Heat Pumps in the Context of GEG 2026: Overview and Significance

The heat pump has evolved from a niche technology to a central element of Germany's heating transition. With the Building Energy Act (GEG), which has been in force since January 2024 and whose requirements will apply across the board by 2026, heat pumps have become the preferred heating solution for new construction and increasingly for existing buildings.

The GEG 2024 – often referred to as "GEG 2026" because municipal heat planning must take place by mid-2026 or 2028 – stipulates that newly installed heating systems must use at least 65 percent renewable energy. Heat pumps typically meet this requirement with ease and also offer significant efficiency advantages over fossil heating systems.

For technical planners, installers, and building services engineers, this means: demand for heat pump solutions is rising rapidly, while at the same time technical and regulatory requirements are increasing. A sound knowledge of the various heat pump technologies, their areas of application, and the legal framework is now indispensable.

The 65-Percent Rule and Its Compliance Options

The core of the GEG is the requirement that every newly installed heating system must cover at least 65 percent of the required heat from renewable energy sources. This rule takes effect at different times depending on building location and municipal heat planning:

  • In new residential areas: immediately since January 2024
  • In major cities (over 100,000 inhabitants): from mid-2026, once municipal heat planning is available
  • In smaller municipalities: from mid-2028, once municipal heat planning is available

Heat pumps are one of the compliance options explicitly mentioned in the law and will, due to their high seasonal performance factor, exceed the 65-percent requirement in most cases. Alternative compliance options such as solar thermal hybrid heating, biomass heating, or connection to a district heating network compete with the heat pump depending on the building situation.

Market Development and Industry Dynamics

The German heat pump market has experienced dynamic growth since 2020. While approximately 60,000 heat pumps were installed annually in 2015, this number had already reached over 350,000 units in 2023. The federal government has set the target of installing at least 500,000 heat pumps annually starting in 2024 to achieve climate goals in the building sector.

This market dynamic presents the industry with challenges: skilled labor shortages, supply bottlenecks for components, and the need to make existing buildings heat pump-compatible are key issues. At the same time, the development offers significant business opportunities for companies that build up the necessary expertise early on.

Heat Pump Technologies: An Overview

Heat pumps use thermodynamic cycles to transfer heat from a lower to a higher temperature level. The various heat pump types differ primarily in the heat source from which they draw energy.

Air-to-Water Heat Pumps

Air-to-water heat pumps, with a market share of over 80 percent, are the most frequently installed variant. They extract heat from outside air and transfer it to the heating water system. The major advantage lies in comparatively low investment costs and simple installation – no earthwork or borehole drilling is required.

The challenge with air-to-water heat pumps lies in the temperature dependency of efficiency: on cold winter days, when heating demand is highest, the seasonal performance factor (SPF) decreases. However, modern units with inverter technology and optimized refrigerant technology still achieve acceptable performance factors of 2.0 to 2.5 even at outdoor temperatures of -15°C.

When installing, sound emissions are a critical factor. Current technical noise protection guidelines (TA Lärm) must be observed, which can lead to restrictions on location selection, particularly in densely populated residential areas. Sound-optimized enclosures, vibration-isolated mounting, and the use of low-noise mode functions are important planning aspects.

Brine-to-Water Heat Pumps (Ground Source Heat Pumps)

Ground source heat pumps utilize the heat stored in the ground via ground collectors or ground probes. The constant temperatures in the ground (approximately 8-12°C at 1-2 meters depth, up to 15°C at greater depths) enable year-round high seasonal performance factors of 4.0 to 5.0 – significantly higher than air-to-water heat pumps.

Ground collectors are laid horizontally at approximately 1.2 to 1.5 meters depth and require an area of approximately 1.5 to 2 times the floor area to be heated. They are therefore suitable mainly for new construction with sufficient land area.

Ground probes are inserted vertically into boreholes typically 50 to 150 meters deep. They require less land area but require water rights approval and sometimes mining rights approval. In water protection areas, ground probe drilling is often not permitted.

The higher investment costs from earthwork and drilling typically amortize over a period of 10 to 15 years through better efficiency. Particularly in existing buildings with higher flow temperatures, a brine-to-water heat pump can offer advantages over the air-to-water variant.

Water-to-Water Heat Pumps (Groundwater Heat Pumps)

Groundwater heat pumps use the constant temperature of groundwater (usually 8-12°C) as a heat source and thus achieve the highest seasonal performance factors of all heat pump types – values of 5.0 and higher are not uncommon.

This requires sufficient groundwater reserves at not too great a depth and appropriate water quality. Two wells are needed: a pumping well for water extraction and an injection well for returning the cooled water. The minimum distance between the two wells should be at least 15 meters to avoid short-circuit flow.

