Germany’s new rebate program for residential heat pumps has come into effect

From pv magazine Germany

The German government has proposed changes to its rebate scheme to support the deployment of sustainable heating. The new rules now include heat pumps with natural refrigerants, only clean burning biomass ovens, and hydrogen cell heating systems.

The program covers up to 40% of the costs to buy and deploy heat pumps, with a basic subsidy rate of 25%. Depending on the type of heat pump, there is also a subsidy bonus ranging from 5% to 10% to replace old, inefficient heating systems.

The bonus, which was previously only awarded to heat pumps with geothermal energy, wastewater, or groundwater as a heat source, could now be granted to heat pumps with natural refrigerants such as propane, for example.

From 2028, only heat pumps that use natural refrigerants will be funded. However, the government also noted open negotiations about a new regulation that could include partially fluorinated hydrocarbons. Depending on the outcome, there could still be changes in the promotion of heat pumps with propane.

Another funding condition is a minimum co-efficient of performance (COP) of 2.7, and up to 3.0 COP from 2024. The Federal Heat Pump Association said there are projects in which such annual performance figures could not be achieved without additional measures, such as replacing heating distribution systems or building insulation.

“The good news is that the funding environment for heat pumps will remain largely stable in 2023,” said Martin Sabel, managing director of the German Heat Pump Association. “Up to 40% of the investments not only in the heat pump itself, but also in necessary environmental measures such as radiator replacement or the development of geothermal sources are subsidized.”

For other heating systems such as biomass ovens or fuel cell systems lower rebates rates apply.