District heating is produced in central combined heat and power plants, which often use a combination of fossil fuels, biomass and renewable energy. This energy travels through district-heating networks. Around 16 per cent of homes across Germany are currently heated by district heating. Municipal heat planning, which every local authority must carry out, will determine which buildings can use district heating in future. Some local authorities, such as Bonn, have already completed their technical heat planning. However, this has legal consequences only once the planning designates specific areas as suitable for district heating. This is reported by the consumer protection association Wohnen im Eigentum (WiE).
Under the Heat Planning Act, cities with more than 100,000 inhabitants must submit their heat plan by 30 June 2026 and smaller municipalities by 30 June 2028. More and more German cities and municipalities are therefore working on municipal heat plans. According to the German Energy Agency, eight per cent of municipalities across Germany had completed their heat planning by the end of 2025, while a further 45 per cent were preparing their plans. Whether and when a heat network is actually constructed or expanded, however, depends on the heat suppliers’ plans.
If a municipality has not drawn up a heat plan by the deadline, the requirements of the German Building Energy Act (Sections 71 et seq. GEG) apply. Owners may then install only new heating systems that obtain 65 per cent of the heat they generate from renewable energy.
Property-specific area designation follows technical heat planning
If a local authority prepares its heat plan before the statutory deadline, this does not automatically have specific legal consequences for owners. Initially, the technical heat plan merely shows how a city or municipality can be supplied with climate-neutral heat in future and which areas are generally suitable for district heating, local heat networks or decentralised solutions. It therefore provides the strategic basis for technical and financial feasibility studies and the municipal utility’s resulting expansion plan.
“The decisive question is instead whether the local authority has also designated specific, property-based areas as district-heating areas,” says von Möller. Such a designation takes the form of a municipal statute, statutory instrument or general administrative order. Only then do the Building Energy Act’s requirements for the proportion of renewable energy apply, beginning just one month later, even if the statutory deadline has not yet passed.
Bonn, for example, has already published information about its municipal heat plan, but has not yet designated any areas. This creates no obligation to act. Some cities, such as Augsburg, already identify in their heat-network expansion maps which specific properties can be connected to district heating. The aforementioned GEG requirements already apply there.
Local authority must adopt a connection and use obligation separately
Some local authorities have imposed an obligation to connect to and use district heating. This is generally done under state or municipal law, for example through a municipal statute. Owners are then generally required to purchase district heating. However, an option to apply for exemption from the obligation is often provided. Someone who already has a building-specific heating system based on renewable energy may therefore be able to apply to the local authority for exemption from compulsory connection.
“If compulsory connection applies to you and you already have a heating system that meets the GEG requirements, you should consult the relevant statute and check what you need to do to obtain an exemption,” advises Dr Sandra von Möller.
Advantages and disadvantages of district heating
District heating can be financially worthwhile and climate-friendly, but it also has pitfalls. The consumer advice centre summarises its advantages and disadvantages.
Advantages at a glance
- Saves space & requires little effort: As neither a boiler of your own nor storage space for fuel is required, high initial costs are avoided. You also do not need to arrange system maintenance, chimney sweeping or fuel purchases.
- Environmental benefits: District heating contributes to climate action because it is often based on combined heat and power generation and industrial waste heat. As the share of renewable energy is also rising steadily, it is worth examining your provider’s specific energy mix.
- Financial appeal: Depending on the provider, prices can be low, making district heating a cost-efficient heating method.
- Financial support: Many local authorities and municipal utilities support connection to the network with grants, which are generally between 500 and 3,000 euros depending on building size and heat demand.
- Long service life: Compared directly with conventional heating systems, district-heating transfer stations have a significantly longer service life.
Disadvantages at a glance
- Lack of competition: As district-heating networks form local monopolies, customers cannot choose their provider. Switching, as with electricity or gas, is impossible, which can be especially problematic when prices are high. The Federation of German Consumer Organisations (vzbv) is already campaigning for reforms in this area.
- Long-term commitment: Connecting to district heating is a decision with far-reaching consequences over many years and therefore requires careful consideration.