Sustainability and economic efficiency: the importance of energy sources for real estate

Why energy sources are important for real estate

Alongside location, energy efficiency is one of the most important factors influencing the value of real estate. Especially in times of fluctuating energy prices, the choice of the right energy source comes into focus - not only for climate protection, but also for maintaining the value of real estate. Sustainable energy sources can reduce operating costs and increase the attractiveness of a property in the long term. In this article, you will find out why energy sources play a decisive role and how they influence price trends and the future viability of properties.

Status quo of energy sources in German residential properties

An analysis of the energy market in Germany reveals that fossil fuels continue to dominate the space heating market. Data from the German Association of Energy and Water Industries (BDEW) shows that almost three quarters of heating systems in Germany are still based on gas or oil. A look at the trend from 2019 to 2023 makes it clear that the move away from these energy sources has only progressed at a moderate pace so far.

In addition to 48.3 percent gas and 23.4 percent oil, district heating still accounts for 15.2 percent of the supply to households in Germany. The electric heat pump method is showing a notable increase: its share rose from 2.2% in 2019 to 5.7% in 2023, according to data service provider Statista based on BDEW figures.

New buildings in particular are showing positive trends. The proportion of oil hardly plays a role here. However, gas remains a consistently strong energy source.

The role of energy sources in real estate

However, not only the ecological factor, but also the economic factor should be taken into account by homeowners when choosing an energy source. Significant fluctuations in energy prices have been observed in recent years. In addition, there are government measures that put a price on CO2 emissions, which is also reflected in the cost increases for fossil fuels. When considering a changeover, the question of operating costs must therefore also be taken into account, which should be considered in the long term.

The choice of energy source plays a decisive role when it comes to doing something for climate protection as a household. There are major differences in the CO2 emissions of the various energy sources. The two most common energy sources - oil and gas - are the ones with the highest emissions. Switching to sustainable energy sources can significantly reduce a household's CO₂ emissions - for example, up to 54 times less with solar energy compared to heating oil.

Effects on property values

A sustainable energy source can not only stabilize operating costs, but also secure the value of a property. Property prices fall from energy efficiency class C. In order to maintain the value, owners should opt for climate-friendly energy sources. Germany supports this with funding programs, for example for replacing heating systems, energy-efficient renovations and energy consultations.

Can buying an unrenovated property be worthwhile?

Buying unrenovated properties can be worthwhile, especially if the purchase price is low and there is potential for energy-related improvements. State subsidies and an energy consultation help to realistically estimate refurbishment costs. An individual renovation roadmap (iSFP) analyzes the condition of the property, shows renovation steps and offers a subsidy bonus. With good planning and a realistic cost assessment, an increase in value and cost savings can be achieved.

Energy sources as the key to sustainable real estate use

By reviewing their energy source and making a possible switch, homeowners can not only protect the environment but also reduce their operating costs. Such measures also help to maintain the value of the property, which is particularly important in the event of a future sale. However, such refurbishment always requires financial resources and time, despite state subsidies. For owners who prefer an uncomplicated solution, a prompt sale of the property could be an interesting alternative - especially before stricter government regulations take effect and the prices of properties with low energy efficiency classes continue to fall.

How does the choice of energy source affect the value of your property?

Find out now! Have the market value of your property assessed and discover how sustainable energy sources can influence value retention and appreciation.

Find out more about real estate evaluation with Engel & Völkers here.