How to apply for a grant for your new heating system

As of January 1, 2020, a lot has happened in terms of funding for heating systems. In a nutshell: if you have only thought about a new heating system, you should now take action. The stars are good for inexpensive retrofitting with government grants and loans for efficient heating systems.

Table of contents Table of contents Funding for the new heating system 2020: Successfully apply for a grant

• Funding for heating: An overview of the most important things
• State subsidy for the new heating system
• BAFA grants
• BAFA: What does the funding look like?
• KfW grants
• KfW: What does the funding actually look like?
• Example: Apply for double funding for heating

Table of contents Table of contents Funding for the new heating system 2020: Successfully apply for a grant

• Funding for heating: An overview of the most important things
• State subsidy for the new heating system
• BAFA grants
• BAFA: What does the funding look like?
• KfW grants
• KfW: What does the funding actually look like?
• Example: Apply for double funding for heating

Funding for heating: An overview of the most important things

• Instead of fixed grant amounts, there are now percentage grants - up to 45 percent!
• The scope of eligible costs has been significantly expanded.
• There is an ineligible replacement obligation for old oil heaters.
• The renovation / new construction of heating systems with renewable energies is funded.
• Applications must be submitted before the start of the measure.

State subsidy for the new heating system

Two major institutions are relevant for government funding for the new heating system: firstly, the Kreditanstalt für Wiederaufbau (KfW), and secondly, the Federal Office of Economics and Export Control (BAFA). KfW offers low-interest loans with long fixed interest rates and terms and, depending on the program, repayment grants, while BAFA only works with grants. Both providers can be combined with each other; depending on the measure, reference is even made to the mutual programs.

What BAFA grants are there in existing and new buildings?

On 2020-01-01, BAFA completely revised the "Heating with renewable energies" program. There were fixed grants in the course of the funding until the end of 2019. Funding of a maximum of 2, 000 euros was possible for an air-water heat pump in the new building. Since 2020, funding has been based on the eligible costs as a percentage. These include not only the acquisition costs of the new heating, but also, for example, the costs for the expansion of the old system in the building stock. A maximum of 50, 000 euros of eligible costs will be recognized per residential unit. That means a grant amount of up to 22, 500 euros in existing buildings and up to 17, 500 euros in new buildings - per living unit!

An energy consultant will help you put together your perfect funding combination for the new heating system.

Photo: iStock / anyaberkut

Overview of eligible costs

• Acquisition cost of the type of heating funded.
• Installation and commissioning costs including measurement, control and regulation technology.
• Costs of the necessary environmental measures (e.g. earth drilling, disposal of the old system).
• Energetic optimization of heat distribution, such as calculating radiators (only in existing buildings).
• Consulting, planning and construction support services with a direct connection to the heat generator being funded.

The most important prerequisite for receiving a BAFA grant in the existing building stock: The previous heating system must not be affected by an obligation to replace it in accordance with EnEV 2014. If you can answer the following criteria of the existing heating system with "yes", BAFA funding is not an option.

• At least 30 years old
• Oil or gas heating
• Constant temperature boiler with 4-400 kW

Tip: The replacement of a 29 year old heater is still eligible this year, while it will be subject to replacement next year.

Gas condensing boilers as sole heating and air-to-air heat pumps, as well as oil heaters are excluded from the funding. It should be noted that not every system defined as eligible for the individual construction measure also fulfills the requirements. Example: A heat pump is defined as eligible by BAFA, but it does not achieve the required values ​​in the annual labor factor calculation.

Promotion in existing buildings

Type of heating	Subsidy rate	Subsidy rate at exchange Oil heating	requirement
Oil condensing heating	-	-
Solar thermal (Construction + expansion)	30 percent	-	- Solar Keymark certification mark - Depending on the type of collector there are Minimum collector areas
Air Water heatpump	35 percent	45 percent	JAZ> 3.5
Water water- Heat pump, brine-water Heat pump	35 percent	45 percent	JAZ> 3.8
Biomass heating (Pellet, firewood, Wood chips)	35 percent	45 percent	- Min. 5 kW nominal heat output - Boiler efficiency> 89 percent
Hybrid heating with renewable energies	35 percent	45 percent	For each component of the Hybrid heating apply individual requirements of the individual systems
Gas hybrid with renewable energies	30 percent	40 percent	- Space heating efficiency> 92 percent - Regenerative share in the Heating load> 25 percent
Gas hybrid "Renewable Ready"	20 percent	-	- see Gas hybrid - the additional regenerative Heat generator must be inside of two years

The requirements in the new building are somewhat tighter. There are many brands of air-water heat pumps that can easily meet the required JAZ in existing buildings, but not in new buildings.

Grants in new buildings

Type of heating	Subsidy rate	requirement
Oil condensing heating	-
Solar thermal (construction + expansion)	30 percent	- Solar Keymark certification mark - Depending on the type of collector there are Minimum collector areas - At least 3 residential units or active solar house
Air Water heatpump, Water-water heat pump, Brine-water heat pump	35 percent	- JAZ> 4.5 - Surface heating as a heat distribution system
Biomass heating (Pellet, firewood, wood chips)	35 percent	- At least 5 kW nominal heat output - Boiler efficiency> 89 percent - condensing heating or secondary Particle separation installed
Hybrid heating with renewable energies	35 percent	For every component of the hybrid heating the individual requirements apply of the individual systems
Gas hybrid with renewable energies	-
“Renewable Ready” gas hybrid	-

BAFA: What does the funding look like?

