Germany reorganizes heating subsidies and heat pump funding

Germany has reorganized its federal funding for efficient buildings as of July 21. While the basic subsidy remains at 30 percent of eligible costs, several maximum limits and bonuses are undergoing changes.

For single-family homes, the maximum eligible costs are decreasing from 30,000 euros to 28,000 euros, with further reductions scheduled for February 2027. The climate speed bonus, currently at 16 percent, will decrease by 4 percentage points every six months starting in February 2027, eventually expiring in August 2028. Additionally, the efficiency bonus for heat pumps exceeding 5 percent has been eliminated.

The income-based bonus has been restructured based on taxable household annual income. Households with income up to 30,000 euros can receive a 40 percent bonus, while those between 30,001 and 40,000 euros receive 130 percent.

Regarding technical implementation, heat pumps are increasingly efficient even in older buildings or those with traditional radiators, provided the radiators are appropriately dimensioned or replaced with modern compact models to accommodate lower flow temperatures.