Demand for solar heating in Germany rises with higher subsidies

Demand for solar heating systems in Germany has risen markedly in the first three months of 2020 as subsidies for sustainable heating increased at the beginning of the year and a carbon price for fossil-fuels loomed, says the German Solar Association (BSW). Sales of solar thermal collectors have recently "picked up noticeably," the BSW said, and interest in relevant subsidies has grown significantly. Despite the impacts of the coronavirus on the solar industry, the business climate index compiled by the BSW reached a ten-year high, climbing from 70 to 134 points from January to March. "A short-term corona dent should be followed by a wave of investment. The intensified climate debate of recent years, significantly improved subsidy rates and the introduction of an annually increasing CO2 price starting next year are having an effect," said Carsten Körnig, CEO of the BSW.

Renewable energies covered 14.5 percent of Germany's final energy demand for heating in 2019 – a level that had largely stagnated for a decade – while solar heating made up just 4.8 percent of this. At the end of 2019, Germany had about 2.4 million solar heating systems, with 71,000 installed the same year. Since the beginning of 2020, subsidies have covered up to 45 percent of the investment costs for installing a solar heating system in existing buildings in Germany. It has for some years been mandatory to use renewable energies for heating in new buildings. The increased subsidies are part of the government's climate package passed in fall 2019, which also includes a carbon price for heating and transport sectors.