On January 1, 2023, Germany’s new Federal Funding for Efficient Buildings program came into force, providing subsidies for various alternative heating systems, including heat pumps with a COP of at least 2.7 – and a bonus for those charged with natural refrigerants.
According to Germany’s Federal Office of Economics and Export Control, subsidies for heat pumps will cover up to 40% of their cost. This includes a basic subsidy of 25%, a 5% bonus if the refrigerant is natural and a 5% bonus if the heat source is ground, water or wastewater. (The two bonuses are not cumulative, however.)
In addition, a bonus of 10% can be granted for the replacement of an operational oil, gas floor, gas central, coal or night-storage heating system. Gas heating systems, with the exception of gas floor heating systems, must be at least 20 years old.
The primary natural refrigerant used in residential heat pumps in Europe is propane (R290).
The minimum eligible investment required for a subsidy is €2,000/US$2,149 (gross). The eligible costs for energy refurbishment measures in residential buildings are capped at €60,000 (US$64,466) per residential unit and calendar year, up to a maximum of €600,000 (US$644,658) per building.
“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, on the Federal Office of Economics and Export Control’s website.
Other technologies that are eligible for subsidies include solar collector systems, biomass heating and stationary fuel cell heating. In the construction and retrofitting of heat pumps and biomass systems for space heating, at least 65% of the residential units or areas supplied by the systems must be heated by renewable energies.
Starting in 2028, only heat pumps that use natural refrigerants will be funded, according to the Federal Office of Economics and Export Control. However, open negotiations about a new regulation could include partially fluorinated hydrocarbons. Depending on the outcome, there could still be changes in the promotion of heat pumps with propane.
The minimum required COP of 2.7 may go up to 3.0 in 2024. The German 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.
Germany is also working on drafting a Blue Angel ecolabel for heat pumps. According to the German Environment Agency (UBA) interim report, which was released in September 2022, only domestic heat pumps charged with natural refrigerants will be awarded the Blue Angel certification.