Smart tech­no­lo­gy in­s­tead of full re­fur­bish­ment: how to achie­ve a hea­ting tur­naround in exis­ting buil­dings

Mr. Müller, what really makes a property “green”?

Sascha Müller: “Green” is often equated with good insulation and energy efficiency. However, a property only becomes truly climate-neutral when it no longer contributes to the carbon footprint. We have a huge task ahead of us: around 100 million tons of CO₂ must be saved in the building sector alone by 2045 - according to the Federal Environment Agency's forecast. The main key to this lies in the boiler room, as 80% of emissions are caused by the heat supply - predominantly from fossil sources such as oil and gas.

The greatest lever for decarbonization therefore lies in replacing these fossil heating systems with technologies based on renewable energies. Scientific studies, for example by Fraunhofer ISE, show that Switching to heat pumps significantly reduces primary energy demand and makes buildings fit for net-zero targets. In comparison, large-scale insulation measures are often more expensive, take longer to take effect and do not address the actual cause of emissions.

Many existing buildings in Germany are at risk of becoming stranded assets. What is going wrong?

Sascha Müller: The biggest problem in the building sector is that we are trying to decarbonize it with yesterday's recipes. Full refurbishments are not only expensive, they also drive rents in a direction that is hardly justifiable from a socio-political perspective. Insulation quickly costs up to 1,200 euros per square meter - with existing purchase prices of 1,000 to 1,400 euros per square meter, this is simply not feasible without massively increasing rents. Buildings should be refurbished as needed when components are due for renewal, not earlier.

And PAUL Tech is taking a different approach?

Sascha Müller: Yes, we rely on intelligent technology instead of complete refurbishment. We can heat apartment buildings in a CO₂-neutral way - without any intervention in the building envelope. This not only saves enormous investments, but also preserves the affordability of living. Our heating solutions are based on a combination of AI-controlled heating control, heat pumps and - where appropriate - photovoltaics. The big advantage: operating costs remain stable and energy efficiency increases. And best of all: tenants and owners are protected from the burden of rising CO2 costs.

How do you refinance the whole thing?

Sascha Müller: It's very simple: we replace the heating costs that tenants have been paying for gas or district heating, for example. We use this cash flow to refinance our technology investment - without any capex for our customers. This is done as part of a long-term contracting agreement. We take responsibility for the technology, supply green heat and reduce CO₂ – immediately measurable and economically viable.

How does the energy efficiency of a building relate to ESG?

Sascha Müller: The energy efficiency rating of a property is now a key ESG indicator - with a direct impact on marketability and valuation. Properties with a poor rating are at risk of becoming stranded assets: They are almost impossible to sell, and if they do, then only at a massive discount. In an environment of rising interest rates and tight budgets, this is a real danger for many owners.

This is exactly where our solution comes in: Up to 40 % savings on heating costs and an improvement of two to three energy efficiency classes - without any equity on the part of our customers. With our contracting models, we refinance the technology through the operating cost savings. This turns a CO₂ guzzler back into a marketable asset - and contributes to climate protection at the same time.

Keyword district heating. How do you assess this heat generator and, in this context, the current discussion about a price cap for district heating?

Sascha Müller: District heating plays a central role in municipal heating planning, but switching to renewable sources and expanding the grid are expensive and difficult to implement in many places - according to Prognos, this will involve investments of 43.5 billion euros by 2030. More decentralized solutions such as heat pumps are often cheaper, more efficient and enable an independent supply, while district heating only remains a good alternative where it is based on climate-neutral energies.

The price development of district heating is completely non-transparent - and often simply too expensive. Many households currently pay more than 20 cents per kilowatt hour - that's twice as much as for heat pumps. A price cap makes sense to cushion social hardship in the short term. In the long term, however, we need alternatives - and that means decentralized, controllable systems based on renewable energies.

It is often said that the heat pump had a difficult year in 2024. What do you expect for 2025?

Sascha Müller: That's right - 2024 was characterized by political uncertainty and caution among many customers. But we see a real boost in 2025. Demand for heat pumps will pick up again significantly. And rightly so: the technology is here, it's affordable and it saves CO₂ immediately. We are currently implementing around 30 projects, and we want to bring 20,000 residential units to Net Zero by the end of 2025. And that's just the beginning.