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Heating overhaul: German government cuts subsidies for heat pumps

The German government plans to significantly reduce grants for heat pumps and other climate-friendly heating systems. According to Spiegel, around 2.1 billion euros are to be saved by 2030.

Heating overhaul: German government cuts subsidies for heat pumps
Photo: cdn.prod.www.spiegel.de

The German government plans to significantly reduce grants for heat pumps and other climate-friendly heating systems. According to Spiegel, around 2.1 billion euros are to be saved by 2030.

Starting next year, the maximum eligible cost for installing a heat pump will drop from the current 30,000 euros to 28,000 euros, and then by 750 euros every six months. By the second half of 2030, it will stand at 22,000 euros, according to a finance ministry letter to the Bundestag budget committee seen by Spiegel.

The so-called climate bonus for early replacement of an old heating system will decrease by four percentage points every six months from next year and expire in 2029. At the same time, the income bonus will be differentiated: households with a taxable income below 30,000 euros will receive 40 percent funding, while those earning between 40,000 and 50,000 euros will get ten percent. Families with minor children benefit from a one-time child supplement of 10,000 euros, which is deducted from the assessable income.

A new bonus of up to 15 percent will be introduced for heating systems produced domestically – defined as “Made with Europe” or value creation within the EU. The efficiency bonus for heat pumps will be eliminated, and switching from district heating to another system will no longer be subsidized. Savings from scrapping the climate bonus and lowering eligible costs amount to 5.5 billion euros, offset by additional spending of nearly four billion euros for the new income bonus and child supplement.

Source: www.spiegel.de