Federal government streamlines building subsidies and prioritizes poorly insulated residential buildings

The Federal Ministry for Economic Affairs and Energy (BMWE) has issued the new Funding Guideline for Federal Funding for Efficient Buildings – Residential Buildings (BEG WG) dated August 17, 2026. It was published in the Federal Gazette (Bundesanzeiger) on September 2, 2026, and replaces the previous guideline dated December 9, 2022. The guideline comes into force effective July 21, 2026, and is valid until December 31, 2030.

The BEG supports the achievement of the climate goals of the Federal Climate Protection Act (KSG) and flanks the requirements of the Building Energy Act (GEG). The objective is to reduce greenhouse gas emissions in the building sector to the permissible annual emission amount of approximately 66 million tonnes of CO₂ equivalents by 2030 and to save approximately 3.2 million tonnes of gross CO₂ annually. The funding is administered by the implementing agencies BAFA and KfW, with responsibility for the BEG WG lying with KfW.

Focus on Life Cycle and Serial Renovation

With the new version, systemic renovation is streamlined and specifically aligned with the life cycle assessment (LCA) as a core requirement of sustainable construction. The requirements for the sustainability class (NH) are simplified and bureaucracy is reduced. At the same time, the bonus for serial renovation—where prefabricated facade and roof elements are assembled off-site—is expanded.

• SerSan Bonus: an additional 15 percentage points for renovation to Efficiency House 40 EE or 55 EE, five percentage points for Efficiency House 70 EE
• WPB Bonus: an additional ten percentage points for Worst Performing Buildings that are renovated to level 40, 55, or 70 EE
• NH Class: an additional five percentage points upon meeting the life cycle requirement

The bonuses are cumulative. Furthermore, repayment grants and bonuses will only be granted if a newly installed heat pump originates within the Union, in order to ensure local value creation and resilient supply chains.

Funding Rates and Maximum Limits

Funding is provided as a loan with interest rate subsidies and repayment grants; municipal applicants can additionally apply for a non-repayable investment grant. Repayment grants amount to five percent for the Efficiency House levels Monument EE and 55 EE, and ten percent for 40 EE. For municipal applicants, grants range between ten and 25 percent depending on the level achieved.

• Maximum limit of eligible expenditures: up to 150,000 euros per residential unit
• Specialist planning and construction supervision: up to 10,000 euros per project for single- and two-family houses
• Multi-family houses: 4,000 euros per residential unit, maximum 40,000 euros total per project
• Funding rate for specialist planning, construction supervision, and LCA services: 50 percent

Application Process and Period of Validity

Eligible applicants include all investors, including private homeowners, homeowners’ associations, contractors, companies, non-profit organizations, and municipalities. A two-stage application process via the KfW applies; the federal and state governments, as well as their authorities and political parties, are not eligible to apply. The involvement of an energy efficiency expert is mandatory for the application.

The guideline was signed on August 17, 2026, in Berlin and entered into force with effect from July 21, 2026. For applications submitted before the entry into force, the last version of the replaced 2022 guideline continues to apply. The new funding guideline is intended to make systemic funding more efficient and simultaneously contribute to budget consolidation without neglecting emission reductions in the building sector.

Source: Bundesanzeiger, BAnz AT 02.09.2026 B1, Announcement, pp. 1–19 (official reference: BAnz AT 02.09.2026 B1).