12/16/2025

Building Modernisation Act as an opportunity

Thinking about heat generation and efficiency together – for growth, jobs and acceptance

The announcement by the coalition committee that the current Building Energy Act will be replaced by a ‘Building Modernisation Act’ next year offers, in the view of industry experts, an opportunity for a more integrated policy that addresses climate-neutral heat generation, efficient building technology and structural thermal insulation together.

A combination of efficiency measures and energy source conversion is particularly important to all three project participants, such as Peter Mellwig from ifeu – Institute for Energy and Environmental Research, in order to minimise foreseeable bottlenecks in the energy system and risks to costs and acceptance: "Especially in today's world with all its uncertainties, it simply makes sense to take a two-pronged approach here. We can reach our goal faster and more reliably, while also bringing buildings up to standard that would otherwise have incurred very high energy costs. Energy suppliers and network operators are also increasingly concerned that they could otherwise reach their limits."

A comprehensive modernisation approach not only makes sense in terms of energy and climate policy. It also strengthens the regional economy, creates and secures jobs, and reduces dependence on fossil fuel imports – with positive effects for public budgets and social security systems. New calculations by Prognos AG on behalf of DENEFF show that energy-efficient renovation already accounts for around 2.5 per cent of Germany's gross domestic product and supports around 600,000 jobs – primarily in the skilled trades, construction industry and innovative SMEs. A gradual increase in the renovation rate could enable GDP growth of up to 3.4 per cent in the medium term.

From the experts' point of view, what is now needed is a stringent mix of legal regulations, adequate subsidies and clear price signals. These instruments must be consistently coordinated so that modernisation projects can be initiated and planned. The key components for this are reliable continuity in the heating sector and the rapid implementation in Germany of the EU Buildings Directive, which was already adopted in 2024.

Excerpt from the DENEFF press release, 16 December 2025

To the full press release (in German)