The BAFA Heat Pump Subsidy 2026 in Detail
The Federal Funding for Efficient Buildings (BEG) is Germany's central subsidy instrument for heating system replacement. Since the 2024 reform, funding runs through the Federal Office for Economic Affairs and Export Control (BAFA) as a direct grant rather than a KfW loan. This simplifies access since no credit check is required.
The base subsidy is a flat 30 percent of eligible costs. It applies to all heat pump types provided they meet certain minimum technical requirements: The heat pump must achieve a seasonal COP of at least 2.7, a heating load calculation according to DIN EN 12831 must be available, and hydraulic balancing must be performed. Eligible costs are capped at 30,000 euros for single-family homes for the first residential unit. Higher limits apply for multi-family buildings.
The Climate Speed Bonus: Plus 20 Percent
The Climate Speed Bonus aims to motivate owners to switch from fossil heating to renewable energy as quickly as possible. It amounts to 20 percent and is granted when a functional fossil heating system (gas, oil, or storage heaters) is replaced. The old system must be at least 20 years old, or there must be a statutory replacement obligation under the Building Energy Act.
Starting in 2025, the Climate Speed Bonus decreases by 3 percentage points every two years. In 2026 it is still 17 percent, and for 2027 and 2028 it will be approximately 14 percent. Those who want to capture the full bonus should act sooner rather than later. The bonus does not lapse if the old heating system is broken, as long as it would have been repairable at the time of the application.
The Income Bonus: Plus 30 Percent for Lower Incomes
The Income Bonus of 30 percent targets owner-occupiers with low income. The income threshold is 40,000 euros in taxable household annual income. The income tax assessment from two years prior serves as proof. If multiple people live in the household, their incomes are added together.
In practice, this means: A retired couple each receiving 1,800 euros gross monthly pension (= 43,200 euros gross per year) often falls below the 40,000 euro threshold after deducting the standard allowance and tax-free amount, and can claim the Income Bonus. Single parents with middle incomes can also benefit.
Maximum Subsidy: How to Optimally Combine the Bonuses
Combining all three subsidy components yields a theoretical 80 percent (30 plus 20 plus 30), but this is capped at 70 percent. This is the maximum possible subsidy rate. With eligible costs of 30,000 euros, this means a grant of 21,000 euros and net costs of only 9,000 euros for a complete heat pump system.
The optimal strategy depends on your situation. If you own an old gas or oil boiler and have a low income, you can reach the full 70 percent subsidy. If you can only use the base subsidy and climate bonus (50 percent), you still receive 15,000 euros on 30,000 euros of eligible costs. And even with the base subsidy alone (30 percent), the switch is worthwhile thanks to annual savings on operating costs.
The KfW Complementary Loan: Affordable Financing for Remaining Costs
In addition to the BAFA grant, the KfW offers a complementary loan (program 358 for owner-occupiers, program 359 for landlords). The terms are attractive: a loan amount up to 120,000 euros per residential unit, interest rates significantly below market level (typically 1.0 to 2.5 percent effective), and repayment subsidies at certain energy efficiency levels. The KfW loan can only be applied for in combination with a BAFA grant.
Application Process Step by Step
The correct sequence is crucial to avoid losing the subsidy. First, commission an energy consultant to prepare an individual renovation roadmap (iSFP), which adds another 5 percent bonus to the grant. Then obtain quotes from specialist companies. Next, submit the BAFA application online through the customer portal. Only after receiving confirmation of application receipt may you commission the specialist company. After installation and acceptance, submit proof of use and receive the grant in your account.
A common mistake: Commissioning the installer before the BAFA application has been received. This leads to complete loss of the subsidy. Planning services and material orders are exempt from this requirement, but the installation contract may only be issued after the application is received.
Conclusion: Act Now Before Bonuses Decrease
The BAFA subsidy for heat pumps has never been as attractive as it is now. With up to 70 percent grants and the KfW complementary loan for remaining costs, the switch is possible even for owners with limited budgets. Since the Climate Speed Bonus decreases every two years, it pays to act soon. Use our heat pump calculator to determine your individual subsidy and the resulting net costs.