In brief
The government plans to cut heat pump subsidies to save around €2.1 billion by 2030, according to a draft for the budget committee.
The cap on eligible installation costs drops from €30,000 by €2,000 immediately, then by €750 every six months. The 30% base subsidy remains, but half will require European-made equipment from 2027.
Low-income households (under €30,000 taxable) get a 40% bonus, while support for higher incomes is cut sharply. A new child bonus raises income thresholds for families.
The 20% bonus for replacing old heaters will shrink by 4 percentage points every six months, ending by late 2028, two years earlier than previously planned.
The coalition also plans to remove the requirement that new heating systems use 65% renewables, allowing gas and oil heaters if they use increasing shares of CO₂-neutral fuels.
The proposal
A draft for the Bundestag budget committee, which meets on Wednesday, outlines a sharp reduction in state support for heat pumps and other climate-friendly heating. The coalition of CDU/CSU and SPD aims to save around €2.1 billion by 2030. The maximum eligible installation cost will drop from €30,000, first by €2,000 immediately after the new system takes effect, then by €750 every six months. The base subsidy of 30% remains, but from next year half of it will only be granted if the equipment is European-made.
Income-based adjustments
The subsidy is being restructured to focus on lower incomes. Households with a taxable income under €30,000 will see their bonus rise from 30% to 40%, giving them a maximum grant of €22,400 this year. For incomes between €30,000 and €40,000 the maximum drops to €19,600, and for those over €40,000 it falls from the current €16,500 to €12,880 initially, then stepwise to €6,600 by 2030. A new child bonus adds €10,000 to the income threshold for families, effectively raising the ceiling for higher support.
- Under €30,000
- 22400 €
- €30,000–€40,000
- 19600 €
- Over €40,000
- 16500 €
Data from the article text
Phase-out of bonuses
The climate bonus, an extra 20% for replacing a functioning oil or gas heater at least 20 years old, will be reduced by 4 percentage points every six months. If the phase-out starts in January 2027, the bonus will disappear by the end of 2028. Under the previous government's plan it would have begun declining only after 2028.
Reactions
“That is irresponsible. Every euro of subsidy triggers four euros of investment, strengthening trades and the heat pump industry.”
Heating law reform
Parallel to the subsidy cuts, the coalition plans to overhaul the Building Energy Act. The core 65% rule, requiring every new heating system to run on 65% renewable energy, will be scrapped. New gas and oil heaters will still be allowed if they use an increasing share of CO₂-neutral fuels like biomethane.