Deneff calls for social contracting for the heating transition

09.04.2025

Source: E & M powernews

A new "DENEFF EDL_HUB" model is intended to accelerate the heating transition and at the same time relieve the burden on low-income households.

The heating transition in Germany is a difficult undertaking that demands high levels of investment from local authorities and energy suppliers. A partly unclear political framework and a considerable renovation backlog in the building industry are obstacles to a rapid transition to a climate-friendly and socially balanced heat supply.

Against this backdrop, the Deneff EDL_HUB, which was founded by the energy efficiency association Deneff and in which companies from the energy industry have joined forces, is particularly concerned about low-income tenants who live in unrenovated buildings and suffer disproportionately from rising heating costs.

With these challenges in mind, the Deneff EDL_HUB has introduced the concept of social contracting. In a recent policy brief, the network for energy efficiency services shows how this model can make a targeted contribution to the modernization of heating systems and at the same time strengthen the social dimension of the heating transition.

"The technology, the expertise and the capital are there - now we need the right political decisions to use social contracting to make the heating transition not only climate-friendly, but also socially just and achieve the climate targets," says Rüdiger Lohse, Managing Director of Deneff EDL_HUB.

The appeal is primarily aimed at the future German government. Social contracting must be firmly anchored in the heating transition policy. At the same time, the EDL_HUB is calling for the Heat Supply Ordinance and the Ordinance on the General Terms and Conditions for the Supply of District Heating to be made more market-oriented. Initial indications in the coalition negotiations suggest that reforms are planned in this direction.

Heat transition must not exclude social justice

The core of the model is a new distribution of roles that removes financial hurdles for owners and distributes the costs to tenants in a socially responsible manner:

Investments by energy service providers: municipal utilities or specialized contractors take over the financing and implementation of heating modernization, eliminating high upfront costs for owners.

Refinancing via the heat price: The costs are refinanced over a longer period via the heat price - the monthly charge remains the same for tenants.

Subsidies without side effects: Subsidies from the European Social Climate Fund or a new infrastructure fund ensure that modernizations do not lead to rent increases, but reduce heating costs in the long term.

Targeted social security: Subsidies are earmarked, easily accessible and aimed specifically at low-income households - for example via housing entitlement certificates.

Incentive for efficiency: Energy service providers bear the operating cost risks and therefore have a vested interest in permanently functioning and efficient systems.

According to Deneff, social contracting can achieve far more than traditional subsidy models. It is a strategic instrument that addresses several challenges at once: the renovation backlog in the building sector, social inequality in energy costs and the sluggish expansion of climate-friendly heating solutions.

"This is a strategic solution to decisively advance the heating transition in Germany. Through the targeted use of this model, tenants can benefit from stable housing costs, owners are supported in modernization and the heat supply becomes more climate-friendly," says Lohse. At the same time, social acceptance will increase because low-income households will no longer be disadvantaged.

Author: Fritz Wilhelm