How facade insulation can save hundreds of thousands of euros

Berlin In times of rapidly increasing heating costs, many homeowners are likely to be looking for ways to save. One possible step: facade insulation. A lot of heat is lost here, especially in older buildings.

According to experts, a well-insulated façade saves up to 18 percent energy – and therefore money. The state even helps to create an energy-efficient “building envelope”. For example, the Federal Office of Economics and Export Control (BAFA) grants grants – but only under certain conditions.

The authority promotes various conversions that make a building more energy-efficient, for example modern heating systems in addition to facades. In the past year alone, Bafa approved a total of 10.3 billion euros and paid out around 1.3 billion euros in subsidies. However, the office cannot break down in detail what sums went into the facade insulation. A total of almost 780,000 funding applications were received. Here are the most important questions and answers about Bafa funding.

The Bafa provides funds for the insulation of external walls. This not only includes the insulation itself, but also all work that has to do with it. The money is also used to knock off the old plaster, replace the window sills, extend the roof overhang or replace glass blocks with masonry. Funds flow for material and professional construction.

How big is the promotion?

The regular Bafa subsidy is 15 percent of the total amount. Christian Handwerk, consultant for energy-efficient construction and building physics at the North Rhine-Westphalia Consumer Advice Center, does the math: A small single-family home has around 100 square meters of wall space. At low prices of 180 euros per square meter, facade insulation costs 18,000 euros. Bafa would take over 2700 euros of this.

There can also be a bonus of five percent if the insulation is part of an individual refurbishment roadmap (iSFP) with which various parts of the building are refurbished within 15 years as part of a subsidy program. The Bafa subsidy rate therefore covers a maximum of 20 percent of the costs.

However, the eligible costs are capped – at a maximum of 600,000 euros per building and year and 60,000 euros per residential unit. “So only houses with up to ten residential units can be funded,” explains Jürgen Leppig, Chairman of the Federal Association of Building Energy Consultants Engineers Craftsmen (GIH). “This is to prevent large housing groups from tapping the state Bafa funds.” The minimum that has to be invested for facade insulation is 2000 euros a year.

Is façade insulation really worth it?

“Definitely yes,” says the NRW consumer advocate for crafts. “Insulation is one of the most worthwhile measures when it comes to energy-related refurbishment.” According to this, the costs of the insulation are amortized after around ten years through the heating energy saved – in other words, much faster than replacing the heating system, for example. “So you can really save a lot of money,” emphasizes Handwerk.

What must be considered before applying for a grant?

The Bafa publishes extensive leaflets on this. If you want to apply for a subsidy for facade insulation, you must definitely involve an energy efficiency expert (EEE). The German Energy Agency (Dena) is helping with the search. The expert should support the applicant in the energy planning and construction supervision. There is extra funding for this as well.

GIH Chairman Leppig explains: “The expert is the technically extended arm of the sponsor.” He also recommends the optimal solution in terms of building physics and economy.

Consumer advocates for skilled trades also think it makes sense to speak to an expert: “Insulation should be installed correctly, including the plaster and the attachment, for example. If the client unintentionally does something wrong, the insulation may not work properly, which means that cash money would be wasted.” If insulation does not meet the requirements of the guidelines, no funding will ultimately flow.

How exactly does the application process work?

  • The owner obtains written offers from specialist companies. The cost estimates form the basis for the funding application.
  • The energy efficiency expert creates a technical project description (TPB). For this he receives a TPB-ID from Bafa, which he passes on to the applicant.
  • The owner must now enter all the important information, including the TPB ID, in an online application form and send it electronically to Bafa.
  • If the office approves the application, the owner will receive a grant notification with a specific funding amount. This means that the grants are reserved for a period of 24 months.

What must be considered urgently when applying?

No orders may be placed before the application is submitted because, according to Bafa, this is considered a “premature start of measures and prevents funding”. The awarding of the contract and the facade insulation can only begin after the application has been submitted. But there are also risks here. If the insulation begins after the application has been submitted, but before receipt of the grant notification, “this is done at your own risk, since measures that are not eligible for funding may be implemented,” the office clarifies.

GIH expert Leppig criticizes: “It often takes five months for funding to be approved. The applicants hardly have the courage to start at their own risk beforehand.” The state urgently needs to become faster and more transparent here. On request, Bafa assured that it wanted to further optimize the processes. More staff have also been deployed.

Which standards must be met?

The minimum technical requirements for Bafa funding are higher than those provided for in the Building Energy Act. The decisive factor here is the “U-value”, i.e. the heat transfer coefficient, also known colloquially as the thermal insulation value. The lower the U-value, the less heat is lost through the building envelope. For a Bafa subsidy, for example, the outer walls with facade insulation must achieve a U-value of 0.20 or less.

“Many have in mind to only insulate so much that the funding guidelines are met and the one-off subsidy is secured,” reports energy expert Handwerk. However, it is wise to calculate exactly which insulation thickness will save the most money over the next 20 to 30 years.

How do consumer advocates rate Bafa funding?

“The bureaucratic effort is relatively high,” says NRW consumer advocate Handwerk. “Actually, the applicant should only describe what he intends to do and only enter his personal data and the measure – such as the building address, insulating material thickness, later U-value or total area.” That would be more efficient and would help the specialists Handwerk is convinced that Bafa is enough to set the funding amount.

In itself, however, the subsidy rates are attractive because the facade insulation is so financially worthwhile.

How does the owner get his money?

First of all, the applicant has to pay in advance: he pays the bills of the construction company. It absolutely has to be done without cash. Because the relevant receipts, such as bank statements, must be presentable as proof of payment.

Then the energy efficiency expert is obliged to create a technical project certificate (TPN) that confirms that the insulation meets the technical requirements of the funding guideline. For this, the expert receives a TPN ID from Bafa. He also passes this ID on to the owner.

He now has to create an online proof of use, i.e. send all information and documents for the facade insulation including TPN-ID electronically to Bafa. Paper belief still prevails here: Bafa sends the notice of assessment by post and then pays out the subsidy granted – directly to the account.

What deadlines must be paid attention to?

The proof of use must reach Bafa no later than six months after the end of the approval period. If it is only submitted afterwards, “the applicant loses the right to payment of the investment subsidy,” warns the office.

What is the risk of abuse?

Last year, Bafa started on-site inspections together with Dena. On-site appointments with funding recipients or the evaluation of the test report are possible. GIH Chairman Leppig points out that subsidy fraud is punishable by imprisonment for up to five years or a fine.

What are the alternatives to Bafa funding?

KfW development loans can also be applied for for façade insulation. But beware: only one application may be submitted for the same measure – either to the KfW or to the Bafa. A tax incentive for energy-efficient building renovation is also possible. But the same applies here: either tax reduction or Bafa subsidy.

NRW consumer advocate Handwerk has another important tip: There are not only federal funds from KfW or Bafa, but you can often also apply for financial support at state level or even from the municipalities.

More: KfW new construction funding – These are the new conditions.

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