Heat Pump Subsidies 2026: Making the Most of Government Grants in Germany
Anyone installing a heat pump in Germany in 2026 can receive grants covering up to 70% of eligible costs – for a single-family home that means up to €21,000. The Federal Subsidy for Efficient Buildings (BEG – Bundesförderung für effiziente Gebäude) combines a base funding rate with several bonuses tailored to the applicant's individual situation.
This article explains all the funding components, shows with concrete calculation examples what is actually paid out, and guides you step by step through the application process at KfW.
Funding Structure Overview: BEG, KfW and BAFA
Heating subsidies in Germany have been running through the Federal Subsidy for Efficient Buildings (BEG) since 2024. Within the BEG, two institutions are responsible:
- KfW (Kreditanstalt für Wiederaufbau – Reconstruction Credit Institute): Responsible for subsidising new heating systems, including heat pumps – via Programme KfW 458 (grant) and KfW 358/359 (supplementary loan).
- BAFA (Federal Office for Economic Affairs and Export Control): Responsible for individual measures such as insulation, heating optimisation, hydraulic balancing and district heating connections.
For heat pump installation, the KfW is therefore the right point of contact. BAFA comes into play when additional insulation or heating system optimisation is carried out.
Important: The BEG funding guideline is valid until at least 2029. In June 2026, the federal government plans a revision of the Heating Act (GEG – Gebäudeenergiegesetz), but funding rules after that will only be renegotiated from 2029 onwards.
The Four Funding Components in Detail
The KfW funding for heat pumps (Programme 458) consists of a base grant and three possible bonuses. The bonuses are partially combinable, but the total subsidy rate is capped at 70%.
1. Base Funding: 30%
The base funding amounts to 30% of eligible costs and is open to all types of owners – owner-occupiers, landlords and homeowner associations (WEGs). It is income-independent.
Requirement: The heat pump must achieve a minimum seasonal coefficient of performance (SCOP/JAZ) of 3.0.
2. Climate Speed Bonus: +20%
The climate speed bonus rewards a swift switch away from fossil heating systems. It amounts to 20% for applications submitted by the end of 2028.
Requirements:
- Only for owner-occupiers
- A functioning fossil heating system must be replaced (oil, gas, coal, night storage heaters)
- For gas and biomass systems, the heating must be older than 20 years
Degression: The bonus is scheduled to decrease by 3 percentage points every two years:
| Period | Climate Speed Bonus |
|---|---|
| Until 31.12.2028 | 20% |
| 2029–2030 | 17% |
| 2031–2032 | 14% |
| 2033–2034 | 11% |
| 2035–2036 | 8% |
| From 2037 | discontinued |
Those who submit their application by the end of 2028 will secure the full 20% bonus.
3. Income Bonus: +30%
The income bonus is aimed at low-income households and amounts to 30%.
Requirements:
- Only for owner-occupiers
- The taxable household income must not exceed €40,000 per year
- Proof via income tax assessment (no more than 2 years old)
4. Efficiency Bonus: +5%
The efficiency bonus promotes particularly environmentally friendly or efficient heat pump technologies and amounts to 5%.
Eligible heat pumps are those that:
- use a natural refrigerant (e.g. propane R-290 or CO₂ R-744), or
- use water, ground or wastewater as a heat source (brine-to-water, water-to-water)
Air-to-water heat pumps with synthetic refrigerant only receive the efficiency bonus if a natural refrigerant is used. The efficiency bonus is also available to landlords.
Maximum Funding Amounts
Eligible Costs
The eligible investment costs are capped per residential unit:
| Building Type | 1st Residential Unit | 2nd–6th Unit | Each Additional |
|---|---|---|---|
| Single-family home | €30,000 | – | – |
| Multi-family home | €30,000 | €15,000 each | €8,000 each |
Maximum Amounts at 70% Funding
| Building | Eligible Costs | Maximum Grant (70%) |
|---|---|---|
| Single-family home | €30,000 | €21,000 |
| Two-family home | €45,000 | €31,500 |
| 6-unit apartment building | €105,000 | €73,500 |
Note the cap: The total subsidy rate cannot exceed 70%. If you add base funding (30%), climate bonus (20%) and income bonus (30%), the arithmetic total would be 80% – however, a maximum of 70% is paid out.
