Pellet boiler grant in Germany 2026: what KfW still pays
Pellet boilers are still funded, but not the way many online calculations show: the low-dust supplement has gone, while the basic grant stays stable in 2027.
Worked through by Radif Partners · Editorial policy · How we calculate
KfW funds a pellet boiler in an existing home under programme 458 at the same rates as other renewable heating: a 30 % basic grant, a 16 % climate speed bonus (Klimageschwindigkeitsbonus) for owner-occupiers replacing an oil, coal, night storage or gas flat heater or a gas or biomass boiler at least 20 years old, plus an income bonus of up to 40 %. The total is capped at 70 %, or 80 % on a low income, and eligible costs stop at €28,000 for the first home. The €2,500 supplement for particularly low-dust boilers no longer applies since 21 July 2026. If a €30,000 pellet boiler replaces a 28-year-old oil boiler, a household on €55,000 receives €12,880, and one on €38,000 receives €19,600. Unlike heat pumps, the basic grant for pellets is not set to fall in 2027.
What KfW pays for pellets
Biomass heating is on the list of systems programme 458 funds, alongside heat pumps and solar thermal (guideline no. 5.3 b). The grant uses the same parts: a basic grant for every owner, the climate speed and income bonuses for owner-occupiers only, everything up to the ceiling. What changed for pellets on 21 July 2026 is the end of the €2,500 emission reduction supplement (KfW press release). The first-home cap fell at the same time from €30,000 to €28,000.
| Household | Rate | Grant | Own share |
|---|---|---|---|
| Oil boiler, €55,000 income | 46 % | €12,880 | €17,120 |
| Oil boiler, €38,000 income | 70 % | €19,600 | €10,400 |
| Oil boiler, €26,000 income | 80 % | €22,400 | €7,600 |
| Gas boiler 12 years, €55,000 | 30 % | €8,400 | €21,600 |
On €55,000 there is no income bonus, leaving 30 % plus 16 %. On €38,000 another 30 % would be added, but the total is cut to 70 %. On €26,000 the ceiling is 80 %. The young gas boiler gives no climate bonus because it has not run for 20 years (climate speed bonus). As a check, KfW’s own example of €35,000 for pellets replacing a ten-year-old gas boiler on €47,000 income also gives €11,200 in our calculator.
Old calculations with the supplement
Many pages still use the old figures. An application by 20 July 2026 would have brought €15,000 for the same pellet boiler in the first example: 30 % basic grant, 20 % climate bonus, a €30,000 cap. A particularly low-dust boiler added the €2,500 supplement, €17,500 in total. Today it is €12,880. Planning with the old rules overstates the money by €4,620. Why the efficiency bonus is also missing is explained under efficiency bonus.
Technical conditions for the boiler
Only systems on the biomass list that BAFA keeps up to date are funded. The guideline’s minimum technical requirements for pellet boilers are automatic feed, output and combustion control, automatic ignition, testing by an accredited institute and a buffer tank sized to the rated output. Pellet stoves with a water jacket qualify on the same terms. Air-only pellet stoves, manually fed stoves, self-built and second-hand systems are excluded.
Dust limits today are stricter for pellet boilers than for log wood. From 1 October 2027 a much lower dust limit applies to all biomass systems, at the level that used to trigger the supplement. By 30 June 2027 the federal economy ministry intends to review whether the limits should change in light of EU negotiations. If your application falls close to that date, ask the installer whether the unit already meets the future limit. As with any funded system, hydraulic balancing is required and confirmed by the installer on the industry form.
Apply now or later?
Grant on that date
€11,445
| Climate speed bonus | 12 % |
| If you apply now | €12,880 |
| Waiting costs | €1,435 |
Income above €50,000, so no income bonus.
Pellets or heat pump from 2027
On 1 February 2027 the climate bonus and cap fall equally for every system. The pellet boiler in the first example would then bring €11,445. After that the paths split: from the first quarter of 2027 only the heat pump basic grant is set to fall to 15 %, offset by a 15 % value-added bonus if the unit originates in the EU. The start date and proof are not yet published.
| Application April 2027 | Rate | Grant |
|---|---|---|
| Pellet boiler | 42 % | €11,445 |
| Heat pump made in the EU | 42 % | €11,445 |
| Heat pump made elsewhere | 27 % | €7,358 |
From 1 August 2028 there is no climate bonus at all. The pellet boiler on this income would then keep the basic grant of €7,500. The grant is only part of the picture, though: fuel, storage room, chimney and servicing set the running costs. We have not analysed an official pellet price series, so we do not calculate pellet running costs. The grant calculator compares heat pump amounts.
Existing boiler: cut the dust instead of replacing it
If you already have a pellet or wood chip boiler, BAFA funds measures that reduce its dust emissions, at 50 % of eligible costs (BAFA). It applies to boilers above a minimum output, not to single-room stoves. More under heating optimisation.
Grant or tax credit
Instead of the grant, an owner-occupied home older than 10 years can use the section 35c income tax credit: 7 %, 7 % and 6 % of the costs over three years. For €30,000 that is €6,000, spread across three German tax returns, and only if you owe that much income tax. You cannot have both for the same work. The grant beats it in every example above, even without the climate bonus (tax credit). As with any application, sign the conditional contract first, then apply to KfW, then install (information sheet 458).