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The Building Energy Act

The Building Energy Act (GEG) took effect on November 1, 2020. It replaced, expanded, and updated the previously developed energy regulations for buildings. It applies to all buildings that are heated and/or cooled with energy, and it was amended on 01/01/2023 and 01/01/2024.

The current version of the GEG sets clear regulations for all newly built residential and non-residential buildings regarding their annual primary energy demand, tightness, heat and cold insulation, and tolerable heat losses. The law also requires retrofitting existing buildings to improve their energy efficiency and bring their heating technology up to date. In short, existing buildings must be modernized to meet current energy standards, provided the upgrades are cost-effective given the building's remaining use of the property.

In the case of detached and semi-detached houses, the economic viability proviso for retrofitting obligations §47 GEG applies:
If the necessary modernization effort would lead to undue hardship for the owner, the respective regulations cannot be enforced.

After a fundamental renovation, buildings should cover part (65%) of their heating and cooling requirements with renewable energies. Recognized renewable energies are solar radiation energy, solid and liquid biomass as well as renewable cooling and wind energy. District heating and cooling would also be eligible, provided they are available locally.

Approval is granted for new buildings:
- Connections to a heating network (in accordance with § 71b), with differentiated requirements for new and existing networks
- Electric heat pumps (in accordance with § 71c)
- Direct electric heating systems (in accordance with § 71d), in conjunction with requirements for structural thermal insulation
- Solar thermal systems (in accordance with § 71e), if they completely cover the building's heating requirements
- Heating for the use of biomass, green or blue hydrogen (H2) (in accordance with Section 71f)
- Heating for the use of solid biomass (in accordance with § 71g)
- Heat pump hybrid heating or solar thermal hybrid heating with a gas, biomass or liquid fuel firing system (pursuant to § 71h)

Energy performance certificates are a legal requirement for buildings since 2002. Energy performance certificates are required for buildings built from 1965 onwards. They are issued for new buildings as demand certificates and for existing properties as consumption certificates. They show the energy properties and heating system technology of a building, which allows for an accurate estimation of the expected energy consumption and the associated costs. In Germany, only trained specialists/energy consultants are permitted to issue energy performance certificates. When selling and major refurbishing detached and semi-detached houses, the new owner is legally required to obtain advice on necessary energy-related measures from a specialist company authorized to issue certificates. This advice must be provided free of charge.

An energy performance certificate is not mandatory for listed buildings or properties with a small usable area.

The GEG does not apply to the following buildings:
Animal stables, long-term open buildings, underground buildings, greenhouse facilities, air domes, tents, temporary buildings with a useful life of less than two years, churches, and other buildings for worship and religious purposes.
Vacation and weekend homes as well as low-heated and temporarily air-conditioned business buildings.

It is the responsibility of the builders or owners of the property to ensure compliance with the GEG requirements. The first point of contact for your property with regard to individual GEG requirements, is your district chimney sweeper or your property management company, an energy consulting company and, if necessary, your experts.

The GEG also includes innovation clauses, neighborhood solutions, a ban on the installation of new oil- and coal heating systems in order to reduce greenhouse gas emissions from buildings, an obligation to inspect air conditioning systems, etc.

Let me be clear:

The legislator specifies, which measures are up-to-date and which are now "antiquated" depending on the type of building and use, the age of the building, and the type of equipment. The federal government, federal states, local authorities, and financing banks (KFW - Kreditanstalt für Wiederaufbau) are working on funding and financing options. However, sensible investors/owners should save enough equity over the useful life of old properties by building up maintenance or renovation reserves, to pay for the respective energy-related modernization measures. In theory.
But, we must also consider the reality of the situation: the ongoing maintenance of the building, repairs of structural damage during the management phase ect., uses up these budgets and reserves in cases. It is a simple fact that not every portfolio holder/owner has the necessary liquidity immediately at their disposal. The economic consequences of the pandemic – even without a turn of an era – are still ongoing. You can find current funding opportunities via the corresponding KFW link below.

So, the legislator has granted transitional periods in the following cases:
- in the event of an unscheduled failure of a heating system that is then irreparable (Section 71i);
- to enable better coordination with municipal heating planning (§ 71j);
- in order to wait for the expansion of a hydrogen network with a gas heating system that can be converted to 100% hydrogen (§ 71k)
This applies to buildings with at least one floor heating or individual firing system (§ 71l). It also applies to communities of owners with a prescribed schedule and procedure (§ 71n). In these cases, the law requires that advice be provided on the gradual conversion to renewable energy sources (Section 71 (8) to (11)).

The deadline for the end of the use of fossil fuels for heating is December 31, 2044. (§ 72 para. 4)

Fines of up to € 50,000.00 may be imposed for failure to comply with the requirements of the GEG.
For more information, see this link:

https://www.kfw.de/inlandsfoerderung/Privatpersonen/Bestehende-Immobilie/Energieeffizient-sanieren/

The Building Energy Act - Guidelines for building owners and users, can be downloaded free of charge as a PDF from the Bavarian Chamber of Engineers:

https://www.bayika.de/de/beratung-und-service/download/produkte/bayika_geg-gebaudeenergiegesetz-leitfaden-bauherren-anwender_0043.php