Germany: the 2026 heating law, what applies since July 29

What has changed

The amending act was promulgated on July 28, 2026 in the Federal Law Gazette (BGBl. 2026 I no. 226) and has applied in the main since the day after. It renames the Building Energy Act the “Act on Saving Energy and Modernizing Heat Supply in Buildings”, Building Modernization Act for short. Further changes come into force later: on January 1, 2027 among other things on the energy certificate, in 2028 and 2030 on zero-emission buildings.

The requirement that every new heating system runs on at least 65 percent renewable energy no longer exists: the former §§ 71 to 73 have been dropped. The Federal Government wants owners to decide for themselves which heating they install.

What you may install

Whoever replaces a heating system in an existing building has these options under § 42:

• a gas, oil or LPG heating system;
• an electrically driven heat pump;
• a solar thermal system, a biomass heating system or a hydrogen heating system;
• a hybrid heating system: heat pump or solar thermal together with a gas, oil, LPG or biomass boiler;
• a high-efficiency combined heat and power unit, the building connection station for a heat network, a direct electric heating system or another innovative solution.

Gas and oil: the bio steps

Whoever installs a gas, oil or LPG heating system in an existing building after July 29, 2026 must ensure that part of the heat comes from biomethane, bio-oil, biogenic LPG or hydrogen: at least 10% from January 1, 2029, 15% from 2030, 30% from 2035 and 60% from 2040 (§ 43). The obligation can also be met, for example with a solar thermal system of at least 0.04 square meters of aperture area per square meter of usable floor area (for at most two apartments, for 2029 to 2034) or with a heat pump hybrid system whose heat pump reaches at least 30% of the peak-load heater’s output.

If the old heating fails irreparably, there is a transition period of twelve months (§ 43(7)). Whoever deliberately or recklessly fails to meet the obligation commits an administrative offence: a fine of up to €5,000 is possible (§ 108(1) no. 4 and (2)). In addition, the Federal Government must present by December 1, 2026 a law with a green gas and green heating oil quota: from 2045 the fuels for heating are to be fully climate-neutral (§ 42a).

What the heat pump costs: the subsidy

KfW continues to fund the installation of heat pumps, biomass heating, solar thermal and connection to a heat network, under new conditions since July 21, 2026. The basic grant is 30% of the eligible costs (for a single-family house, up to €28,000). Owner-occupiers also get a climate speed bonus of 16% if they replace an old oil, coal, night-storage or gas apartment boiler (Etagenheizung, of any age) or a gas or biomass heating system at least 20 years old, and an income bonus of 40, 30 or 10%, depending on income. Together it is at most 70%, at most 80% for low incomes.

The climate speed bonus falls by four percentage points every six months from February 1, 2027, and the maximum amount by €750. Whoever wants to use it should apply early.

For landlords and tenants

After a modernization with a heat pump, the rent may only rise in full if an annual performance factor of at least 2.5 is proven; otherwise only half of the costs count (§ 559f BGB, with exceptions, for example for buildings built after 1996).

With a new gas or oil heating system, landlord and tenant share certain costs half and half: the network charges for gas and the CO₂ costs from 2028, and the costs of the prescribed fuel share, up to 30% of the fuel consumed, from 2029 (§ 5a Carbon Dioxide Cost Allocation Act). There is an exception for hardship cases (§ 5d).

Municipal heat planning

The municipalities must draw up heat plans: by June 30, 2026 those with more than 100,000 inhabitants, by June 30, 2028 all the others (§ 4 Heat Planning Act). The heat plan shows where a heat network can be built, but has no external legal effect and creates no enforceable rights or duties (§ 23(4)). Ask your municipality before deciding.