Building Energy Act (GEG)

GEG (Building Energy Act) - The Building Energy Act is Germany’s primary law governing energy requirements for buildings and, since November 2020, has regulated energy efficiency in the construction, renovation, and operation of residential and non-residential buildings. With the amendment effective January 1, 2024 - colloquially known as the “Heating Act” - the requirements for climate-friendly heating systems were significantly tightened.

What does the GEG regulate in detail?

The Building Energy Act consolidates the former Energy Saving Ordinance (EnEV), the Energy Saving Act (EnEG), and the Renewable Energy Heat Act (EEWärmeG) into a single set of regulations. It defines binding standards for the thermal insulation of the building envelope, the efficiency of building services systems, and the use of renewable energy.

The 2024 Amendment introduced the most significant change: In new development areas, as of January 1, 2024, every newly installed heating system must be powered by at least 65 percent renewable energy. For existing buildings and new constructions outside new development areas, this requirement applies only once the respective municipality has submitted a municipal heating plan-by June 30, 2026, at the latest, for large cities such as Nuremberg, and by June 30, 2028, for smaller municipalities.

Existing, functioning heating systems are grandfathered and may continue to be operated. Transitional periods apply only in the event of a defect that makes repair uneconomical: owners then have five years to switch to a GEG-compliant system. Oil and gas heating systems installed before 2024 may continue to be operated with fossil fuels until 2044 at the latest.

Another key regulation concerns the mandatory replacement of old heating systems: Oil and gas boilers that are more than 30 years old and do not use low-temperature or condensing technology must be replaced. In the event of a change of ownership, a renovation requirement also applies: New owners must retrofit certain minimum energy standards within two years of purchase, such as insulating the top floor ceiling or insulating heating pipes in unheated rooms.

Municipal Heat Planning and GEG Compliance Options

Municipal heat planning is key to the timeline for existing buildings. As soon as a municipality submits its heat plan, the 65% renewable energy requirement takes effect for newly installed heating systems in existing buildings. Owners then have several compliance options: installing a heat pump, connecting to a district heating network, a hybrid heating system combining a heat pump and a gas boiler, direct electric heating, biomass heating, or a heating system based on green hydrogen. So-called solar thermal hybrid solutions are also recognized.

Extensive subsidy programs are available for the conversion: The Federal Subsidy for Efficient Buildings (BEG) through KfW provides grants of up to 70 percent of eligible costs - consisting of a base subsidy of 30 percent, a climate speed bonus of 20 percent for the early replacement of fossil fuel heating systems, and an income bonus of 30 percent for households with a taxable annual income below 40,000 euros.

Practical Tip for Property Owners in Nuremberg and Franconia

The City of Nuremberg is currently working on its municipal heating plan, which is expected to be published by mid-2026. Until this plan is published, owners of existing buildings may generally still install fossil fuel heating systems-however, we recommend planning for the future now. Anyone installing a new gas heating system today must begin incorporating increasing shares of renewable energy starting in 2029 and fully convert the heating system by 2044 at the latest.

Early energy consulting is particularly advisable in Nuremberg’s older neighborhoods such as Gostenhof, St. Johannis, or the Südstadt, as many post-war buildings have significant energy efficiency gaps that need to be addressed. The City of Nuremberg offers free initial consultations through the energy advisory service of the Bavarian Consumer Center. When selling real estate, the current GEG status is an increasingly important factor in determining value-we take the energy efficiency status into account in every real estate appraisal in the metropolitan region.

Frequently Asked Questions

Do I have to replace my functioning gas heating system immediately?

No, existing heating systems are grandfathered in and may continue to be operated. The 65% renewable energy requirement only applies to existing buildings once the municipality has submitted its heating plan and a new heating system is installed. Even then, there are generous transition periods. In the event of an irreparable defect, owners have five years to make the switch, during which time a used fossil fuel heating system may also be installed on a temporary basis.

What obligations arise when purchasing an existing property?

When ownership of an existing property changes, the GEG stipulates that new owners must fulfill certain energy retrofit obligations within two years. These include insulating the top floor ceiling or the roof, insulating exposed heating and hot water pipes in unheated rooms, and replacing boilers that are older than 30 years and do not use condensing technology. These obligations apply regardless of municipal heating plans.

How much is the subsidy for a new heating system under the GEG?

The federal subsidy through KfW can cover up to 70 percent of eligible costs. The base subsidy is 30 percent for each GEG-compliant heating system. Additionally, there is a climate speed bonus of 20 percent if a functioning fossil fuel heating system is voluntarily replaced ahead of schedule, as well as an income bonus of 30 percent for households with an annual income below 40,000 euros. The maximum subsidy amount is capped at 70 percent, and eligible costs are capped at 30,000 euros for the first residential unit.

What impact does the GEG have on property value?

Energy-efficient buildings are increasingly commanding measurable price premiums on the Nuremberg market compared to comparable, non-renovated properties. Our market observations show that existing buildings with energy efficiency class A or B can achieve price premiums of 8 to 15 percent over class F or G properties-especially since the tightening of GEG requirements and rising energy prices. When purchasing an existing property in Franconia, prospective buyers should view the energy performance certificate not merely as a mandatory document, but as an important indicator of future investment needs: A building in Class F or G will require heating system modernization and, in most cases, additional insulation measures in the foreseeable future-costs that must be realistically factored into the purchase price. We take energy efficiency into account in every one of our property appraisals in the metropolitan region and clearly present the GEG status in the property listing.

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