OREANDA-NEWS. The energy turnaround comes at a price, but Germany will also benefit substantially from its implementation – in the form of more employment, growth and energy cost reductions. This is a major finding of the recent study conducted by Prognos AG on behalf of KfW Bankengruppe. It calculated the overall economic impacts KfW's financing of energy-efficient construction and refurbishment is expected to have by 2050. These KfW programmes are a central element of the federal government's energy policy concept for improving energy efficiency and climate protection in existing buildings. For 2013 and 2014 the federal government has increased the funds made available for the programme to EUR 1.8 billion each year.

Under the survey, three scenarios simulated what impacts the implementation of the federal government's energy policy goals are likely to have on reducing energy consumption in existing buildings. In these scenarios the development of important determinants such as energy prices and construction costs was projected into the future.

The results at a glance:

Up to the year 2050, investments in housing of some EUR 838 billion overall will have to be financed through the KfW programmes in order to achieve the energy reduction goals.

These investments enable energy cost savings of EUR 370 billion. That is around 13 times the energy costs of all private households for heating and hot water in Germany in 2011. However, it also becomes clear that from today's perspective the investments cannot be refinanced exclusively from the energy cost reductions. On the other hand, in addition to energy savings, investments will also add value to the buildings and make them more comfortable for the residents, but that was not the purpose of the survey.

Implementing the financed energy saving investments would secure between 200,000 and 300,000 jobs each year by 2050, particularly in small and medium-sized construction and trade businesses. The investments will also lead to increased production in manufacturing and service industries that supply construction and trade businesses. The overall economic effects triggered by the investments each year will increase Germany's gross domestic product by an average 0.4%.

Growth and employment will also benefit public budgets. On balance, additional revenues (taxes and social security contributions) would increase to EUR 95 billion (4% of 2012 GDP) by 2050. The promotional funds to be used for interest rate reductions and grants would be significantly lower, at less than EUR 70 billion.

"The study shows that the energy turnaround not only produces costs but also carries benefits, even without considering the innovation potential. The example of energy system conversion in existing homes shows that in the economic cycle, expenditure always means revenues as well. Major climate protection investments therefore contribute significantly to growth and employment", said Dr Jorg Zeuner, Chief Economist of KfW Bankengruppe.