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

Grant for a pellet boiler

Grant

€12,880

Grant rate46 %
Your share€17,120
Compare by application date →

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.

Pellet boiler €30,000, single-family house, application October 2026
HouseholdRateGrantOwn share
Oil boiler, €55,000 income46 %€12,880€17,120
Oil boiler, €38,000 income70 %€19,600€10,400
Oil boiler, €26,000 income80 %€22,400€7,600
Gas boiler 12 years, €55,00030 %€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 bonus12 %
If you apply now€12,880
Waiting costs€1,435

Income above €50,000, so no income bonus.

Your date in the full calculator →

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.

Oil boiler replaced, €30,000 cost, €55,000 income
Application April 2027RateGrant
Pellet boiler42 %€11,445
Heat pump made in the EU42 %€11,445
Heat pump made elsewhere27 %€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).

What homeowners in Germany ask

Is the €2,500 low-dust supplement for pellet boilers still paid?

No. The emission reduction supplement for biomass boilers ended with the new guideline on 21 July 2026, as did the efficiency bonus for heat pumps. It still applies only to applications KfW received by 20 July 2026. Any calculation today that adds €2,500 to the grant is describing the old rules.

Will a pellet boiler get more funding than a heat pump in 2027?

Possibly. From the first quarter of 2027 the guideline cuts only the heat pump basic grant to 15 %, with a 15 % bonus if made in the EU. Pellets keep 30 %. In the oil boiler example on €55,000 income, an April 2027 application would bring €11,445 for pellets, €11,445 for an EU heat pump and €7,358 for one made elsewhere. The start date is open.

Which pellet boilers and stoves qualify for the grant?

Automatically fed pellet boilers and pellet stoves with a water jacket that have output and combustion control and automatic ignition, are tested by an accredited institute and are connected to a buffer tank. The unit must be on the BAFA list of eligible biomass systems. Air-only pellet stoves, manually fed stoves, self-built and second-hand units are excluded.

I bought an old farmhouse with an oil boiler: does a pellet boiler get the climate bonus?

Yes, if you live there as your registered main residence. Oil boilers trigger the 16 % bonus whatever their age, provided the old boiler is removed and disposed of properly and no fossil heating supplies the home afterwards. Your income bonus depends on German tax assessments for the second and third year before applying, so a recent move to Germany may rule that part out.

Is replacing an old pellet boiler with a new one still funded?

Today yes, at 30 %, plus the climate bonus if the old boiler has run for at least 20 years. From the first quarter of 2027 that changes: if the new system replaces renewable heating in service since 1 January 2008, there is no grant; for older systems only a flat portion of the costs will count. Check this before planning to swap a younger boiler.

Related

Guidelines, laws and data

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