Water rights approval is typically more complex than for ground probes. Additionally, water analyses must be conducted to prevent iron precipitation (ocherization) or corrosion of the heat exchanger. Under suitable site conditions, groundwater heat pumps offer the most efficient solution.

Air-to-Air Heat Pumps and Exhaust Air Heat Pumps

Air-to-air heat pumps operate without a water-based heating system and transfer heat directly via room air. They are frequently used in the form of split air conditioning units with heating function and are particularly suitable for very well-insulated buildings with low heating demand, such as passive houses.

Exhaust air heat pumps utilize the heat from used room air from kitchens, bathrooms, and toilets. They are particularly useful in combination with controlled residential ventilation and can be used for domestic hot water or to support heating. As the sole heating system, they are typically insufficient.

High-Temperature Heat Pumps for Existing Buildings

High-temperature heat pumps have special significance for renovating existing buildings, as they can achieve flow temperatures of 65°C to 75°C. They enable heat pump use even in buildings with conventional radiators without requiring complete renovation of the heat distribution system.

However, efficiency decreases significantly with increasing flow temperatures. The seasonal performance factor in high-temperature applications is typically between 2.5 and 3.5 – still better than fossil heating, but significantly below the potential of low-temperature applications. Careful hydraulic optimization and the best possible building insulation are therefore particularly important.

GEG Requirements and Regulatory Framework

The Building Energy Act in its version valid since January 2024 creates the legal framework for heat pump use and defines minimum efficiency and renewable energy share requirements.

Heat Pump Compliance Option under GEG

Heat pumps meet the GEG's 65-percent requirement if they achieve certain minimum seasonal performance factors. These depend on the electricity used:

  • When using electricity exclusively from renewable energy sources (e.g., via a power supply contract with green electricity certification): no minimum SPF required
  • When using standard grid electricity: minimum SPF of 2.5 (since the German electricity mix already contains approximately 50 percent renewables and is increasing further)

The seasonal performance factor must be verified through a calculation according to DIN EN 15316-4-2 or through manufacturer specifications in accordance with the Ecodesign Regulation. In practice, modern heat pumps easily meet these minimum requirements with proper planning.

Transition Periods and Existing Building Protection

The GEG provides various transition regulations that are relevant for practical implementation:

  • Repairs: Existing heating systems may be repaired even if they do not meet the 65-percent rule
  • Heating System Failure: In case of irreparable failure, a multi-year transition period applies during which gas heating can also be installed – but with the obligation to incorporate increasing shares of renewable energy starting in 2029 (15% from 2029, 30% from 2035, 60% from 2040)
  • Municipal Heat Planning: Until municipal heat planning is available, building owners can benefit from the decision on whether their building will be connected to a district heating network

These transition regulations provide planning certainty but also make clear: the long-term perspective leads unambiguously to renewable heating systems, where heat pumps play a central role.

Proof of Compliance and Documentation

For every newly installed heating system, proof of compliance with GEG requirements must be provided. This includes:

  • Contractor's declaration confirming the 65-percent requirement
  • Calculation or manufacturer verification of the seasonal performance factor
  • If using renewable electricity: proof of the corresponding power supply contract
  • Hydraulic balancing according to procedure A or B

Documentation must be retained for at least five years and can be requested by the responsible authority. For specialist contractors, this means: clean project documentation is not only technically required but also legally mandated.

Consultation Requirement Before Installation

The GEG requires that building owners be consulted about their compliance options and the economic consequences of their decision before installing new heating. This consultation can be provided by a qualified energy consultant, a specialist contractor, or the chimney sweep.

The consultation must present various compliance options, provide economic information, and point out funding opportunities. For specialist contractors, this is an opportunity to demonstrate expertise while meeting legal requirements.

Planning and Design of Heat Pump Systems

Proper technical planning is crucial for the efficiency and reliability of a heat pump system. Errors in the design phase are often difficult and expensive to correct later.

Heating Load Calculation According to DIN EN 12831

Every heat pump planning begins with a standards-compliant heating load calculation according to DIN EN 12831. An oversized system leads to worse seasonal performance factors, frequent cycling, and higher investment costs. An undersized system cannot meet heating requirements on peak load days.

Careful calculation is particularly important in existing buildings, as design values from the construction period are often outdated (e.g., after window replacement or insulation improvements). Individual user behavior should also be considered – a lower set temperature level can significantly reduce the required heating capacity.

System Temperatures and Heat Distribution

Heat pump efficiency increases significantly with lower flow temperatures. While seasonal performance factors of 4.5 to 5.0 are achievable at a flow temperature of 35°C, this drops to approximately 3.0 to 3.5 at 55°C and to 2.5 to 3.0 at 70°C.

