Backlog demand for energy-efficient building refurbishment
10/20/2023 Source: German Institute for Economic Research e.V.
The building sector in Germany missed its CO2 reduction targets last year, mainly due to insufficient investment in energy renovations.
According to a recent study by the German Institute for Economic Research (DIW Berlin) in cooperation with Heinze GmbH, property owners invested around 67 billion euros in energy renovations in 2022, which was 40 percent more than in 2011, but still lower than eleven years ago when adjusted for inflation.
Energy renovations, including insulation, windows and heating systems, were not sufficiently advanced. In particular, compared with the new construction sector, which grew by 40 percent over the same period, energy-efficient renovations have become less important. This was partly due to a lack of capacity in the construction industry, as new construction was seen as more profitable.
The study authors emphasize that there is an opportunity to increase capacity for energy retrofits in the coming years, as fewer new buildings are planned and increased energy prices provide incentives. However, the challenge remains significant, as the rate of retrofits will need to increase substantially to meet CO2 reduction targets.
To address this issue, the authors suggest establishing coordinated action between producers, construction companies, and investors, and distributing government subsidies more efficiently. This also requires the establishment of a coordinating body to increase capacity in the redevelopment industry. An example of this could be the U.S. approach to building vaccination capacity during the Corona crisis.
Accessibility
Language