In our example, a 21-year-old oil condensing heating system is installed in an existing building. This is now to be exchanged for an air-water heat pump. How to proceed with the application:

1. Get an offer from the heating engineer about the overall measure.
2. Check the annual coefficient of performance of the air-water heat pump (for example with the JAZ calculator of the Bundesverband Wärmepumpe eV). If the annual performance factor is less than 3.5, you should speak to the heating engineer about another make that achieves a JAZ of at least 3.5.
3. Apply for the grant from the BAFA.
4. If you want to be on the safe side, you should wait for BAFA's approval. In principle, however, implementation of the measure can begin.
5. After completion of the renewal, submit the relevant documents (e.g. invoices, verification of hydraulic balancing and so on).
6. You can receive the payment and enjoy the lower, ongoing energy costs in the long term.

There is also high subsidies for new heating in new buildings. Do you use all possibilities?

Photo: iStock / ah_fotobox

Calculation example

measure	costs
Removal of old oil heating + tanks	2, 500.00 euros
New acquisition of air-water heat pump incl. Assembly and wall breakthroughs	18, 000.00 euros
Exchange of radiators for low temperature radiators without line renewal	2, 500.00 euros
Hydraulic balancing	650.00 euros
Total eligible costs	23, 650.00 euros
Subsidy for oil heater replacement: 45 percent	10, 642.50 euros
Actual own contribution	13, 007.50 euros

What KfW grants are there in existing and new buildings?

KfW is not primarily about subsidies for the heating system itself, but about low-interest loans that support your renovation or new construction with special conditions. However, KfW also has a few programs that work purely with a grant. The biggest difference between these two types of programs (credit and grant) is that the loans have to be arranged through a bank, while the grants can be applied for via the KfW grant portal. As with BAFA, the same applies to KfW: first obtain offers, then apply for a grant and then start implementing the measure. Once the implementation has already started, funding can no longer be applied for.

The following programs are available through the grant portal

• Child benefit (program 424): For the construction or purchase of owner-occupied residential property.
• Energy-efficient renovation - investment grant (program 430): For renovation to a KfW efficiency house or individual energy measures.
• Energy-efficient construction and renovation - Subsidy for construction supervision (program 431): For planning and construction supervision by energy efficiency experts.
• Energy-efficient construction and renovation - Fuel cell subsidy (program 433): For the installation of innovative fuel cell systems in residential buildings.
• Age-appropriate renovation - investment subsidy (program 455): For burglary protection, more living comfort and fewer barriers.

The following programs are taught through KfW partner banks

	description	Existing building	New building
124	Home ownership program	Credit over maximum 100, 000 euros for the Buying an apartment building	Credit over maximum 100, 000 euros for the new building Residential building
134	Home Ownership Program - Cooperative shares	Credit over maximum 50, 000 euros for the buy from Cooperative shares
151	Energy efficient renovation - credit	Credit over maximum 120, 000 euros for the Refurbishment to KfW efficiency house or Credit over a maximum of 50, 000 euros for individual energetic measures
153	Energy efficient building		Credit over maximum 120, 000 euros for the Building one KfW efficiency house; Up to 30, 000 euros Repayment subsidy
159	Convert according to age	Credit over a maximum of 50, 000 euros for barrier-free conversion, more living comfort, better Burglary protection
167	Energy efficient renovation - Supplementary credit	Credit over a maximum of 50, 000 euros for the changeover of the heating on renewable energies
270	Renewable energy - default	Loan to finance of newly built Photovoltaic systems, CHP plants, Battery storage	Loan to finance of newly built Photovoltaic systems, CHP plants, Battery storage

Heating with sustainable and renewable energies protects the environment and your wallet.

Photo: iStock / RomoloTavani

KfW: What does the funding actually look like?

When building an efficient house or renovating an existing house with energy-efficient measures, KfW offers cheap loans. In contrast to mortgage lending at normal banks, KfW's interest rates are identical for all customers and linked to fixed framework conditions. The interest rate rises over a longer term, but the creditworthiness of the borrower has no influence. In addition, some of the programs are age-independent. This means that the age of the borrower has no influence on the grant approval. Whereas banks include a risk factor for older people, which makes the loan more expensive.

Another advantage of KfW loans is that some banks count them as equity for their own financing. For example, if you need a loan of EUR 400, 000 and can cover EUR 100, 000 of this with KfW, this amount can be seen as equity. This would give 25 percent equity and 75 percent would have to be financed with the second bank. This results in better conditions than with a starting situation of full financing.

Example: Apply for double funding for heating

Using the example of a new building, we will show you what a combination of funding from a BAFA grant and a KfW program can look like. A classic new building constellation is assumed as the basis: A family with two children would like to build a new KfW 55 efficiency house.

• KfW program 153: Construction of a KfW efficiency house with KfW 55 standard. There is a low-interest loan of up to EUR 120, 000 and a repayment subsidy of up to EUR 18, 000.

  Alternatively: construction of a KfW-40 Plus efficiency house, here the repayment subsidy would increase to 30, 000 euros.

• KfW program 124: low-interest loan for a maximum of 100, 000 euros.
• KfW program 431: 50 percent subsidy for the energy consultant who complies with the KfW 55 Efficiency House guidelines. At a cost of around 2, 000 euros for an energy consultant, the return is 1, 000 euros.
• BAFA program: If the KfW 55 efficiency house is built with an air-water heat pump that has an annual performance factor> 4.5, there is a 35 percent subsidy. Assuming costs of approximately 18, 000 euros, this results in a grant amount of 6, 300 euros.
• KfW program 424: There is a grant of 1, 200 euros per child for ten years. With two children, this will pay out 24, 000 euros.

This results in a loan amount of 220, 000 euros from KfW with low-interest conditions. There are also possible grants of EUR 49, 300. Almost a quarter of the loan amount is subsidized by the state!

Sandra Hess