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Investments in Energy-Efficient Building Renovation Are on a Downward Slide

Author

Listed:
  • Martin Gornig
  • Katrin Klarhöfer

Abstract

According to the latest review report of the Council of Experts on Climate Change, the German building sector failed to meet its greenhouse gas emission reduction targets in 2022. This is in part because investments in energy-efficient building refurbishment—supported by all kinds of policy measures— has neither been low nor shown a consistently positive trend over the past ten years. Furthermore, data from the DIW Berlin construction volume calculation and the Heinze GmbH modernization volume show the price-adjusted development of investments in energy-efficiency building renovation for the first time. There have been significant declines in investments in insulation, the replacement of windows and exterior doors, and the renewal of heating systems in many years. Although policymakers are currently making funds available to provide more support for such investments again, the subsidy volume is likely to be too low considering current and likely further price developments. However, a coordinated expansion of production as well as installation capacities is required to prevent additional funding from being canceled out by price effects.

Suggested Citation

  • Martin Gornig & Katrin Klarhöfer, 2023. "Investments in Energy-Efficient Building Renovation Are on a Downward Slide," DIW Weekly Report, DIW Berlin, German Institute for Economic Research, vol. 13(32/33), pages 225-232.
    • Handle: RePEc:diw:diwdwr:dwr13-32-1
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    More about this item

    Keywords

    Energy-efficient building renovation; construction industry; building investment;
    All these keywords.

    JEL classification:

    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • Q40 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - General

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