Surface heating systems such as floor, wall, or ceiling heating are therefore ideal, as they can operate at low flow temperatures of 30-35°C. In existing buildings, it should be checked whether the required flow temperature can be reduced by using larger radiators or additional radiators.

Hydraulic balancing is mandatory under GEG and is central to efficiency. It ensures that all heating surfaces are supplied with the correct amount of water and prevents oversupply of individual rooms while other areas are undersupplied.

Domestic Hot Water Preparation

Domestic hot water preparation with the heat pump requires higher temperatures than heating (at least 50-55°C to prevent legionella, regularly 60°C to combat legionella). This significantly affects system design.

Modern systems work with two-temperature concepts: low flow temperatures for heating and periodically higher temperatures for hot water. Buffer tanks with fresh water stations can be an energy-efficient alternative to conventional hot water tanks.

In multi-family buildings, the drinking water regulations must be particularly observed. Central hot water preparation with circulation lines leads to higher system temperatures and can impair heat pump efficiency. Innovative concepts such as decentralized hot water preparation or combination with solar thermal systems should be examined.

Buffer Tanks and Hydraulic Integration

Buffer tanks decouple heat generation from heat consumption and enable longer heat pump operating times, reducing cycling and improving efficiency. Dimensioning should be tailored to building size, heat pump output, and usage profile.

Typical buffer tank sizes are 30-50 liters per kilowatt of heating capacity. When using PV power or variable electricity rates, larger tanks can be beneficial to optimally utilize favorable production times or electricity price periods.

Hydraulic integration must be carefully planned: stratification in the tank, avoiding short-circuit flows, and correct sensor placement are important details that determine system efficiency.

Integration of Photovoltaic Systems

The combination of heat pump and photovoltaic (PV) systems is particularly economically and energetically beneficial. Self-generated solar electricity can be used directly for heat pump operation, significantly reducing operating costs and increasing the self-consumption rate of the PV system.

Intelligent heat pump controls can adapt heat pump operation to PV production: excess solar electricity is used to charge the buffer tank or hot water tank, storing thermal energy. This is particularly effective in spring and autumn when heating demand still exists and good solar yields are achieved.

PV system sizing should account for the annual electricity demand of the heat pump. For a typical single-family home with a heat pump, this is 3,000 to 6,000 kWh per year – a PV system of 8-10 kWp can cover a significant portion of this.

Profitability and Funding Options

The profitability of heat pumps depends on many factors: investment costs, operating costs, fuel price development, subsidies, and the lifespan of the system. A sound economic calculation is the basis for any qualified customer consultation.

Investment Costs

Investment costs vary considerably depending on heat pump type and building situation:

  • Air-to-water heat pumps: €12,000-25,000 (including installation, excluding heat source development)
  • Brine-to-water heat pumps with ground collectors: €20,000-30,000 (including earthwork)
  • Brine-to-water heat pumps with ground probes: €25,000-35,000 (including drilling)
  • Water-to-water heat pumps: €25,000-40,000 (including well drilling)

In existing buildings, additional costs often apply for adapting the heating system: larger radiators, underfloor heating, new hydraulics, storage systems. A realistic cost estimate must account for these factors.

Operating Costs and Comparison Calculations

Operating costs for a heat pump are determined primarily by electricity consumption. With a seasonal performance factor of 4.0 and heating demand of 20,000 kWh per year, approximately 5,000 kWh of electricity is needed. At a heat pump electricity rate of €0.25/kWh, annual operating costs are €1,250.

By comparison, a gas heating system at a gas price of €0.10/kWh and efficiency of 95 percent would cost approximately €2,100 per year (20,000 kWh / 0.95 × €0.10). An oil heating system at €0.10/kWh would incur similar costs.

However, the price development of fossil fuels is significantly more volatile than that of electricity. The carbon price, which increases fossil fuel costs, will rise to at least €55 to €65 per ton by 2026. This will further increase gas and oil prices, while electricity will likely remain more stable through the expansion of renewable energy.

Federal Funding for Efficient Buildings (BEG)

The most important funding for heat pumps is the Federal Funding for Efficient Buildings (BEG), administered by the Federal Office for Economic Affairs and Export Control (BAFA). The funding structure was adjusted in 2024 and includes:

  • Basic funding: 30 percent of eligible costs for heating replacement with heat pump
  • Speed bonus: additional 20 percent when replacing functioning oil, gas, coal, or night storage heating (waived for gas unit heaters from 2029)
  • Income bonus: additional 30 percent for households with taxable annual income below €40,000
  • Efficiency bonus: additional 5 percent for heat pumps with natural refrigerants or heat sources from water, ground, or wastewater

Maximum funding is capped at 70 percent of eligible costs, with eligible costs assessed at a maximum of €30,000. Maximum possible funding is thus €21,000.

