#GreenRecovery: Adaptation of Subsidy Programs is Key Now

It is great to see that the German government decided on a green recovery package. It increased the budget for #EnergeticRenovation programs for private and public buildings, and social facilities significantly by 2 billion EUR in 2020 and 2021 totaling each year 2,5 billion EUR to reduce our #CO2emissions.

#GreenRecovery: Adaptation of Subsidy Programs is Key Now

Now it is key to build up momentum and boost the market in energetic renovations! And most important: The government will not reach this only by increasing the budget of the existing programs. And that's why:

The utilization of the current public programs in 2019 was 65%. This shows the efficiency of the programs has to be improved and adapted to the new normal we face in this crisis. Otherwise, we will not realize the economic recovery effects that we need.

So, how can the government adopt and set a rapid impulse in energetic renovations:

  1. Introduce public investment grants to overcome cash restrictions resulting from the #CoronaCrisis: Investors have to manage their cash flow during the crisis more than ever. Public grants will reduce investors’ cash restrictions and push renovation initiatives.
  2. Simplify existing subsidy programs to reach more renovation potential: Differentiate between energy levels and corresponding subsidies. Lower procedural requirements, at least for lower subsidy levels and homeowners to give easy access to subsidies. This will suit a much more significant potential for renovation projects.
  3. Enhance incentives for energetic investments in rental properties to cut tenants energy bills (see as well the new study from Prof. Dr. Sven Bienert, commissioned by the German Housing Association GDW, Tenants Association DMB and Housing, Urban and Spatial Development Association DV)
  4. Introduce higher tax incentives to generate additional renovation initiatives.
  5. Activate public investment quickly: From planning to realization usually takes up to several months in a renovation. To get an impact on the market, we need fast project decisions.

The industry needs fast changes. We face weakened demands. We should close up with the stimulus. And the market needs easy access to the subsidies. Only this will lead to a quick recovery.

This article was originally published on LinkedIn in June 2020.

1650
Author

Dr. Lars Lehmann

General Manager URSA Deutschland

ursa@ursa.com