Germany's heating policy has shifted again. The government has confirmed that gas heating systems can once again be installed in new buildings, reversing a restriction that had been a central — and controversial — pillar of the previous administration's climate policy. At the same time, state subsidies for heat pump installations have been reduced, making the greener alternative less financially attractive than it was a year ago. For expats living in Germany, whether you rent or own, these changes have practical implications: for your energy bills, your service charges (Nebenkosten), and for any property decisions you are considering.
Under the previous Heizungsgesetz (Heating Act), new buildings were broadly required to move away from fossil fuel heating. The new rules relax this: installing a gas heating system in a newly built property is permitted again. This is a significant policy reversal.
Experts, however, are sounding a note of caution. While a gas boiler may have a lower upfront installation cost compared to a heat pump, the long-term running costs are tied to gas prices — which have proven highly volatile in recent years, particularly since the energy crisis of 2022. Anyone signing a long-term rental contract or buying a new property with gas heating should factor in the possibility of higher energy bills over the life of the system.
For tenants, this may mean that newly built apartments or houses are fitted with gas heating rather than heat pumps — a choice made by the developer or landlord, not the tenant. Your Nebenkosten (additional service charges) will reflect the heating system used.
The state grant scheme supporting the switch to heat pumps — part of the Bundesförderung für effiziente Gebäude (BEG) programme — has seen its support levels cut. Previously, the subsidy could cover a significant portion of installation costs, making heat pumps competitive with gas even on upfront price. With reduced funding, the financial case for landlords and homeowners to choose a heat pump is weaker.
This matters for the rental market. Landlords who might have been incentivised to modernise heating systems are now less likely to do so if the subsidies no longer make the numbers work. For tenants, this could mean slower modernisation of older heating systems in existing buildings, which may translate to continued reliance on older gas or oil boilers and their associated running costs.
If you rent your home in Germany, you generally have limited say over what type of heating system is installed — that is the landlord's decision. However, you should be aware of the following:
If you are buying property in Germany or planning a renovation, the new rules give you more flexibility on heating choice — but require careful financial planning:
Mostly indirectly. You do not choose the heating system, but the type of system in your building affects your Nebenkosten. If your landlord installs a new gas system, your heating costs will track gas prices. If you have concerns about high energy costs, ask your landlord about the building's energy efficiency rating and what heating system is planned or in place.
No. Subsidies have been reduced, not eliminated. The BEG programme still offers grants for heat pump installations, but at lower levels than before. The exact amounts depend on your household income, the type of heat pump, and other factors. Check the current figures at kfw.de or consult a certified energy advisor for an up-to-date calculation.
Not automatically. These are rules about new installations and grant levels. If your building already has a heating system in place, nothing changes overnight. The impact will be felt gradually as landlords make decisions about renovations and new developments choose their heating infrastructure.
Germany's heating policy is in a transitional phase, and the practical consequences for renters and property owners will unfold over the coming years rather than overnight. If you are a tenant, focus on understanding your Nebenkostenabrechnung and the energy certificate of any flat you plan to rent. If you are a homeowner or considering a purchase, consult a certified energy advisor before making heating system decisions, as the financial landscape has changed. For the most current subsidy information, always check kfw.de directly.
Source: Tagesschau
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