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ENERGY

Reader Question: Should I install a new gas heater in my German home?

Under Germany's controversial heating bill, broken gas and oil heating systems will need to be replaced by eco-friendly alternatives in the coming years. So does it make sense to install a gas heating before the law comes into force next year? We take a look.

Reader Question: Should I install a new gas heater in my German home?
A gas heating system in a German home. Photo: picture alliance/dpa | Patrick Pleul

If you’re a homeowner in Germany, you may be wondering how the government’s new Building Energy Act will affect your finances.

Nicknamed the Heating Bill, the legislation is designed to phase out gas and oil heaters between 2024 and 2045 – and the onus will largely be on owners to swap their existing heating system for a green alternative.

Fears of having to shell out for a pricey renewable heating system such as a heat pump have led to a surge in the sales of gas heaters recently. But consumer rights experts say this isn’t a sensible move.

Speaking to the regional Rheinische Post recently, Ramona Pop, the CEO of the Consumer Rights Agency (VBZ) warned homeowners against rushing out to buy a brand new gas heater in the coming months.

That’s because the price of gas is likely to go up significantly in the coming years as a result of the government’s CO2 tax. Hikes in the tax had been paused during the cost of living crisis but are now set to rise again year-on-year. 

“In 2024 alone, the price for one tonne of CO2 is to rise by 17 percent to €35,” Pop explained. 

Since gas heaters produce around 200g of carbon dioxide per kilowatt hour of energy, this could add a significant amount to household heating bills over time – and owners would still have to consider swapping out their heating system at some point in the future.

For example, in a two-room flat with an average use of 10,000 kilowatt hours of energy per year, bills would cost an additional €70 in 2024 alone. This would then rise as the CO2 tax goes up in subsequent years. In contrast, the cost of producing heat through renewable systems is much cheaper over time.

There’s also the risk of consumers falling prey to price gouging if they rush into a purchase of a new heating system. In the past two years alone, almost all types of heating systems – including gas – have become significantly more expensive in Germany.

READ ALSO: What homeowners in Germany need to know about the new heating bill

“On average, the prices for heating systems have increased by around 25 percent in 2021 and probably even a bit more in 2022,” Stefan Materne from the VBZ’s energy advisory service told DPA. 

In the case of gas heaters, this is even higher, with the average price of installation skyrocketing from €6,000 in 2021 to €10,000 this year.

Though part of this can be explained by increased material and energy costs, it’s also due to an “overheated market”, Materne explained.

Subsidies and extended deadlines for homeowners 

With so many rumours swirling around the government’s heating bill over the past months, most homeowners would be forgiven for being confused about what is actually being asked of them – so it’s worth giving a quick overview of the latest proposals.

Firstly, the vast majority of homeowners have been given an extended deadline in the latest version of the bill – and even then, they probably won’t have to swap out their heating systems straight away.

Under the terms of the bill, people with gas and oil heaters will have to replace them with a heating system run on a minimum of 65 percent renewable energy once they have broken down entirely.

An electronic thermostat

An electronic thermostat displays the “Off” sign. Photo: picture alliance/dpa | Friso Gentsch

Until then, they can continue to have them repaired if faults do arise.

In addition, this rule will only come into force after the local authorities have submitted their own heating plan for a city or district, which will give owners more transparency about their options. Local governments in big cities have until 2026 to do this, while municipalities have until 2028, though some authorities may manage to do this more quickly.

READ ALSO: German government scraps exemption for over-80s in controversial heating law

Until this point, new gas and oil heaters can be installed as normal – though once again, consumer experts advise against doing this. 

Though some details still need to be worked out in the bill, it looks like up to 70 percent of the costs of the refit will be paid for by the government through subsidies.

This includes a 30 percent subsidy on all renewable heating systems, 20 percent for households who swap their system before the deadline and an extra 30 percent for people earning under €40,000 per year. Up to €30,000 of the cost of the new heating system will be eligible for government subsidies.

READ ALSO: German government to subsidise up to €30,000 of heating revamp costs

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For members

CLIMATE CRISIS

Where in Germany do homeowners face the greatest flood risk?

As extreme weather events are becoming more common and more costly, homeowners are struggling to insure their homes in certain places. The Local takes a look at insurance options and flood risks in Germany.

Where in Germany do homeowners face the greatest flood risk?

Recent bouts of heavy rain caused flooding and landslides in Saarland, Rhineland-Palatinate and parts of Bavaria. 

With more rain in the forecast for many parts of Germany in the coming days, these and other regions of the country may see further water and flood damages soon.

