Energy Efficiency Directive

What is the EED and what does it have to do with the Heating Costs Ordinance?

As an important part of the European Union’s energy law, it aims to address climate change by improving the energy efficiency of newly built properties and existing buildings. The logic is quite simple: assuming that at least a third of Germany’s total energy consumption goes towards heating buildings or heating hot water, the energy efficiency increase in this area and the reduction of energy consumption play a decisive role in boosting climate protection.

As all EU member states must transfer the Energy Efficiency Directive into national law, the existing German Heating Costs Ordinance was amended accordingly in 2021. In Germany, the Heating Costs Ordinance regulates the billing of heating costs and hot water in rental and residential property relationships, i.e. for all buildings with at least two users and a common heating system. This is also why the EED entails no new requirements for single-family homes or apartments that have their own heating system such as gas heating.

What is the purpose of the Energy Efficiency Directive?

You can only conserve natural resources and reduce your energy requirements if you’re aware of your consumption habits. As a result, if you as a tenant or property owner receive more transparent information about your current consumption values more frequently, you can also better understand how your individual behaviour affects energy consumption. This puts you in a position to react in a timely manner, control your consumption more efficiently and therefore reduce both costs and emissions. The approach of the new legislation is thus to first raise residents’ awareness of this issue by providing specific information on their individual consumption. In the next step, it then aims to reduce energy consumption in order to improve the energy efficiency of buildings in the long term. Ultimately everyone benefits – both our climate and our wallets.

What changes does the EED bring for you as a resident?

Tenants can expect two important changes:

Remote reading for heat meters and heating cost allocators

First of all, you’ll receive transparent information about your individual consumption on a regular basis in the future. This should make it easier than ever to save energy! Your landlord will need your consumption data in order to provide you with this information. Regular data acquisition requires modern digital measurement technology with radio transmission. The EED is now making this mandatory by requiring heat meters and heating cost allocators to be remotely readable and interoperable. These requirements apply to all newly installed meters. Existing devices must be replaced by the end of 2026. Tenants benefit doubly in this regard: they can check their own consumption throughout the year, and they don’t have to let a service technician into the apartment for meter reading. The devices are interoperable since they output consumption values in open data formats. This means that the data can be easily read out to service providers, resulting in a competitive situation intended to generate cost benefits for tenants.

Monthly disclosure obligation

Your landlord will have different options for providing you with this information once a month in the future. Whether in paper form or electronically via e-mail, app or web portal – the most important thing is that your landlord actively informs you of when and where you can view your consumption data. Keep in mind that incorrect or non-existent data and failure to install remotely readable devices entitle you to reduce the calculated heating costs in your bill by 3 percent. It’s worth taking a close look and doing some research!

Energy Efficiency Directive (EED) FAQs

If remotely readable measuring devices are already installed in your home, you as tenant will be informed of your consumption data on a monthly basis starting in 2022. This is meant to encourage more awareness of the resources involved in your energy consumption – that is, all the energy required to heat your home or generate hot water. Read our energy saving tips for more information!

If your home isn’t already equipped with remote-readable measuring and recording technology, your landlord is obliged to retrofit the corresponding technology by the end of 2026 at the latest.

In order to keep you up to date about your current energy consumption in a transparent manner, your heating bill will contain additional information in the future. For example, your current consumption will be compared to the previous month, or the bill may note the average consumption of other residents. Landlords are also obliged to list energy prices, total energy costs, emissions data, the energy mix used and information on the taxes and charges levied. But watch out! This additional information can generally not be provided until the next settlement period. This means that most tenants may have to wait another year.

Your monthly consumption data consists of the compiled data from the heat and hot water meters as well as heating cost allocators from your building. In the future, this data must be read out and recorded wirelessly, provided that remote reading is already supported. This generally involves the transmission of current consumption values as well as those of the previous year, the reference date and data for the unique assignment of the measuring device, such as a serial number or production number.

The German tenants’ association recently raised concerns that the changes to the law may lead to additional costs. The increased expenditure for consumption analysis leads to higher billing costs for landlords, which they could theoretically pass on to tenants. The cost of newly installed equipment could reportedly also be used to justify increases in rents. To duly consider whether and in what form tenants incur additional costs, the amended Heating Costs Ordinance is to be evaluated after three years. The government will then examine whether costs need to be capped.