Reader question: How do I install a heat pump in my German property?

What are heat pumps - and why am I hearing so much about them?

Heat pumps are an electricity powered, energy-efficient way to produce warm water and heat inside the home. They work by transferring heat from the air, water or ground outside, compressing it to make it warmer and moving it around the building in a network of pipes. In summer, many heat pumps can also work in the opposite direction, extracting hot air from inside the building and circulating cool air from outside. 

Though the German government has been promoting this climate-friendly heating solution for a while, the demand for heat pumps has shot up in the wake of the current energy crisis. 

Last year, the number of heat pumps being installed in Germany increased by 28 percent to 154,000. The government hopes to be installing 500,000 of the devices per year by 2024.

Russia's war on Ukraine has not only prompted a huge hike in gas prices, but also raised questions about the security of Europe's energy supply. In this context, heat pumps have become attractive not just as an eco-friendly choice but also a potential money-saver that contributes to reducing Germany's dependence on Russian gas.

What types of heat pump there?

There are three main options people should know about when deciding what type of heat pump to get. Though all of them function largely in the same way - by moving thermal energy around - they vary based on their sources of heat.

The first, and cheapest option, is a heat pump that extract heat from the air. The second, more efficient and slightly pricier option, is a pump that uses heat from below the ground. The third, most efficient and most expensive option, is a heat pump that gets its thermal energy from water - though these can be hard to get approval for.

You can find out the efficiency of a heat pump through the Annual Work Figure (JAZ), which describes how many kilowatts of heat energy can be created from one kilowatt of electricity. According to experts, a JAZ of 3.3 or more - meaning just a third of the electricity goes into generating heat - would make a heat pump worthwhile. Most modern heat pumps tend achieve a rating of four at least. 

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How much does it cost to install one?

That partly depends on what your existing heating system is like and whether wider renovation works need to be carried on your building to make the heat pump worthwhile. However, energy consultancy Renewa provide the following ballpark figures for the pump and installation:

• Air heat pump: €15,000
• Ground heat pump: €25,000
• Water heat pump: €30,000 

The Verbraucherzentrale consumer advocacy group has slightly different estimates. They believe an air-source heat pump costs around €20,000-25,000, a ground-source heat pump costs €15,000-€20,000 for the device and around €50-100 per metre of drilling and a water-source heat pump costs anywhere between €25,000 and €40,000 for the device and installation. 

As a rule, installing a heat pump in a new-build property is likely to be a fair bit simpler than installing one in an older property. That's because newer properties tend to have high energy efficiency standards, while older ones may require better insulation and other preparation work to make the heat pump worthwhile. 

Another factor that can impact costs are the ground conditions in your region. The difficulty of drilling through rocky soil in places like southern Germany can cause labour costs to spiral. 

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Can I get any state subsidies?

The Economics Ministry has recently reduced the level of the subsidies for people installing new heat pumps, citing the debt break and limited resources. However, there's still a fair amount of financial aid up for grabs.

While previously people could get up to 50 percent of their new heat pump system paid for by the state, this has now been reduced to 40 percent, up to a maximum of €24,000. This consists of the basic subsidy of 25 percent, plus an additional 10 percent if you replace an oil heating system or a gas heating system that is more than 20-years-old. 

There's also another five percent bonus available for people who opt for a ground-source heat pump or a water-source heat pump.

In addition, you can get up to 80 percent of the costs of an energy consultant paid for by the government. This is capped at €1,300 for a detached or semi-detached house and at €1,700 for buildings with at least three apartments in them.

How do I get started?

One of the best ways to get started - and find out if a heat pump is right for you - is to book a consultation with an energy consultant. Though you don't always have to have one, they can be invaluable in helping you navigate all the technical complexities of replacing your heating system and planning out the project. 

It's also good to get a heads-up about whether there are more urgent energy efficiency measures you should be taking, like replacing drafty old windows. In some cases, these will need to be fixed before you can think about changing your heating system. 

As mentioned, the subsidies for energy consultants are still incredibly generous, so it's usually worth getting the additional support.

If you own a flat in a larger building, you'll likely have to propose installing a heat pump at the next home owners' meeting. The benefit of this is that, if other owners in the building agree, you can probably split the cost of the heat pump between you. The less good news is it will likely need to be put to a vote, and the "too many cooks" scenario could end up leading to a kind of stalemate in which nobody wants to take responsibility for anything.

In a single-occupancy house, things are much easier - though the downside is that you'll have to bear the costs yourself.

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How do I get hold of those subsidies?

State subsidies should be applied for online on the Federal Office of Economic Affairs (BAFA) website. You can do multiple applications at once, but it may work out best to do the consultant first because they can put together a document that could nab you a five percent 'bonus' subsidy for the work.

This is known as the individual renovation roadmap (iSFP) and sets out a number of energy saving proposals for your home. The expert should also confirm that these are being implemented in order for you to get the bonus.

In addition, you'll need to attach a cost estimate for the work to the funding application. This should be a realistic estimate as it cannot be subsequently revised upwards if the work turns out to be more expensive.

Crucially, it's best to hold off on starting the process - including signing any contracts - until your funding application is approved or at least submitted. That's because BAFA doesn't fund projects after construction has already started, which occurs the second you agree on a deal with a heat plump supplier or installation company.

Once you receive confirmation of the subsidies from BAFA, the work of installing your new heat pump can begin.