LEVONOVA ENERGY
Commercial Heat Pump Funding
Businesses can benefit significantly from government grants for commercial heat pumps. Whether for production halls, office buildings, or commercial properties: a modern heat pump reduces energy costs, CO₂ emissions, and dependence on fossil fuels.
Overview: Funding Options for Commercial Heat Pumps
1. Heat Pumps for Building Heating — KfW (Program 522)
- Type of funding: Direct investment grant of up to 35% of eligible costs
- Target group: Businesses with non-residential buildings (e.g. offices, hotels, production facilities)
- Eligible systems: Air-source, ground-source, and water-to-water heat pumps, as well as hybrid systems
- Requirement: Application must be submitted before project start via the KfW grant portal
- Special feature: Can be combined with additional energy efficiency measures in the building
2. Heat Pumps for Process Heat — BAFA (EEW Module 2)
- Type of funding: Grant of up to 60% of investment costs (scaled by business size)
- Target group: Businesses with process heat requirements (e.g. manufacturing, food production, chemicals)
- Eligible measures: New installations or retrofits to heat pump systems, including metering and control technology
- Requirement: At least 50% of generated energy must be used for process heat
- Special feature: Planning, project engineering, and professional consulting are also eligible
Combinability and Tax Benefits
- KfW 522 and BAFA EEW cannot be combined for the same project
- Combinable with tax depreciation (AfA / special depreciation)
- Additional state-level programs available in e.g. NRW, Bavaria, Baden-Württemberg
- Optional combination with PV systems or battery storage for self-consumption
- Result: Lower operating costs and greater overall economic viability
KfW 522 — Heating Funding for Businesses (Non-Residential Buildings)
What is funded?
Funding covers the replacement or retrofit of an existing heating system with climate-friendly heat generation based on renewable energy — in particular modern heat pump systems that draw on ambient energy from air, ground, water, or wastewater.
The funding covers not only the heat pump itself but also all required ancillary measures that are technically necessary to make the system operational and efficient, including:
- Planning, system design, and technical concepts
- Installation, assembly, and commissioning
- Adaptation of the heat distribution system
- Hydraulic balancing
- Metering, control, and regulation technology (MCR)
How much funding does KfW 522 provide?
KfW Program 522 provides an investment grant of 30% of eligible costs for the installation or replacement of a heat pump in an existing non-residential building. If the system operates with natural refrigerants or uses ground, water, or wastewater as the heat source, the grant rate increases by 5 percentage points to 35% — the maximum available under this program. The grant amount is calculated exclusively on the basis of actual eligible investment costs, including planning, installation, and technical ancillary measures. Payment is made after completion of the measures and successful documentation review by KfW.
Important: funding is subject to the availability of federal budget funds. There is no legal entitlement to payment.
Application process
Requirements and conditions
All eligible costs at a glance
Eligible costs include all expenses directly related to the heating modernization, including:
- Purchase and installation of the heat pump
- Adaptation of the heating and distribution system
- Storage units, pumps, pipework, and control technology
- Planning and specialist contractor services
- Hydraulic balancing
- Technical monitoring or efficiency verification where required
Why KfW funding is worthwhile
Common mistakes when applying for heat pump funding
Many businesses miss out on substantial grants due to formal errors. The most frequent mistakes are:
- Application submitted after contracts have been awarded (this automatically disqualifies the project)
- Missing or incomplete specialist contractor declaration
- Unsubstantiated efficiency values (JAZ/SCOP)
- Missing documentation for ancillary costs (planning, adaptation, control technology)
BAFA — Energy Efficiency in Industry (EEW) Module 2
Funding for Heat Pumps for Process Heat Generation
While KfW 522 focuses on building heating, the BAFA “Energy Efficiency in Industry” (EEW) program concentrates on heat generation for industrial and commercial processes. Businesses switching their production or service processes to climate-friendly alternatives can access the most attractive grants here.
