The energy modernisation of buildings could stimulate economic growth in Germany by increasing employment and accelerating the transition towards more sustainable heating systems, in a sector that is still failing to meet its emission reduction targets.
The German Energy Agency (dena) argues that improving the energy performance of existing buildings could become a significant driver for revitalising the German economy. In a context of economic slowdown, increasing the pace of renovations would provide job stability and strengthen regional value chains, particularly in construction-related and industrial trades. According to dena, the building sector generates around 3.7 million jobs and still has considerable untapped potential.
The agency’s assessment indicates that the rate of energy renovation has been declining for years, and forecasts for 2025 point to only very modest increases in key interventions such as roofs, windows, and façades. The 2026 building report also confirms that the sector remains far from meeting its emission reduction targets. While heat pumps are advancing rapidly in new buildings, their penetration in existing ones remains limited, and reliance on gas continues to dominate.
Although rooftop photovoltaic deployment slowed in 2025, the installation of electricity storage systems experienced strong growth. In parallel, the government is working on reforming the Building Energy Act to accelerate the phase-out of fossil fuels in heating and to reinforce the alignment of the building stock with national climate objectives.
