Germany’s controversial heating law (Heizungsgesetz) sparked months of infighting between Scholz and his coalition government colleagues. Now that the law has been approved, what will it mean for renters in the federal republic?

German government votes through Habeck’s heating law

With 399 votes for, to 275 against, Germany’s coalition government has now voted through its legislation to slowly replace fossil fuel home heating systems with systems that use at least 65 percent renewable energy. The policy is part of Germany’s goal to reach nationwide climate neutrality by 2045.

After months of public infighting and compromises between the Greens and FDP, the law now little resembles that which was first outlined in March 2023. What was at first a relatively simple proposal from Greens Minister Robert Habeck became so chaotic that some named the public disagreements and lack of clear communication with voters as a reason why the AFD saw a sharp rise in the polls during the earlier months of summer.

The Heizungsgesetz is a “huge step for climate protection”, Greens representative Katharina Dröge told parliament. “We are approving a concrete timetable for how climate-neutral heating will succeed everywhere in Germany in the future”. While the policy has been praised for being a step in the right direction, critics point out that the goal of nationwide climate neutrality by 2045 is not in line with the Paris Agreement to keep global temperatures below 1,5 degrees.

When will the Heizungsgesetz come into effect?

The law still needs to pass through the Bundesrat in late September and is expected to come into force from January 1, 2024.

However, even after January 1, functioning energy systems that use fossil fuels can still be repaired and used. Only once the system is defunct will homeowners be obliged to replace it with a system running on 65 percent renewables.

It will also still be permitted to install a new gas heater after January 1, 2024, because it will be possible to convert the system to run on renewables at a later date. It is thought that around half of buildings in Germany run on fossil fuel heating systems.

What does the German heating law mean for renters?

Upon the legislation being passed, Dröge promised that the new heating law would be “reliable, predictable and affordable for all”.

Under the new law, anyone who wants to install a heating system that runs on renewables will receive a subsidy payment from the government which covers 30 percent of the installation costs. People working for lower wages will receive a payment covering 60 percent. To encourage a quick switch over to renewables, those who install the new system by 2028 can get another 20 percent of the costs covered.

However, there will be caps on subsidies. Each household will be able to have a maximum of 70 percent of the installation costs covered by government subsidies.

But given that 53 percent of people in Germany rent their homes, what will the new law mean for tenants? Under Habeck’s law, landlords will be responsible for installing the systems. Landlords who receive the subsidy will be able to pass on to tenants a maximum of 10 percent of the portion of the installation costs that were not covered by the subsidy.

Additionally, if they want to increase the monthly rent after the new system has been installed, these increases will be limited to a maximum of 50 cents per square metre and further limitations will be set if this rent increase amounts to 30 percent of the total household income.

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