Important: Funding must be applied for before the measure begins. No contracts with contractors may be concluded before the funding application is submitted. Only planning services are permitted beforehand.

Supplementary Funding

In addition to BEG funding, there are other support options:

  • KfW Supplementary Credit (Program 358): Interest-subsidized credit up to €120,000 for heat pump projects, combinable with BEG subsidy
  • Tax Allowance Under Section 35c Income Tax Act: As an alternative to BEG subsidy, self-employed building owners can deduct 20 percent of costs (max. €40,000) from taxes over three years
  • Regional Programs: Some federal states, municipalities, and energy suppliers offer additional subsidies

Combining different funding programs is sometimes possible but subject to conditions. Individual review is recommended.

Amortization Calculation

A complete economic calculation should, in addition to investment and operating costs, also consider:

  • Maintenance and repair costs (lower for heat pumps than fossil heating)
  • Chimney sweep costs (eliminated with pure heat pump operation)
  • Property value increase from modern heating technology
  • Energy price development over system lifespan (15-20 years)
  • Carbon pricing of fossil fuels

With realistic assessment, heat pumps in single and two-family homes typically amortize after 10 to 18 years – tending to be faster with rising prices for fossil energy sources.

Practical Challenges and Solutions

The practical implementation of heat pump projects presents various challenges that require professional solutions.

Heat Pumps in Historic Buildings

The greatest challenge is posed by existing building stock. Historic buildings with poor insulation, high flow temperatures, and small radiators were long considered unsuitable for heat pumps. Modern technology and intelligent planning approaches now enable economical solutions even here.

Strategies for historic buildings:

  • Lowering flow temperature by enlarging heating surfaces (e.g., replacing radiators with larger models or low-temperature radiators)
  • Selective insulation measures: top floor ceiling and basement ceiling are often easy to insulate and significantly reduce heating load
  • Use of high-temperature heat pumps achieving up to 70°C flow temperature
  • Hybrid solutions: heat pump for base load, peak load boiler for very cold days (bivalent parallel or bivalent alternative operation)
  • Room-by-room optimization: not all rooms need to be equally warm – lowering temperatures in rarely used rooms reduces required system temperature

A detailed existing building analysis is essential: What flow temperature is actually needed? Which rooms are critical? Where are optimizations possible with reasonable effort?

Noise and Vibration Issues

With air-to-water heat pumps in particular, sound emissions are a frequent point of conflict. TA Lärm defines immission limits that vary by area type:

  • Pure residential areas: 50 dB(A) during day, 35 dB(A) at night
  • General residential areas: 55 dB(A) during day, 40 dB(A) at night
  • Mixed and rural areas: 60 dB(A) during day, 45 dB(A) at night

Modern heat pumps achieve sound power levels below 50 dB(A) in whisper mode, resulting in sound pressure levels of approximately 30-35 dB(A) at 5 meters distance. Nevertheless, conflicts with neighbors are possible, especially with unfavorable placement.

Solution approaches:

  • Optimal location selection: maximize distance from own and neighboring bedroom windows
  • Avoid sound reflections from house walls or fences
  • Vibration isolation through appropriate foundation
  • Sound-absorbing enclosures or noise barriers
  • Night mode reduction or whisper mode during quiet hours
  • Preventive neighbor notification before installation

Refrigerants and F-Gas Regulations

The EU F-Gas Regulation provides for a gradual reduction in available quantities of synthetic refrigerants. This particularly affects refrigerants with high global warming potential (GWP) such as R410A (GWP: 2088) or R134a (GWP: 1430).

Modern heat pumps increasingly use low-GWP refrigerants:

  • R32: GWP 675, widely used, good compromise
  • R290 (propane): GWP 3, natural refrigerant, flammable (A3), low charge quantities
  • R600a (isobutane): GWP 3, natural refrigerant, flammable (A3)
  • R1234yf: GWP <1, synthetic refrigerant with very low GWP

Refrigerant choice affects funding (efficiency bonus for natural refrigerants), regulatory future-proofing, and sometimes installation requirements (flammable refrigerants require special safety measures).

Electrical Connection and Grid Capacity

Heat pumps require an electrical connection with adequate power capacity. Typical power consumption is:

  • Single-family home: 3-8 kW electrical
  • Multi-family building: 15-30 kW electrical

In existing buildings, connection reinforcement may be necessary, particularly if an electric vehicle charging station or other electrical consumers are also planned. Costs for connection expansion should be included in cost planning.

Special heat pump electricity rates with interruption periods (interruption during times of high grid load) are often cheaper than standard household electricity. This requires a separate meter and appropriate storage sizing to bridge interruption periods.