Originally, the Future Financing Act intended to allow German real estate funds to invest in renewable energy facilities. However, this provision was abruptly removed, causing disappointment in the industry.

In a released statement, Commerz Real expresses that an opportunity has been overlooked to "uphold the ambitious objectives of the federal government in advancing renewable energy expansion." Open real estate funds could theoretically have invested more than 19 billion euros in wind and solar parks, the announcement continues. "Even if the regulation is only postponed, the chance to initiate changes will be missed for now," said Jochen Schenk, Vice President of the German Property Federation ZIA.

The provision was removed because, according to the government coalition, not all tax-related questions had been resolved, writes the analysis firm Scope. They further point out that corresponding regulations are now intended to be included in the Annual Tax Act 2024.

Scope has documented the extent to which providers of open real estate funds intend to invest in the renewable energy segment and what priorities they have in a study presented on Monday.

Providers of open real estate funds are poised to release investments. Pilot projects are already being planned, and some providers are even working on a broad implementation. Scope surveyed asset management companies that manage open real estate funds to determine if investments in renewable energies are planned if the Future Financing Act comes into effect in 2024.

The 25 participating companies collectively manage a real estate portfolio exceeding 450 billion euros. The survey took place from mid-July to the end of September 2023. 68% of participants said they plan to invest in renewable energies, 28% indicated they are "considering it," and only 4% of fund providers currently have no plans for an investment in the renewable energy sector.

Despite the recent postponement of legislative initiatives, Scope believes that interest in the topic has not waned. The pressure to quickly establish implementation frameworks is rather increasing.

When asked about specific areas in the renewable energy segment, 78% of providers considered photovoltaics very attractive or attractive. Onshore wind received approval from 67%, and hydropower from 55%. Biomass (23%) and geothermal (11%) were rated less attractive by the fund houses.

The responses regarding countries demonstrate the attractiveness of the German market for investments in renewable energies. 75% consider the German market very attractive, and 25% consider it attractive. Subsequently, Finland is rated as 50% very attractive and 50% attractive, and France as 25% very attractive and 75% attractive.