KfW expects increased demand for heating subsidies.

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KfW anticipates increased requests for financing the exchange of old natural gas and oil heating systems for greener alternatives. KfW's domestic funding head, Katharina Herrmann, stated in Frankfurt, "We're in the second phase now. Our statistics show that the funding is functioning adequately."

By May 31st, the KfW had received around 34,000 grant applications with a combined value of 507 million euros, per Herrmann. The most frequently requested funding was for heat pumps, making up two-thirds of all new installations, followed by biomass heating. Funding for heating is a significant aspect of the building industry's energy shift, which generates one-third of CO2 emissions, said Herrmann.

Single-family homeowners living in their residences could submit applications for state-funded conversions from February 27th. From May 28th, private owners, multi-family home owners, and housing cooperatives' central heating systems were also eligible.

Since the commencement of the second phase, weekly applications have doubled according to Herrmann. From August onwards, private landlords, single-family home owners, and cooperative housing members seeking to update their heating systems will be permitted to apply along with municipal authorities and companies.

Grant aid can fund up to 70% of the cost (depending on the conditions), with 30% provided for both residential and commercial properties. Furthermore, there are additional bonuses, such as an income bonus and a speed bonus of 20% until 2028 for replacing older natural gas and oil heating systems, night storage heaters, and outdated biomass heating systems. Homeowners with heat pumps using water, earth, or natural refrigerants as a heat source or refrigerant are eligible for a 5% efficacy bonus.

Property owners who have signed a commitment with KfW for heating replacement can also apply for a KfW grant loan from an institution, usually their own bank.

"We believe the funding supply is appropriate," said Herrmann. This year, the German Ministry of Economics has allocated nearly 16 billion euros for federal funding for efficient structures (BEG), a program that also includes other rehabilitation measures like roof insulation and window substitute.

Read also:

1. The promotion of solar thermal energy for heating purposes is an essential part of Germany's climate goals, and KfW offers subsidies to facilitate this transition.
2. The increased demand for heating subsidies is partly driven by the government's emphasis on the energy transition, leading to more money being allocated for such projects.
3. KfW Banking Group, a development bank in Germany, has seen a significant rise in applications for funding to replace oil heating systems with greener alternatives, showcasing the importance of the Heating Promotion program.
4. Consumers are encouraged to utilize these subsidies, as they can fund up to 70% of the cost of upgrading their heating systems, with the remaining 30% coming from their own finances.
5. In Frankfurt am Main, KfW's Head of Domestic Funding, Katharina Herrmann, noted that funding for heating is a key component in the energy shift, aiming to decrease CO2 emissions, particularly in the building industry.
6. The promotion of heating subsidies has directly influenced the surge in applications for heat pumps, which have become the most popular choice for heating system replacements, accounting for two-thirds of all new installations.
7. Banks in Germany are also participating in the energy transition, offering KfW Banking Group loans to property owners who have signed a commitment for heating replacement, making the transition smoother and more affordable for consumers.
8. Oil heating, considered an outdated method, has found itself in competition with advanced technologies, as the KfW's funding program incentivizes the switch to more efficient energy sources, such as heat pumps.
9. The shift towards renewable heating sources, fueled by subsidies, is set to have a lasting impact on the German market, as consumers seek sustainable alternatives to their traditional heating methods, like oil heating.
10. The Energy and Climate Ministry in Frankfurt continues to promote events and initiatives aimed at encouraging adherence to renewable energy sources, recognizing that coordinated efforts from organizations like KfW Banking Group are crucial for a successful energy transition.

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