escalating affordability concern in heating costs: prices have hiked by as much as 47% since 2021. - Has affordability of heating become a concern? Prices have surged by as much as 47% in certain instances since 2021.
Heating expenses have soared since 2021, with district heating and oil witnessing the most significant jumps. Politicians might argue that inflation has decreased, but this doesn't alleviate the pain of previous price increases experienced by consumers. Ista, a housing service provider, calculated the boost in heating expenses for around 3 million apartments between 2021 and 2023, as well as for 2024 based on statistics from the Federal Government's Statistical Office.
Though there was a slight dip in heating costs in 2023 compared to 2022, the short-term relief doesn't compensate for the earlier increases.
Heating Costs for a 70 sqm Apartment
Consider a 70 square meter apartment for instance. The situation isn't promising. If you opt for gas, you'll have to accept an increase of 36 percent, which equates to 220 euros. District heating proves even costlier, setting you back by 42 percent or 330 euros. Oil is the most expensive option with costs nearly doubling: an increase of 47 percent.
Advance data was provided to "Der Spiegel," with Ista CEO Hagen Lessing warning against overestimating any relaxing of energy markets, as such perspectives could mislead tenants.
Delayed Impact on Tenants
Tenants bear the brunt of these expenses with a considerable time lag. Consumption and rates are billed only once a year. As a result, the 2025 heating cost statement, set for delivery in 2026, is likely to jolt many with its unsettling figures.
No Relief in Sight
There's no easing up in sight for 2024. Poland's decision to halt gas flowing through the Yamal pipeline to Germany has added to the strain. The January CO2 price hike, including its effects, will become part of the 2025 billing. A single-family home with an annual gas consumption of 20,000 kWh emits around 4 tons of CO2 annually. This translates to a 2021 CO2 tax of 120 euros, but by 2025, the figure will have swelled to approximately 263 euros, representing a staggering 124.2% increase.
From 2027, the CO2 price will no longer be fixed, and experts anticipate a significant jump in costs, leading to strong price increases in heating. In addition, a gas network fee hike of up to 56% is projected, potentially adding an extra 445 euros per year for single-family homes in 2025.
Electricity costs have not spared consumers either, with a double-digit increase from 31.89 cents to 45.62 cents per kWh from 2021 to 2024. Total electricity expenses for an average household have increased by about 40%.
Despite predictions of a slight decline in heating costs in 2023, tenants may still feel the impact due to the annual billing cycle, with the 2025 heating cost statement potentially causing shock when delivered in 2026. Furthermore, the increase in CO2 prices from 2021 to 2025, which will reach approximately 263 euros for a single-family home with 20,000 kWh annual gas consumption, will also contribute to higher energy costs in apartments, leading to a significant burden on tenants' budgets. The rise in electricity costs, with an increase from 31.89 cents to 45.62 cents per kWh from 2021 to 2024, also indicates that energy costs will continue to escalate, further adding to the financial stress for apartment dwellers.