At the center is Module 2 (Process Heat from Renewable Energy), specifically designed for heat pumps, solar thermal systems, biomass plants, and other renewable technologies. This program is considered one of the key funding instruments for the decarbonization of energy-intensive businesses in Germany.
What is funded?
Funding covers the construction, expansion, or retrofit of systems that generate process heat using renewable energy sources. For heat pumps, this means systems that use ambient energy from air, ground, water, or waste heat to supply heat to industrial or commercial processes.
Typical applications include:
- Heating and drying in production
- Cleaning, washing, or sterilization processes
- Food heating, pasteurization, or fermentation
- Electroplating, coating, and surface treatment processes
- Heating of process baths, tanks, or ventilation systems
Hybrid systems combining a heat pump with another renewable source (e.g. solar thermal or biomass) are also eligible, provided the share of renewable energy exceeds 50%.
Grant amount and rate
The grant level is determined by business size according to the EU SME definition:
| Business Size | Grant Rate on Eligible Costs |
|---|---|
| Small Businesses (< 50 employees, < €10M turnover) |
up to 60% |
| Medium-Sized Businesses (< 250 employees, < €50M turnover) |
up to 50% |
| Large Businesses (250+ employees or €50M+ turnover) |
up to 40% |
Eligible costs for a commercial heat pump
BAFA defines eligible investment costs very broadly. This includes not only the heat pump itself but all technically necessary components and services:
- Purchase, assembly, and commissioning of the heat pump
- Heat source development (e.g. boreholes, wells, heat exchangers, waste heat integration)
- Storage units, pumps, pipework, and distribution
- Metering, control, and regulation technology (MCR)
- Thermal storage, sensors, and monitoring systems
- Planning and project engineering costs (proportional)
- Foundation work and connection work where required
Module 2 therefore covers the entire technical project scope, from system design through integration to monitoring.
Requirements and technical conditions
To be eligible, the system must meet the following criteria:
- More than 50% process heat share: The majority of the generated energy must be used directly for industrial or commercial processes.
- Renewable energy source: The heat must be generated using renewable energy (e.g. ambient heat, solar energy, or biomass).
- Efficiency requirements: The system must meet defined minimum efficiency standards set out in the BAFA program guidelines.
- Professional installation: Planning and implementation must be carried out by qualified specialist contractors.
- Documentation obligations: Detailed technical documentation, energy balances, and where applicable measurement logs must be submitted as part of the proof of use.
Application process
The application must be submitted before work begins. After submission, BAFA reviews technical eligibility and completeness of documentation.
The process in practice:
- Pre-assessment and project outline — determining the process heat share and preparing an economic viability calculation.
- Application — uploading the project description, quotes, and energy balances.
- Funding commitment — after a positive review, BAFA issues the grant approval.
- Implementation — carried out by specialist contractors within the approved period.
- Proof of use and payment — invoices and documentation are submitted after project completion; the grant is then disbursed.
The full process may take between 3 and 9 months depending on complexity.
Combinability and limits
Why Module 2 is particularly worthwhile
Energy-intensive businesses in particular benefit disproportionately from this funding. Heat pumps not only reduce energy costs and CO₂ emissions, but also improve supply security through electrification. With grants of up to 60%, even complex process heat projects become economically attractive.
A medium-sized business with investment costs of €500,000 can receive between €200,000 and €300,000 in funding depending on company size. This typically means the system pays back within just a few years, with operating costs reduced permanently.
Combining with Tax Benefits and Regional Grants
Tax Depreciation (AfA)
Heat pumps qualify as movable fixed assets and can be claimed as a tax-deductible depreciation (AfA). This means businesses may offset the acquisition and installation costs against profits over the asset’s useful life, reducing the tax burden and therefore the effective investment cost.
