment to the Building Energy Act (GEG) regarding the use of 65% renewable energies (RE) when installing new heating systems was passed in the Bundestag on September 8, 2023 with the votes of the SPD, Greens and FDP. The GEG does not contain an operating ban and, with the exception of 30-year-old standard boilers, no obligation to replace functioning heating systems, as was envisaged in the original draft. The law comes into force on January 1, 2024.

Until municipal heating plans are available, all previously permitted heating systems can continue to be installed, provided they can be operated proportionally with biomass or hydrogen from 2029. Before installing a new heating system, expert advice is mandatory for owners.

Oil heating systems can even be installed beyond 2026, as the previous installation ban will be lifted because they can be operated with e-fuels. However, from January 1, 2024, new-build areas will be required to use 65% renewable energy, whereby biomass may also be used. Exceptions apply for property owners in cases of social hardship.

Property owners have a choice of compliance options, such as connecting to a heating network, installing a heat pump (air, ground or water), installing biomass heating, installing gas heating (green gas or hydrogen), installing hybrid heating (fossil heating and 65% RE technologies) or installing direct electricity heating in well-insulated houses and owner-occupied detached and semi-detached houses.

From January 1, 2024, the creation of municipal heating plans will be required by law (Heating Planning Act). Replacing heating systems will be better funded via the 'Federal Funding for Efficient Buildings - Individual Measures' (BEG-EM) program. Heat planning is being introduced across the board and is mandatory until June 30, 2026 for municipalities with more than 100,000 inhabitants and until June 30, 2028 for municipalities with up to 100,000 inhabitants.

Regardless of whether the installation or replacement is scheduled or unscheduled, the requirements for the use of 65% renewable energy must be met if heat planning is in place. In the case of a shared heat generator, the obligation relates to the entire system; in the case of separate heat generators, it relates to the system to be replaced.

If a heat pump is installed, the landlord can only demand a full rent increase in accordance with Section 559 (1) BGB if the annual coefficient of performance of the heat pump is over 2.5, otherwise only 50 percent of the apportionable costs. The installation of a new heating system that meets the 65% EE requirement is considered a new modernization measure, whereby landlords have the choice of classifying this as either an energy modernization measure or a new measure.