North Rhine-Westphalia funds shared heating projects to cut fossil fuel use

Neighborhoods Teaming Up for Shared Heating Can Now Apply for State Funding

Heating costs are set to rise—experts agree on this, regardless of the ongoing conflict in the Middle East. Those who can break free from expensive heating fuels or suppliers will be better off in the long run.

Take, for example, neighborhoods joining forces to harness geothermal energy or utilize waste heat from nearby industrial plants. The state government of North Rhine-Westphalia (NRW) is now offering support for such community heating projects. Since 2024, residents have been able to apply for funding for joint electricity initiatives through the Citizens' Energy Fund, a program launched in collaboration with NRW.Bank. Now, the scheme is being expanded to include shared heating projects.

"Renewable Heat Often Lies Right Beneath Our Feet"

"When local residents come together, a few households can grow into a climate-friendly, affordable heating project for entire neighborhoods," NRW Energy Minister Mona Neubaur (Green Party) stated in a press release on Tuesday. "Renewable heat is often right under our feet or generated next door in local businesses."

To qualify, at least seven households must form a project consortium. They can then apply for up to €300,000 to cover planning and preparatory costs, including feasibility studies, expert assessments, or the development of new citizens' energy projects for heat generation from renewable sources.

Free Initial Consultations Available

According to the NRW Ministry of Economic Affairs, applications can be submitted to NRW.Bank immediately. Free initial consultations for planned citizens' energy projects are available through Energy4climate, the state agency for energy and climate protection.

One key advantage: Even if a project ultimately fails to materialize, the funding does not have to be repaid, the ministry clarified. The Citizens' Energy Fund thus assumes part of the planning risk.

In addition, NRW.Bank offers low-interest loans for such community energy systems. Cooperatives can also apply for state guarantees to facilitate financing through their primary banks.

Most Common in Rural Communities

"Citizens' energy" has become a buzzword in Germany's energy transition, according to the state-owned Energy Agency NRW. There are already several hundred such projects across the region. Often, these community energy initiatives for shared heating emerge in rural areas, frequently using agricultural biogas or establishing district heating networks powered by wood-chip furnaces.

However, sustainable heating projects for small urban communities are also on the rise—though mostly in new developments or large-scale renovations.

Sawmill Sought a Smart Way to Repurpose Waste

One example of decentralized neighborhood heating is the Schmerlecke district in Erwitte, near Soest. Since 2017, residents here have collectively relied on a district heating network. The local sawmill had been searching for a use for its wood shavings and offcuts. In 2015, the "Citizens' Energy Schmerlecke" cooperative was founded, and by 2017, the district heating system—serving 83 households—was up and running. The heating plant is now located on the sawmill's premises, supplying hot water to all connected homes.

Another model is the Neue Bahnstadt Opladen climate protection settlement in Leverkusen, a cooperative housing project built on a former railway site. The residential buildings are linked via two heat transfer stations to the local district heating network operated by Leverkusen's municipal utility company. Thanks to the use of biogas, the system boasts an exceptionally low CO₂ footprint.

Another emerging example is the "Gut! Zusammen Aachen eG" project. Located on a former estate in Aachen-Burtscheid, the initiative plans to create five residential communities with a total of 69 apartments. Construction began earlier this year. The project is supported by North Rhine-Westphalia's state-funded KlimaQuartier NRW program.

According to its description, the mini-development will source nearly all its electricity from photovoltaic systems, while heat will be generated using air-to-water heat pumps.