Calculation Examples
Example 1: Family with Medium Income
A family (income €55,000) replaces their 22-year-old gas boiler with an air-to-water heat pump. Investment costs: €30,000.
| Funding Component | Rate | Amount |
|---|---|---|
| Base funding | 30% | €9,000 |
| Climate speed bonus | 20% | €6,000 |
| Income bonus | – | €0 |
| Efficiency bonus | – | €0 |
| Total funding | 50% | €15,000 |
Own contribution: €15,000
Example 2: Low-Income Household
A retired couple (income €32,000) replaces a 25-year-old oil boiler with a brine-to-water heat pump. Investment costs: €45,000, of which eligible: €30,000.
| Funding Component | Rate | Amount |
|---|---|---|
| Base funding | 30% | €9,000 |
| Climate speed bonus | 20% | €6,000 |
| Income bonus | 30% | €9,000 |
| Efficiency bonus (geothermal) | 5% | €1,500 |
| Arithmetic total | 85% | €25,500 |
| Capped at 70% | 70% | €21,000 |
Own contribution: €24,000 (of which €15,000 above the funding cap)
Example 3: Landlord
A landlord replaces the heating system in a 4-unit apartment building. Investment costs: €60,000, eligible: €75,000 (30,000 + 3 × 15,000).
| Funding Component | Rate | Amount |
|---|---|---|
| Base funding | 30% | €18,000 |
| Efficiency bonus (natural refrigerant) | 5% | €3,000 |
| Total funding | 35% | €21,000 |
Landlords are not entitled to the climate or income bonus. The subsidy rate is therefore a maximum of 35%.
KfW Supplementary Loan: KfW 358 and 359
In addition to the grant, the KfW offers low-interest supplementary loans:
| Programme | Target Group | Interest Rate (eff.) | Max. Loan |
|---|---|---|---|
| KfW 358 | Owner-occupiers, income ≤ €90,000 | 0.01–1.87% | €120,000/unit |
| KfW 359 | Landlords and higher income | 3.69–3.78% | €120,000/unit |
Advantages of the supplementary loan:
- Term up to 35 years
- Fixed interest period up to 10 years
- Early repayment without prepayment penalty in the first 10 years
- Combinable with the KfW 458 grant
The KfW 358 loan is particularly attractive for low-income households: with an interest rate below 2% and up to €120,000 in loan volume, the entire investment including accompanying measures can be financed.
Tax Alternative: §35c EStG (Income Tax Act)
Those who do not apply for a KfW grant can alternatively deduct the costs for tax purposes – under §35c of the German Income Tax Act (Einkommensteuergesetz):
| Feature | Details |
|---|---|
| Deduction | 20% of costs, spread over 3 years (7% – 7% – 6%) |
| Max. eligible costs | €200,000 per residential building |
| Max. tax reduction | €40,000 |
| Validity | Until 2029 |
| Combinable with KfW? | No – either grant or tax bonus |
The tax option is particularly worthwhile for owners with high incomes who would not receive the income bonus and whose investment costs significantly exceed the KfW €30,000 limit.
Which Heat Pumps Are Subsidised?
The KfW generally subsidises all common heat pump types:
| Type | Base Funding | Efficiency Bonus Possible? |
|---|---|---|
| Air-to-water | 30% | Only with natural refrigerant |
| Air-to-air | 30% | Only with natural refrigerant |
| Brine-to-water (geothermal) | 30% | Yes (ground as source) |
| Water-to-water (groundwater) | 30% | Yes (water as source) |
Not eligible are gas-powered heat pumps and devices with a SCOP/JAZ below 3.0.
New Noise Requirements from 2026
Since 1 January 2026, stricter noise limits apply to subsidised heat pumps. Funded devices must be 10 decibels quieter than the limits set by the TA Lärm (Technical Instructions on Noise). For heat pumps with 6–12 kW output, this means a maximum of 60 dB (previously 65 dB). Most current brand-name devices meet this requirement, but data sheets should be checked for older models or low-cost imported devices.
Application Process Step by Step
The process at KfW follows a fixed sequence. The most common mistake: commissioning the installer before submitting the application – this leads to complete loss of the grant.
1. Engage an Energy Consultant
An energy efficiency expert (EEE – Energieeffizienz-Experte) from the Energy Efficiency Expert List is mandatory. The consultant prepares the technical project report (TPN – Technischer Projektnachweis) required for the application. Costs: €300–800.
2. Obtain a Quote – But Do Not Commission Yet
Get a detailed quote from the specialist contractor. Do not sign any contract yet. The quoted amount is stated in the KfW application.
