Germany reformed its flagship heating subsidy on 21 July 2026 — and started a countdown clock. The 30% base grant for heat pumps, solar thermal and biomass survives, but the headline bonus for swapping a working fossil boiler has been cut from 20% to 16%, and will now shrink every six months until it reaches zero in August 2028.
What happened?
As part of the 2026 federal budget consolidation of the Klima- und Transformationsfonds, the BEG heating grant (KfW programme 458) was restructured with effect from 21 July 2026. Applications filed in a short transition window (9–20 July) were still processed under the old rules; everything since runs on the new ones.
The base grant (Grundförderung) remains 30% of eligible costs for heat pumps, solar thermal, biomass, fuel cells and district-heat connections. But the extras have been trimmed: the +5% heat pump efficiency bonus is gone, the €2,500 biomass surcharge is gone, and the Klimageschwindigkeitsbonus — the reward for replacing a functioning oil, gas, coal or night-storage heater — has been cut and put on a degression schedule:
| Application filed | Climate-speed bonus | | --- | --- | | 21 Jul 2026 – 31 Jan 2027 | 16% | | 1 Feb 2027 – 31 Jul 2027 | 12% | | 1 Aug 2027 – 31 Jan 2028 | 8% | | 1 Feb 2028 – 31 Jul 2028 | 4% | | From 1 Aug 2028 | 0% |
The ceiling on eligible costs also falls: from €30,000 to €28,000 for the first dwelling unit, and by a further €750 every six months until it reaches €22,000 by 2030.
Who is affected?
Owners replacing a working fossil boiler take the biggest hit — the very bonus designed for them is the one now melting away. Lower-income households actually gain: the income bonus was restructured into three tiers — +40% for taxable household income up to €30,000, +30% up to €40,000 and +10% up to €50,000 — and a new family allowance deducts €10,000 of income per minor child, pulling many families into a higher tier. Total support is capped at 70% of eligible costs — 80% for households with taxable income up to €30,000.
On the technology side, nothing was removed: BAFA-listed heat pumps (SCOP ≥ 3.0), Solar Keymark-certified solar thermal systems and PVT heat pump combinations all remain fundable.
What should you do?
Apply before the next step-down. A household without an income bonus combines the 30% base and the 16% speed bonus for 46% today — up to €12,880 on €28,000 of eligible costs — but the same application filed after 1 February 2027 gets only 42%, on an eligible-cost ceiling that has started to fall. Two procedural rules matter: apply via the KfW Zuschussportal before signing the installation contract (the contract needs a suspensive clause), and secure the confirmation document (BzA) from an energy-efficiency expert or qualified contractor first.
What happens next?
The next degression step lands on 1 February 2027. According to the latest announcements, Berlin is also preparing a "Wertschöpfungsbonus" (value-creation bonus) from 2027 that would link part of the base grant to where heat pumps are produced. Details are due in the second half of 2026 and the rules are still evolving, so check current eligibility with your installer or with us before you apply. And the cost ceiling keeps sliding: by 2030 the same renovation will be assessed against €22,000, not €28,000.
For the full scheme — rates, eligibility, PVT funding routes and the application walkthrough — see our in-depth guide to German heating subsidies in 2026.