AUDIO: Federal Heat Pump Association: financing remains attractive (4 min)
Less funding
Accessed: July 8, 2026, 8:01 p.m.
The federal government wants to phase out funding for heat pumps. Anyone still interested in receiving ongoing heating system replacement funding only has until July 8 to apply. This is followed by a technical change; From July 21, new conditions with lower subsidies will apply. The Federal Heat Pump Association still sees no reason to panic, but advises interested parties to act quickly.
Message personalization
If you still want to take advantage of the current heating subsidy conditions, you’ll need to hurry: regular applications can only be submitted this Wednesday. According to the Federal Ministry of Economics, a technical adjustment phase will take place between July 9 and 20 at the KfW development bank and the Bafa federal office. New, lower financing conditions will apply from July 21.
According to the Federal Ministry of Economics, trust protection provisions must apply during the technical transition. Therefore, anyone who already has a valid application confirmation or project technical description can continue to apply under current conditions.
However, the Federal Heat Pump Association emphasizes that confirmation of an application alone does not constitute a valid application for financing. He therefore recommends, if possible, that the application be submitted in full via the KfW portal by Wednesday. The association had already said on Tuesday that suspending the ability to apply would send the wrong signal to consumers, specialty retailers and market participants.
Association: “There is no reason to panic”
However, the Federal Heat Pump Association generally sees no reason to panic about the planned cuts in heat pump funding. Managing Director Martin Sabel told MDR AKTUELL that the financing is ongoing. The collapse occurs to a moderate extent. “There’s no reason to wait, but there’s no reason to panic now,” Sabel said.
Anyone considering installing a heat pump shouldn’t hesitate too long, Sabel says. At the first stage, the cuts were not too large, but over time the funding will become less and less. That’s why anyone considering a heat pump is “advised not to wait too long.” At the same time, from Sabel’s point of view, income support will become somewhat more social. However, this does not make the system simpler.
Video:
Fewer subsidies for heat pumps and other green heating systems (2 min)
Sabel is particularly critical of the fact that regulatory changes are being planned at the same time. This leads to some loss of orientation. Therefore, the association advocated leaving the size and funding system unchanged. Cuts are not welcome, Sabel said. Given the limited financial resources, one has to admit that “it was probably inevitable.”
Funding should be gradually reduced
The federal government’s plan calls for phasing out government funding for heat pumps and other environmentally friendly heating systems over the coming years. This is stated in the Bundestag budget committee template, which was first reported by the German Press Agency. The reason for this is the tight budget situation: this measure is expected to save about 2.1 billion euros by 2030.
Homeowners can currently receive up to 70 percent financing when switching to green heating. The maximum possible grant for investment costs is currently €21,000.
For most households, this amount should be reduced gradually – according to plans, every six months. For people with an annual income of more than €30,000, the maximum funding amount will initially be reduced to €19,600 this year, before falling to €13,200 by 2030.
Larger cuts are planned for higher incomes. For incomes of 40,000 euros and more, the maximum financing is already 16,500 euros and is also expected to gradually decrease. According to the plans, for households with an annual income of more than 50,000 euros, the subsidy could be reduced to 6,600 euros by 2030.
On the other hand, households with very low incomes should be better off. Anyone earning less than €30,000 a year can receive up to €22,400 in future funding. A children’s bonus is also planned: for families with children, the income limit will increase by 10,000 euros each. This means they can benefit from higher subsidies for longer.
Heating law reform
At the same time, the black-red federal government plans to reform the current heating law. The black and red coalition wants to scrap key parts of the previous traffic light government’s rules in a new building modernization law.
The core of the existing Building Energy Act should be repealed, namely the 65 percent rule: it stipulates that every newly installed heating system must be powered by 65 percent renewable energy. In the future, new gas and oil heating systems will also be possible if they gradually use an increasing proportion of CO2-neutral fuels such as biomethane.
Video:
The heating law has been repealed: what do experts say? (2 minutes)
Criticism from the Greens
There is clear criticism from the Greens. Energy politician Alaa Alhamwi said: “The federal government has promised people reliable heating subsidies until 2029.” Anyone watering down that promise now would create massive uncertainty. The government is also risking jobs as the funding bolsters the craft and heat pump industries.
Video:
New heating law: many are looking for cheap solutions (3 min)
The heating industry requires, above all, safety planning. The Federal Association of the German Heating Industry explained that adjustments must be made with a “sense of proportion.” It is vital that essential housing investment does not slow down.
AFP/DPA(jst)