Extreme weather events are becoming both more common and more intense due to man-made climate change, and in some places this is creating havoc for homeowners. Recent reporting from the US, for example, shows that home insurance premiums have skyrocketed in some regions due to increased risks from extreme weather events.

Meanwhile, certain major insurance companies have stopped covering some regions entirely – causing some to prophesise the end of the insurance market as we know it.

While Germany doesn’t get the hurricanes or tornadoes that have made some regions in the US virtually uninsurable, it has suffered major flooding events in recent years and climate experts only expect these to get worse.

Which parts of Germany face the greatest flood risk?

A recent study by the German Insurance Association (GDV) found that 300,000 addresses in Germany are at risk of flooding.

According to the GDV study, which used public data to analyse the risk for 22.4 million addresses, the highest proportion of vulnerable properties was found in Saxony, where almost 3 percent were located in flood zones.

Thuringia and Rhineland-Palatinate had the next highest proportion of homes at risk, with 2.7 and 2 percent respectively.

But flood risk is better understood at the district level. The District of Cochem-Zell in Rhineland-Palatinate is the most affected with 10.5 percent of its addresses located in a flood zone. The nearby district of Koblenz is also a high-risk zone, as well as the district of Gera in Thuringia and Euskirchen in North-Rhine Westphalia.

Dresden is also a city of note for flood risk.

The state with the lowest proportion of homes in flood zones was Schleswig-Holstein. The city-states of Hamburg and Berlin were also among the least affected regions.

flood risk map

Title reads ‘current flood situation’. The graphic depicts a flood-risk map during a heavy storm on May 1st. Image: picture alliance/dpa/dpa Grafik | dpa-infografik GmbH

Most homes in Germany are not in risk zones

Generally speaking, the vast majority of homes in Germany are not considered to be in high-risk flood zones.

A spokesperson for Allianz, a leading insurance company, explained that in Germany insurers assess risk with a zoning system for flooding, backwater and heavy rain called the ZÜRS system that was developed by the GDV. 

In the ZÜRS system, each address in Germany can be assigned a classification (1-4) where class 1 is the lowest risk and class 4 is the highest risk. Class 2 suggests that a severe flood can be expected once in 100 years, class 3 suggests that a severe flood could occur once every ten to 100 years, and class 4 signifies that a severe flood could be expected every ten years.

Of about 22 million addresses classified by ZÜRS, 99.6 percent are in hazard classes 1 to 3. Specifically, 92.4 percent belong to class 1 with the lowest risk. Class 2 has 6.1 percent, class 3 has just 1.1 percent.

This leaves just 0.4 percent of German households in the highest hazard class 4, where flooding can be expected every decade.

How are flooding risks affecting house insurance?

General homeowner’s insurance (Wohn­gebäude­versicherung) or household contents insurance (Hausrat­versicherung) typically covers damages related to fire, water damage from burst pipes, burglary, robbery, vandalism following a break-in and sometimes storm and hail.

Whereas natural disasters caused by heavy rain, like flooding, landslides and avalanches are not covered by basic insurance, they may be covered by supplementary “extreme weather protection” (Extrem­wetter­schutz).

Major insurers in Germany have adopted a procedural change following the major flooding events of 2021, which killed nearly 200 people in Germany and cost billions in insured losses.

“Until 2022, we offered [extreme weather protection] in the so-called opt-in procedure,” a spokesperson for Allianz told The Local – meaning that customers would need to additionally select the added protection themselves to be covered.

“Since February 2022, our insurance offers for household contents and homeowner’s insurance have been changed so that natural hazard protection is offered automatically and our customers must consciously deselect it if they do not want it,” they said.

Is anywhere in Germany uninsurable?

Insurance claims do seem to be getting more expensive for insurance providers. 

In 2023, Allianz spent a total of €987 million on losses caused by natural hazards in Germany, as opposed to €627 million in 2022.

The company attributes the cost increase partially to the devastating storms in August 2023, along with claims becoming comparatively expensive due to inflation.

However, Allianz suggests that for now homeowners in Germany shouldn’t have a hard time securing the insurance that they need. 

Even in class 4 flood zones, the company suggests that it examines the risk individually and works with higher deductibles where necessary.

However, there are some places where homeowners may have a hard time getting flood protection.

“There are still municipalities that allow building in a flood-prone area,” the Allianz representative said. “And there are houses in places such as Passau that are regularly flooded. These owners know this and take appropriate structural precautions.”

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