3. Submit the KfW Application Online
Register on the Meine KfW portal and submit the application for Programme 458. Required documents:
- Technical project report (TPN) from the energy consultant
- Contractor's quote
- Income tax assessment (only for income bonus)
- Property documentation
4. Wait for the Approval Notice
The KfW reviews the application and issues an approval notice. Only after this may the contract be awarded to the installer.
5. Have the Installation Carried Out
After receiving the approval notice, commission the specialist contractor. Hydraulic balancing is mandatory and must be performed as part of the installation.
6. Submit Proof of Use
After completion of the work, the energy consultant submits the proof of use to the KfW. The invoices must clearly itemise the eligible costs.
7. Disbursement
The KfW transfers the grant to the specified account. Processing time is typically 4–8 weeks after submission of the proof of use.
Plan for pre-financing: The grant is only paid out after completion and review. The full costs must be advanced initially. The KfW supplementary loan (358/359) can serve as bridge financing here.
Avoiding Common Mistakes
| Mistake | Consequence | Solution |
|---|---|---|
| Contract signed before application | Grant is forfeited entirely | Wait for approval notice first |
| No energy consultant involved | Application is rejected | Involve an EEE from the start |
| Hydraulic balancing forgotten | Disbursement is refused | Include in the quote |
| Income proof too old | Income bonus is lost | Tax assessment max. 2 years old |
| Noise requirement not checked | Device not eligible | Compare data sheet with TA Lärm values |
Regional Additional Subsidies
In addition to federal funding, many German states and municipalities offer their own subsidy programmes. These can sometimes be combined with KfW funding:
- Baden-Württemberg: State programme "Wohnen mit Zukunft: Erneuerbare Energien" – grants up to €3,000 for heat pumps
- Bavaria: Bavarian Modernisation Programme (BayModR) – low-interest loans
- North Rhine-Westphalia: progres.nrw – bonus for geothermal heat pumps up to €3,750
- Municipal programmes: Many cities and municipalities provide additional grants of €500 to €2,000
Tip: An overview of all regional subsidy programmes is available at the BMWK Subsidy Database. Check before applying which programmes are available in your region and can be combined with KfW funding.
Summary: Funding at a Glance
| Component | Rate | Requirement |
|---|---|---|
| Base funding | 30% | SCOP/JAZ ≥ 3.0, all owners |
| Climate speed bonus | 20% | Owner-occupiers, replacement of fossil heating |
| Income bonus | 30% | Owner-occupiers, income < €40,000 |
| Efficiency bonus | 5% | Natural refrigerant or geothermal/water source |
| Max. subsidy rate | 70% | |
| Max. grant (single-family) | €21,000 | At €30,000 eligible costs |
Conclusion: The heat pump subsidies for 2026 cover up to 70% of investment costs – a level that is expected to decline in coming years. Those planning a heating replacement should submit their application before the end of 2028 to secure the full 20% climate speed bonus. With an energy consultant, timely application and complete documentation, the process can be managed reliably.
Article Series
| No. | Article | Topic |
|---|---|---|
| 1 | Heat Pumps: The Complete Guide | Overview and introduction |
| 2 | How Does a Heat Pump Work? | Physical fundamentals |
| 3 | The Components | Heat exchangers, compressor, expansion valve |
| 4 | Key Figures and Sizing | COP, SPF, design |
| 5 | Operating Modes | Monovalent, bivalent, hybrid |
| 6 | Heat Pump Types and Solar Integration | Types & combination with PV |
| 7 | SCOP Explained | Seasonal coefficient of performance |
| 8 | Optimisation & Settings | Practical operating guide |
| 9 | Calculating Output | Sizing |
| 10 | Heat Pump Costs 2026 | Purchase, installation, operation |
| 11 | Heat Pumps in Older Buildings | Efficient use in existing stock |
| 12 | Electricity Consumption per Year | Consumption by building type |
| 13 | Saving Heating Costs with a Heat Pump | Cost comparison gas/oil/HP |
| 14 | Solar and Heat Pump: The Dream Team | PV + HP combination |
| 15 | Heat Pump Subsidies 2026 | You are here |
Sources
- KfW: Heating Subsidies for Private Individuals – Residential Buildings (Programme 458)
- BAFA: Federal Subsidy for Efficient Buildings – Overview
- Finanztip: Heat Pump Subsidies 2026
- BMWK: Subsidy Database
- BWP: BEG Funding – New Noise Requirements
- Vattenfall: Heat Pump Subsidies 2026
Size Your Heat Pump Now
Use our free heat pump calculator to determine the required output and seasonal coefficient of performance for your individual situation according to VDI 4650.