Key points:
- Standard useful life: typically 10 to 15 years depending on system type and application
- Straight-line depreciation: equal annual write-offs on acquisition costs
- Special depreciation (§ 7g EStG): small and medium-sized businesses can, under certain conditions, additionally write off up to 20% of the investment in the year of acquisition
- Combinability: tax depreciation can be claimed in addition to government grants — however, only the portion of costs remaining after deducting the grant is eligible for depreciation
Example: A heat pump system costs €200,000. KfW 522 grant at 35% = €70,000. Remaining investment: €130,000. This €130,000 can then be depreciated via AfA, significantly reducing the tax burden over several years.
Regional State Grants for Commercial Heat Pumps
In addition to federal programs, a wide range of state-level grant programs exist that can be applied for on top. Combination with federal programs is often possible — but subject to conditions and restrictions.
North Rhine-Westphalia (NRW)
Eligible measures:
Near-surface geothermal systems (ground heat probes, earth collectors, well boreholes) in combination with a heat pump; thermal solar systems for building heat supply; control systems for heat pumps combined with PV; systems using waste heat or heat conversion (e.g. process heat) where heat is fed into a network.
Grant amount:
Generally 25% of eligible costs, max. €1,500 per system for certain heat pump costs. For boreholes (geothermal): €50 per meter in existing buildings, €35/m in new builds. For earth collectors: €35/m² in existing buildings, €15/m² in new builds. Funding cap: €12,000 for existing buildings, €8,000 for new builds.
Combinability:
Combination with federal funding (e.g. BEG / KfW / BAFA) is possible up to a maximum total funding rate of 60%, provided costs are separated by component. The same cost item may not receive two grants.
Example:
NRW significantly increased its borehole grant — from €10/m previously to now €50/m for existing buildings (€35/m for new builds), substantially reducing the development costs of geothermal heat pump projects.
Saxony
Eligible measures:
Heat pumps, thermal storage, and renewable heat generation within the SAB loan “Energy and Storage”; new builds and modernizations combining heat pumps with PV or storage; municipal heat pump projects under the Energy/2023 guideline.
Grant amount:
Repayment grant of 10% on the eligible loan amount (up to 20% for storage systems). Loan range from €35,000 to €5 million per project. For municipal projects, additional grants of up to 50% via EU or state funds.
Combinability:
Combination with the Federal Funding for Efficient Buildings (BEG) is possible if costs are treated separately (e.g. building envelope funded at federal level, heat pump at state level). Double funding of the same cost item is not permitted.
Example:
A commercial business in Dresden installs a geothermal heat pump and electricity storage. Via SAB, it receives a low-interest loan with a 10% repayment grant, in addition to BEG funding for the heat pump.
Hamburg
Eligible measures:
Heat pumps including ancillary measures, thermal solar systems, combined use of surfaces for geothermal/PVT/solar thermal, control systems for heat pumps in conjunction with PV.
Grant amount:
Generally 20% of eligible investment costs; maximum e.g. €100,000 per non-residential building or €9,000 per residential unit/single-family house.
Combinability:
Combination with federal funding (e.g. BEG) is possible; total funding rate can rise to approximately 50% or more where cost components are treated separately.
Example:
A business in Hamburg equips its commercial premises with a heat pump and receives a state grant of up to 20% of investment costs (max. €100,000). Combined with BEG, the total funding rate approaches 50%.
Hesse
Eligible measures:
Heat pumps and efficiency measures in commercial or public buildings via programs such as PIUS-Invest (for SMEs) or WIBank energy efficiency loans; CO₂ reduction and waste heat recovery projects; municipal facilities under the “Climate Protection in Municipalities” program.
Grant amount:
PIUS-Invest provides grants of up to €500,000 per project depending on CO₂ savings achieved. WIBank loans offer subsidized interest rates with partial repayment grants of up to 20%.
Combinability:
State funding can be combined with federal BEG programs provided there is no overlap of the same cost items. Businesses can, for example, finance the investment via a state loan while simultaneously claiming the federal grant.
Example:
A metalworking company replaces its oil heating with a heat pump, reducing CO₂ emissions. Via PIUS-Invest it receives a grant for the savings achieved, while also using BEG funding for the heat pump technology.
