Investment subsidies

Investment subsidies are governmental, financial subsidies that serve to support investments – often in a certain sector/area.

Investment subsidies are governmental, financial subsidies that serve to support investments – often in a certain sector/area. In relation to e.g. the energy transition, this term refers to all those subsidies that are used for new construction, equipment/structure development and renovation in order to achieve climate targets.

In principle, it is necessary to increase the renovation rate: Buildings are responsible for around 40 percent of global CO2 emissions in both construction and existing buildings. If we want to reduce CO2 emissions, we also have to look at our buildings.

Buildings account for around 40 percent of global CO2 emissions in both their construction and existing structures. If we want to reduce CO2 emissions, we also have to look at our buildings. (Image: Shutterstock)

Deal with new technologies

If we invest in renovations, it is important to look at new technologies and smart building techniques. Intelligent concepts and technologies support us in doing away with fossil fuels and relying on renewable energy sources. Or they help us to reduce our consumption of resources – with as little loss of comfort as possible. We must be aware that technology can help us to control our energy consumption much better and faster than we can. It supports us in using less energy, storing it and using it when we really need it.

In the course of the energy transition, we will also produce and use energy much more locally: So either we produce our energy ourselves, e.g. with a photovoltaic system, or we buy it from a local producer, e.g. an energy community. By using power storages we can use as much as possible of our self-produced electricity. A solar system can be used to support the production of hot water.

This will fundamentally change our energy production in the coming decades – and we will become an important part of this energy transition. This means that the way we produce electricity will change significantly. And investment grants help fund these changes. By generating our own electricity, we are also more independent in the event of a blackout or from the price volatility in the market.

The investments are often linked to guidelines

The amount of the investment grant is linked to funding guidelines and is often based on a percentage of the costs. These grants often do not have to be repaid. Many grant funding awards are made after a project is completed, so often project costs must be funded on an interim basis. Some grant funding allows for payment on account depending on the progress of the project.

Image: Shutterstock

Anja Herberth
Author: Anja Herberth

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