Heating Costs Ordinance: remote reading becomes mandatory by the end of 2026

What the Heating Costs Ordinance requires

The Heating Costs Ordinance governs how heat and hot water are metered and billed in multi-party buildings. The principle is consumption-based billing: the cost is split so that, as a rule, 70 percent follows consumption and 30 percent is base cost. The reform of 2021 turned reading into remote reading, which is the change that now drives the deadlines.

The scope is precise, and one boundary is worth stating clearly. Covered are heat meters, heat cost allocators and hot-water meters. Cooling meters are not covered by the ordinance. Cooling is addressed in the EU context, but it is not a duty under the German Heating Costs Ordinance, so it stays out of scope for the remote-reading and retrofit duties.

The ordinance implements the EU Energy Efficiency Directive 2018/2002, in particular its Articles 9b, 9c and 10a. The aim behind the technical rules is straightforward: more transparency for users and more energy saving in the building stock. Remote reading and monthly feedback are the instruments meant to get there.

The deadlines: everything remotely readable by the end of 2026

There is a chain of cut-off dates, not a single switch. The most important one is the end of 2026, by which the entire stock must be converted. The earlier dates govern new devices and have already passed.

Since 1 December 2021 newly installed devices must be remotely readable. From 1 December 2022 a second requirement was added: new devices must also be interoperable and connectable to a smart meter gateway. So a device bought today already has to meet both conditions, not just the bare remote-reading function.

• Since 1 December 2021: new devices must be remotely readable.
• Since 1 December 2022: new devices must also be interoperable and connectable to a smart meter gateway.
• By 31 December 2026: non-remote-readable stock must be retrofitted or replaced.
• Exception: only where retrofitting is technically impossible or involves disproportionate effort.

The decisive date is 31 December 2026. By then every non-remote-readable device in the stock must be retrofitted or replaced. An exception exists only where this is technically impossible or where the effort would be disproportionate, and that has to be evidenced rather than merely asserted. For most buildings the realistic path is to plan and book the installation work well before the end of 2026.

The monthly consumption information

Remote reading does not mean once a year. Since 2022 users must be informed about their consumption every month wherever remote-readable devices are installed, and this is exactly where practice still falls short.

The duty to inform users monthly has applied since 1 January 2022, in every case where remote-readable devices exist. It is not optional and not tied to the annual bill: it runs through the year, month by month, and it sits on the party responsible for the metering and billing.

The content is defined. The information shows the previous month consumption in kilowatt hours, set against several reference points: a comparison to the previous month, to the same month of the previous year and to an average user. The point of the comparison is to make a change in heating behaviour visible quickly rather than only at the end of the year.

In practice the duty is widely unmet. According to the VDIV survey the majority of users do not yet receive the monthly information, with regular delivery reported for only around a third of users. That gap matters, because the missing information is one of the breaches that triggers a reduction right, so the risk is already running today.

Reduction rights for breaches

The ordinance has teeth. Where a building owner does not bill by consumption, does not install the remote-readable equipment or does not send the monthly information, users may reduce the bill by a flat percentage. The reduction is a lever in the hands of the user, not a fine imposed by an authority.

• 15 percent reduction for non-consumption-based billing.
• 3 percent reduction for missing remote-readable equipment.
• 3 percent reduction for missing or incomplete monthly information.
• Cumulative reading: the two 3 percent reductions can add up according to the prevailing interpretation, although the wording does not say so explicitly.

The 15 percent reduction is the headline figure and applies where the heating cost is not billed by consumption at all. The two 3 percent reductions attach to the newer duties: one for the absence of remote-readable equipment, one for the absence or incompleteness of the monthly information. The cumulative reading of the two 3 percent reductions is the prevailing interpretation in the commentary, but it should be marked as an interpretation: the wording of the ordinance does not state the cumulation explicitly, so the safest course for a building owner is to assume it can apply and to remove the breaches.

Interoperability, market power and data protection

Behind the technical rules sits a market question. The interoperability duty is meant to open up the provider switch that the Bundeskartellamt criticised for years as too hard, and it ties the new devices into the wider metering infrastructure.

New devices must be readable across manufacturers and connectable to a smart meter gateway. That is the same gateway infrastructure that carries the wider electricity metering world, where the smart meter rollout and grid-control duties such as the control box under Section 14a meet. Tying heat and hot-water metering into that infrastructure is what makes cross-provider reading and a later switch realistic.

The market is concentrated. Three large metering service providers hold most of the market between them, and despite the interoperability duty the lock-in effects in the legacy stock persist. Older devices were often not designed for cross-provider reading, so the switch barrier remains real for the existing fleet even where new purchases meet the open standard.

Data protection is the third strand. Monthly consumption data is personal data, since it allows conclusions about the behaviour of a household. Data security to the state of the art is therefore mandatory, which is a further reason to channel the data through the secured gateway infrastructure rather than through ad hoc routes.

What companies should do now

Whoever knows the stock and schedules the rollout ahead of the capacity bottleneck avoids both reductions and deadline stress. The monthly information is already a duty today, so the process should be checked first.

• Inventory the stock. Record the devices and their calibration and contract terms, so the volume and timing of retrofits and replacements is clear before the end of 2026.
• Secure installation capacity early. Book the metering service provider capacity for the exchange well before the end of 2026, since the lack of installation capacity is the main bottleneck in the market.
• Check the monthly information process. Make sure the monthly consumption information is actually being sent where remote-readable devices exist, because the reduction risk for missing information is already running.
• Buy interoperable, gateway-ready devices. When buying new, insist on interoperable, smart-meter-gateway-ready devices and keep the option of a provider switch open.

Further reading

Frequently asked questions