Saxony-Anhalt
Eligible measures:
- Building renovation including heating replacement with a heat pump
- Use of renewable heat generation technologies
- Technical systems for efficiency improvement and CO₂ reduction, including heat supply (explicitly listed under the Saxony-Anhalt ENERGIE funding program)
Grant amount:
- Small businesses: up to 50% of eligible costs
- Medium-sized businesses: up to 35%
- Large businesses: up to 20%
- Maximum: €300,000 (under De minimis rules) or €1 million under AGVO
Combinability:
- The same cost items may not simultaneously receive federal funding (double funding prohibition)
- However, different measures (e.g. heat pump vs. insulation) can be funded separately, thereby increasing the total funding rate, as long as costs are cleanly separated
- The prohibition on double payments is explicitly stated in the program guidelines
Example: A small manufacturing company wants to replace its gas heating in its production hall with a heat pump while also insulating the building envelope. Up to 50% grant from Saxony-Anhalt ENERGIE may apply to the heat pump; a separate grant may cover the insulation if invoiced separately. The same cost item cannot be funded twice.
Bavaria
Eligible measures:
- Heat pumps in business operations and buildings, thermal solar systems, components combined with PV or efficiency technologies; open to businesses of all sizes
Grant amount:
- Up to 50% of eligible costs for businesses under certain programs (“Energy Efficiency and Renewable Energy in Businesses”), or subsidized loans in lieu of outright grants. Maximum amounts vary.
Combinability:
- Combination with federal funding is possible provided cost components are separated; e.g. state loan combined with BEG or BAFA
Example: A medium-sized business in Bavaria replaces its old heating system with a heat pump and can receive up to 50% from the state program plus additional federal grant funding.
Brandenburg
Eligible measures:
- Energy modernization and efficiency improvements under the Brandenburg Energy Efficiency program (ILB)
- Eligible measures include process heat systems, heat recovery systems, and metering and control technology
- Building heat (heating replacement with heat pump) is currently covered by federal funding rather than directly by the state program
Grant amount:
- Small businesses: up to 27.5%
- Medium-sized businesses: up to 22.5%
- Large businesses: up to 15%
- Minimum investment: €50,000; grant capped at €1,200 per tonne of CO₂ saved annually
Combinability:
- Combination with federal funding is possible provided measures cover different cost components (e.g. process heat funded at state level, building heating at federal level)
- No double funding of the same measure permitted
Example: A food producer in Potsdam partially replaces its old steam generation with a process heat pump. Brandenburg covers 27.5% of the efficiency measure, while the heat pump technology itself is funded via BEG.
Bremen
Eligible measures:
- Heat pump heating replacement via the Bremen Heating Replacement state program (previously active until 31 August 2025)
- Eligible were heat pumps, solar thermal systems, hybrid heating systems, and control systems
- Target groups: private individuals, businesses, and municipal facilities
Grant amount:
- State grant of up to 30% of investment costs as a supplement to federal BEG funding
- In combination with the federal grant, a total funding rate of up to 60% was achievable
- The program is currently closed; existing applications are still being processed
Combinability:
- The program was explicitly designed as a top-up to BEG funding
- Double funding of the same costs was excluded; state funds served as supplementary funding
Example: A small business in Bremen replaced its gas heating with a heat pump in 2025. Via BEG it received a 30% grant, and via the state of Bremen a further 30% — 60% of total costs funded in all. (New applications are currently no longer possible.)
Baden-Württemberg
Eligible measures:
- Heat pumps as part of energy renovations or new builds via the L-Bank SME Combination Loan
- Combination with PV systems and energy management systems
- Efficiency measures in business buildings (e.g. heating replacement, building services, ventilation, storage solutions)
Grant amount:
- Subsidized loan (up to €25 million) combined with a repayment grant (Climate Premium) when a federal program (e.g. BAFA) is also used
- The Climate Premium is typically 5–10% of eligible costs, in addition to the interest subsidy
Combinability:
- Combination with federal funding is explicitly envisaged and is a prerequisite for the repayment grant
- Separation of cost items is essential to avoid double funding
Example: A medium-sized business in Stuttgart replaces its gas heating with a heat pump connected to a PV system. It uses BAFA/BEG grants and finances the remainder via the L-Bank SME Combination Loan with an additional Climate Premium, significantly increasing the total funding.
