As of Tuesday, all home and apartment owners can apply for state subsidies for the replacement of old gas and oil heating systems with more climate-friendly heat pumps.
This includes landlords of single-family homes, as well as companies and municipalities.
This marks the third and final funding round of the Heating Act, with all eligible groups now able to apply.Â
Earlier this year, applications had opened to private owners of apartment buildings and owner-occupied single-family homes, as well as condominium owners' associations with central heating.
Grants cover up to 70 percent of replacement costs
The heating grants are designed to cover at least 30 percent of the costs to replace an oil or gas burner with a heat pump system for both residential or commercial buildings.
In some cases up to 70 percent of the instalment costs could be covered, depending on your income, and the speed and implementation of the heating system replacement.Â
For owners who live in their property themselves and have up to €40,000 of taxable annual household income, the basic 30 percent subsidy generally applies.
By 2028, a speed bonus of 20 percent will be added for the early replacement of old gas and oil heating systems as well as night storage heaters and old biomass heating systems.Â
There is also an efficiency bonus of an additional five percent for heat pumps that use water, soil or wastewater as a heat source, and those that use a natural refrigerant.
The heating law is not yet meeting expectations
According to Germany’s new heating law, starting this year 65 percent of newly installed heating systems should be powered by renewable energies. But the regulations initially only apply to new buildings in new development areas. Functioning heating systems can be left alone.
According to the Federal Ministry of Economics (BMWK), around 93,000 applications for heating grants have been approved so far.Â
The BMWK expects an increase in applicants for funding following the opening of grants to the remaining groups.Â
Overall the number of subsidies granted per month has increased since they opened in February, but is far below expectations.
Sales of heat pumps in Germany collapsed at the end of July this year, according to the Federal Association of the German Heating Industry (BDH). In the first half of 2024, 90,000 heat pumps were sold, which was 54 percent less compared to the same period in 2023, which had been a record year for the sale of heat pumps.Â
The BMWK cited pull-forward effects and higher interest rates as possible reasons for the decline in sales this year.
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The BDH is “cautiously optimistic that the second half of the year will be better than the first," a spokesperson told DPA. Nevertheless, the association expects a maximum of 200,000 heat pumps to be sold in Germany by the end of the year.
The German government had set a goal of installing 500,000 heat pumps every year from 2024.
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