Germany revises BEG heating subsidies, lowers caps and adds income bonuses

The Federal Ministry for Economic Affairs and Energy has amended the Building Renovation Act and the Federal Funding Programme for Efficient Buildings (BEG EM). From 21 July 2026 owners can apply for subsidies for replacing fossil‑fuel heating systems with renewable alternatives. The basic grant remains at 30 % of eligible costs, with a maximum of €28 000 per residence, which will be reduced by €750 every six months, reaching about €22 000 by 2030.

Additional bonuses are now income‑scaled: households with taxable income up to €30 000 receive a 40 % supplement, up to €40 000 a 30 % supplement, and up to €50 000 a 10 % supplement. Families with minor children get an extra €10 000 allowance on the income ceiling. The “climate‑speed bonus” for early replacement of functional fossil heaters is cut to 16 % (down from 20 %) and will be phased out by 2028. From the first quarter of 2027 a 15 % value‑creation bonus will be granted for heat pumps manufactured in the EU. Existing approved applications stay valid, and all new applications are processed through the KfW bank. The overall possible funding can reach up to 80 % of eligible costs for low‑income households and up to 70 % for higher‑income households.