Political framework: The Market Incentive Programme (MAP)
The Market Incentive Programme (MAP) was introduced in 1999 after an initial government programme (1995 to 1998) had expired. It is intended to support the generation of solar heat for domestic hot water and heating purposes. For the principal market of residential homes (single/multi family house), the "Bundesamt für Wirtschaft und Ausfuhrkontrolle" (BAFA - federal office of economics and export control) supports private investors and SMEs with grants for investments in solar thermal technology. Larger, commercial ST plants are eligible for reduced interest rate loans from the "KfW Bankengruppe" (KfW - the reconstruction loan corporation).
The large number of applications and the availability of government funding under the MAP has resulted in the scheme resembling a stop-and-go process. In 2003, for instance, the solar thermal market was booming as subsidies were raised temporarily but this was followed by a cutback in 2004. On account of the (good) results in 2005, the budget was reduced and the scheme temporarily blocked. It did not resume until March 2006. Due to the immense popularity of the programme, many applications for financial support had to be rejected towards the end of 2006, again because the funds had been exhausted. This development hasn’t changed in recent years, which lead to a temporary suspension of the programme in 2010.
The Renewable Energy Heating Act (EEWärmeG)
The Renewable Energy Heating Act is in effect since the beginning of 2009 and provides more investment security for the solar thermal sector. Most importantly the law introduces renewable energy buildings obligations. These obligations require new buildings to cover a minimum share of their heat demand from renewable energy. Furthermore, the act provides opportunity for the German federal states to set up additional legislation in order to introduce building obligations for existing building stock.