Germany revises heating subsidy rules, cutting heat‑pump support from July 2026

The German government has changed the conditions of the Federal Funding for Efficient Buildings (BEG) that apply to heating system upgrades. From 21 July 2026 new, income‑based and degressive grant rates will replace the previous rules. The climate‑speed bonus for replacing oil, coal, gas or night‑storage heaters drops from 20 % to 16 % and will be phased out by August 2028. The overall grant ceiling is capped at 80 % for households earning up to €30 000 (or €40 000 with children) and at 70 % for higher‑income applicants. The maximum eligible investment for the first dwelling unit is reduced to €28 000 from February 2027 and will be lowered by €750 every six months until it reaches €25 000 in August 2028. The efficiency bonus for heat‑pump systems and the emissions‑reduction surcharge for biomass heaters are removed. A new 15 % bonus for heat pumps manufactured in the EU will start in the first quarter of 2027, while the base grant for non‑EU‑made heat pumps falls to 15 %.

Public opinion surveys show a majority opposing the cuts to heat‑pump subsidies. Homeowners are urged to submit applications under the old rules by 20 July 2026 if they already have a valid “confirmation of application” (BzA); otherwise, they must apply under the new regime after the deadline. The changes affect a large number of property owners who plan to modernise heating systems, potentially reducing the financial incentive for many to switch to renewable technologies.

Separate guidance notes that gas‑fired boilers must be replaced after 30 years under the Building Energy Act, with penalties for non‑compliance, and that modern condensing boilers can lower gas consumption by up to 30 %.