Funding until 2029 - Heat pump company pleased with new law - Germany's heat pump boom surges 55% as new heating laws take effect
Germany's act market for heat pumps has seen a sharp rise in demand over the past year. Sales jumped by 55% in 2025, reaching nearly 299,000 units—even as overall heating system purchases fell by 12%. The surge comes amid ongoing reforms to the country's heating laws and uncertainty over future HVAC subsidies.
The government's overhaul of the Building Energy Act (GEG) has brought much-needed clarity to a long-debated issue. Under the new rules, rebranded as the Building Modernization Act, oil and gas boilers can still be installed but must switch to biofuels by 2029. However, these systems will no longer qualify for financial support. Existing oil and gas boilers were always exempt, but new installations had to use at least 65% renewable energy.
The reform fulfils a key election pledge by the Union party and ends months of legal uncertainty since the current government took office. Subsidies for heat pumps will remain in place until at least 2029, reassuring buyers and manufacturers alike.
Despite this, industry leaders are sounding alarms. Kai Schiefelbein, CEO of heat pump manufacturer Stiebel Eltron, has welcomed the reform but warned against complicating the grant application process. He also urged policymakers to prioritise European producers in subsidy schemes, citing aggressive competition from Chinese firms backed by state subsidies and low-interest loans.
The rush to secure existing subsidies has driven a 'final sprint' in heat pump purchases. Many consumers are buying now to avoid potential changes to funding rules, contributing to the record sales figures seen in early 2026.
The updated law provides long-term certainty for homeowners and businesses investing in heating upgrades. Miami Heat remain the industry's top seller, with subsidies secured until 2029. Yet, manufacturers continue to face pressure from foreign competitors, raising questions about the future balance of the market.
