Heating costs in care homes: who pays for the heat – residents, care insurance or operator?

The short answer

The heating costs in a care home are ultimately paid by the residents, not by long-term care insurance: ongoing energy costs flow into the care rate and the accommodation charge, a new heating system into the separately charged investment amount. Care insurance pays fixed amounts per care grade, so every price increase ends up in the residents’ own contribution or with the social welfare agency.

A home with 80 places needs around 600,000 kilowatt-hours of heat a year. What a kilowatt-hour of heat basically costs for each energy source is set out in What does a kilowatt-hour of heat really cost; this article is about who pays for it in a care home. That makes heat there both a cost issue and a social issue.

Why does a care home need so much heat?

The most robust figure comes from an expert report prepared by Curacon in 2023 for the Federal Ministry of Health (BMG). According to it, heat consumption in residential care facilities in 2022 averaged 7,496 kilowatt-hours per resident per year, weather-adjusted, or 135 kilowatt-hours per square metre. On top of that come around 2,900 kilowatt-hours of electricity per resident.

Three factors drive demand:

• Round-the-clock operation. A care home does not turn the heating down at night or at weekends. Older people also need higher room temperatures than the average household.
• Hot water with hygiene requirements. In large drinking water systems, hot water is kept permanently at a high temperature because of the risk of legionella, as provided for in the technical rules of the DVGW (German Technical and Scientific Association for Gas and Water). For people with weak immune systems in particular, this is not an area for savings.
• Year-round load. Hot water, kitchen and laundry keep running in summer too. That makes demand steady and easy to plan.

Who pays the ongoing energy costs?

The home charge consists of four parts: care-related costs, accommodation, meals and investment costs. Under § 82(1) SGB XI, the person in need of care must pay for accommodation and meals themselves. According to the BMG report, energy costs are billed through the rates for care and accommodation.

For full residential care, long-term care insurance pays fixed benefit amounts per care grade under § 43 SGB XI. If the care rate rises because of higher energy costs, the uniform residents’ contribution for the facility rises. Anyone who cannot cover it from income and assets receives care assistance from the social welfare agency. The public purse therefore pays indirectly as well.

There is a dedicated safety valve for price jumps. Under § 85(7) SGB XI, a significant change in energy expenditure expressly constitutes an unforeseeable material change. The care rates must then be renegotiated for the current period at the request of either contracting party, and the arbitration board can be called on after just one month.

Worked example: what does heat cost per resident?

Assumptions, disclosed: 80 residents, consumption as per the BMG report, gas condensing boiler with 93 per cent efficiency, gas price according to Destatis (Federal Statistical Office) for non-household customers with an annual consumption of 1,000 to 10,000 gigajoules in the first half of 2026: 8.11 cents per kilowatt-hour excluding VAT. Care services are VAT-exempt under § 4 No. 16 UStG (German VAT Act), so a home generally cannot reclaim the VAT on energy as input tax. I therefore calculate gross, at 9.65 cents.

Item	Value
Heat demand (80 × 7,496 kWh)	599,680 kWh
Gas input at 93 % efficiency	around 644,800 kWh
Gas costs gross (9.65 ct/kWh)	around €62,200 a year
per resident per month	around €65
of which CO₂ price (0.181 kg/kWh, €65/t, gross)	around €9,000 a year, just over €9 per resident per month
Gas price 2 cents higher	plus €12,900 a year, around €13 per resident per month

The emission factor comes from Annex 2 of the EBeV 2030 (German Emissions Reporting Regulation); the CO₂ price corresponds to the clearing price of the first auction in July 2026 at the top of the corridor. It is already included in the gas price and is not added on top. Boiler, maintenance and electricity are not included. Electricity alone, at Destatis prices for the 20 to 500 megawatt-hour consumption band (23.66 cents net), costs another roughly €65,000 gross a year for 232,000 kilowatt-hours.

How sensitively residents feel this is shown by the report itself: after the energy supplementary aid expired in April 2024, the authors expected additional costs of €50 to €100 per resident per month.

Who pays for a new heating system?

This is where it gets fundamental. Under § 82(2) SGB XI, costs for constructing, acquiring, replacing and maintaining buildings and fixed assets may be included neither in the care rate nor in the accommodation charge. A new boiler plant is such an investment.

Where public funding does not cover it, the home may charge it to residents separately – the so-called investment amount. For state-funded homes, this requires the consent of the state authority (§ 82(3)); homes without state funding only have to notify it (§ 82(4)). The report describes two brakes:

1. Financing gap. Refinancing runs over long depreciation periods, while loans are shorter. Put simply, 2 per cent refinanced depreciation a year faces 4 per cent repayment.
2. Operational necessity. In the authors’ experience, efficiency measures are regularly rejected by approving authorities as not operationally necessary.

Homes invest correspondingly cautiously: 40 per cent of the facilities surveyed had made no climate protection investments, 37 per cent had financed them from their own funds, and only 11 per cent through the investment amount. There is also a perverse incentive: anyone who saves energy lowers the recognised cost base in the next care rate negotiation.

What does a heat supply contract change?

With heat contracting, a third party invests in and operates the plant, and the home buys heat. That solves the operator’s investment problem but shifts a question: a heat price contains capital, operation and energy. How this price is to be allocated between the accommodation charge and the investment amount – § 82(2) No. 3 SGB XI expressly also names the “use” of fixed assets – is no formality. Operators clarify this with the care rate parties and the state authority before signing the contract, not afterwards.

Technically, the same applies in a care home as in a large apartment building, only more strictly: a heat pump must reliably reach the hot water temperatures or be planned with reheating, and a CHP unit can make use of the steady load. When that pays off is shown in CHP in 2026, and the trade-off between capital and heat price in Contracting or own investment.

What operators should do now

1. Compare your own heat consumption per resident and per square metre with the BMG averages of 7,496 and 135 kilowatt-hours. Anyone well above them has a lever.
2. Check the gas contract: term, price guarantee, consumption band. The Destatis average is a benchmark, not an offer.
3. In the event of a price jump, actively demand renegotiation under § 85(7) SGB XI instead of waiting for the next care rate period.
4. Before any heating replacement, clarify the refinancing: funding, investment amount, consent of the state authority, and with contracting the allocation of the heat price.
5. Build drinking water hygiene into every technical decision, not only at commissioning.
6. Inform residents and relatives early about the effect on their own contribution. Surprises on the care home bill cost more trust than any price increase.