Energy-saving renovation measures: advantages, costs and funding

What are energy-saving renovation measures? 

Many existing buildings date back to an era when energy efficiency and sustainability played a negligible role. Accordingly, the energy demand for heating the rooms in the building is high. Energy-saving measures encompass all renovation work aimed at improving energy efficiency in order to reduce precisely this energy demand as much as possible.

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The most common measures include:

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Thermal insulation 

• Insulation of the facade, attic ceiling and basement to reduce heat loss 

• Avoidance of thermal bridges (e.g. on roller shutter boxes) 

Optimize windows and doors 

•  Replacing old windows with double or triple glazed windows with insulated frames 

•  Airtight seals on windows and doors

Efficient heating systems 

• Replacing old heating systems (especially gas and oil heating systems with poor efficiency, as they cause increasingly high CO₂ emissions)

• Use of renewable energies (e.g. solar thermal or heat pump) 

• Optimized heating control (e.g. through smart thermostats) 

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Advantages: How you benefit from sustainable modernization

Even just a few of the measures mentioned can make a significant difference and help you save costs in the long term, act in the interests of the environment and increase the value of your property . 

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With a structured energy-saving renovation planned by experts, you will benefit from, among other things… 

• lower operating costs in the long term, 

• Savings from the annually increasing _CO2 tax, 

• an increase in the value of your property, 

• more comfort for users of the premises, 

• improved conditions for renting your property, 

• the possibility of grants, subsidies and tax deductibility. 

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How do I know whether implementation makes sense?

An energy-efficient renovation or partial renovation is generally a sensible option for improving the economic efficiency of your building. It is advisable to have specialists, such as energy experts, assess the potential for energy savings in your property. 

There is a clear need for action, for example in these cases: 

With high energy costs

Energy-efficient renovations help significantly reduce energy consumption. This not only benefits the environment but also saves you heating costs and CO₂ tax costs in the long run. If you're unsure, an energy consultation can provide information about whether an upgrade is cost-effective. 

With poor energy efficiency class

If your building has a poor energy efficiency rating (E, F, G, or H in the energy certificate), it makes sense to take action. Appropriate adjustments will increase the property's value.   

If modernization measures are pending anyway

If you're planning any construction work, you should consider the most energy-efficient calculations possible from the outset. As legal requirements become increasingly complex, this will ensure you're future-proof. 

When legal requirements must be complied with

Owners of older buildings constructed before certain construction years are particularly affected by the obligation to carry out energy-efficient renovations. The current guidelines and minimum requirements are defined by the EU Building Directive and the Building Energy Act (GEG). 

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In which cases am I affected by an obligation?

The energy-efficient renovation of buildings is a central component of the climate protection strategy in Germany and the European Union. There is no general obligation. However, owners must still comply with applicable law, especially when changing ownership.

Likewise, building owners must prepare for renovations when energy efficiency is particularly poor. 

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Generally, current regulations are defined by the EU Building Directive and the Building Energy Act (GEG) . You are affected by these and obligated to carry out energy-efficient renovations in the following cases: 

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Structural changes of more than 10% 

If you carry out major renovations to an exterior building component, it must meet energy standards after the renovation.

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Change of ownership 

Existing properties purchased, inherited or gifted after February 1, 2002, must meet minimum energy performance requirements within two years. 

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Heating replacement 

As of January 1, 2024, newly installed heating systems in new residential areas must use 65% renewable energy. Heat pumps could be a suitable choice in this case. 

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Renovation measures with the greatest savings potential

Which adjustments will benefit you most depends heavily on individual factors. However, practice shows that these measures consistently lead to success: 

• Replacement of heating systems, 

• Facade insulation, 

• Insulation of the top floor ceiling.

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What costs should I expect for the renovation?

It's impossible to make blanket statements about the costs of energy-saving renovations or individual measures. There are too many factors that determine the effort, materials required, and the total investment. Regional price differences, the age and condition of your building, the current energy efficiency class, and whether there are any legally required measures all influence this. 

It is therefore best to consult an experienced partner in advance, get detailed advice and a cost estimate. 

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Funding and grants for energy-saving renovation measures 

Under certain conditions, you may be eligible for subsidies for the energy-efficient renovation of your property. These are also an option if you only want to implement individual measures. 

You can expect financial support from, among others: 

• German Reconstruction Loan Agency (KfW), 

• Federal Office for Economic Affairs and Export Control (BAFA), 

• Regional funding programs of the federal states. 

It is important that you apply for the grants before the implementation begins, otherwise they cannot be approved. We therefore recommend that you to seek expert funding advice to check which options are available to you. 

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Claim tax relief after implementation 

According to Section 35c of the German Income Tax Act (EstG), 20% of the costs of energy-saving renovation measures (up to a maximum of €40,000 per project) can be deducted from income tax over three years. However, this only applies to buildings that you use for your own residential purposes.

If you rent out your property, you unfortunately cannot benefit from this tax relief. However, you can deduct the costs from your rental income as business expenses.

Since certain energy standards and requirements must be met for taxability, you should discuss this complex issue with your tax advisor in advance. They can also advise you on whether the deductibility is compatible with subsidies and grants.

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How do I know which renovation measures are relevant for me? 

Without explicit knowledge of your property, only theoretical assumptions can be made. Therefore, it's always a good idea to have a professional assessment conducted to identify potential measures. 

The appropriate contact points are: 

Energy consulting for buildings

The focus here is on technical measures to save energy and increase the economic efficiency of a building. The consultation typically includes an analysis of the current condition, recommendations for appropriate renovation measures, and funding opportunities. 

Energy consulting is useful if you… 

• want to take concrete remedial measures, 

• require an individual restructuring plan (iSFP), 

• would like to apply for state funding (e.g. KfW, BAFA). 

• want to create or renew an energy certificate, 

• Reduce operating costs, 

• Comply with legal requirements (GEG, MEPS) 

Suitable for private owners, property managers and municipal building operators.

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ESG consulting for real estate

ESG consulting offers a holistic approach that focuses on sustainability, social responsibility and corporate governance (or owners, investors or managers). 

It is the right choice if you… 

• must comply with statutory ESG reporting requirements (e.g. CSRD), 

• want to develop an ESG strategy, 

• plan green financing (e.g. green bonds, sustainability loans), 

• want to make the building more attractive to investors. 

Suitable for investors, entrepreneurs, institutional owners. 

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