Lower Saxony
Eligible measures:
- Heat pumps and other climate-friendly heating systems in business buildings
- Process heat efficiency measures via NBank Climate Protection and Energy Efficiency programs
- Municipal heat pumps via the KEP program
Grant amount:
- Businesses: grants of generally 20–30% of eligible investment costs depending on the program
- Municipalities: up to 40% for building-related measures (e.g. heating replacement, heat pumps, heat networks)
Combinability:
- Combination with federal funding is possible provided costs are invoiced separately
- For businesses, the state grant can serve as supplementary funding alongside BEG programs, e.g. for infrastructure or control systems
Example: A logistics company installs an air-to-water heat pump for hall heating. Via NBank it receives a 25% grant for building services and combines this with the BEG grant for the heat pump itself.
Rhineland-Palatinate
Eligible measures:
- Heat pumps in public buildings via the ZukunftsEnergieProgramm (ZEP Kommunal)
- Energy efficiency measures in municipal buildings (e.g. schools, town halls, fire stations)
- Low-interest SIKB loans available for private-sector businesses for energy modernization including heat pumps
Grant amount:
- Municipalities: grants of up to 50% of eligible costs depending on the measure and the municipality’s financial capacity
- Businesses: subsidized loans with a typical interest advantage of 1–2% compared to market rates
Combinability:
- Combination with federal programs (e.g. BEG or KfW) is possible provided no double funding of the same costs occurs
- For municipal projects, co-financing alongside federal funding is the standard approach to achieving a higher overall funding rate
Example: A municipality replaces the old oil heating in a school with a heat pump. Via ZEP Kommunal it receives a 50% grant and combines this with BEG funding for public buildings.
Mecklenburg-Vorpommern
Eligible measures:
- Heat pumps in public buildings via the ZukunftsEnergieProgramm (ZEP Kommunal)
- Energy efficiency measures in municipal buildings (e.g. schools, town halls, fire stations)
- Low-interest loans available for private-sector businesses for energy modernization including heat pumps
Grant amount:
- Municipalities: grants of up to 50% of eligible costs depending on the measure and financial capacity
- Businesses: subsidized loans with a typical interest advantage of 1–2% compared to market rates
Combinability:
- Combination with federal programs (e.g. BEG or KfW) is possible provided no double funding of the same costs occurs
- Co-financing alongside federal funding is the standard model for municipal projects
Example: A municipality replaces the old oil heating in a public building with a heat pump. Via ZEP Kommunal it receives a 50% grant and combines this with BEG funding for public buildings.
Thuringia
Eligible measures:
- Heat pumps as part of energy renovations via Thüringer Aufbaubank (TAB) programs such as GreenInvest or Thüringen-Dynamik
- Municipal climate protection projects via the Klima-Invest program (e.g. heat pumps in schools and administrative buildings)
- The Decarbonization Bonus Thuringia introduced in 2024 (up to 40% grant) has currently expired
Grant amount:
- Businesses: subsidized loans at below-market interest rates, in some cases with repayment grants of 10–20%
- Municipalities: grants of up to 50% of eligible costs via Klima-Invest
Combinability:
- State loans can be combined with federal funding provided measures are clearly invoiced separately
- Double funding is not permitted; BEG remains the primary funding instrument for heat pumps
Example: A metalworking company in Erfurt installs an air-to-water heat pump and uses the GreenInvest loan for subsidized financing. The heat pump itself is additionally funded via BEG, resulting in a total funding rate of approximately 40–50%.
Berlin
Eligible measures:
- Replacement of outdated heating systems with heat pumps via the IBB “Effiziente GebäudePLUS” program
- Optimization of heating systems, integration of thermal storage and control systems combinable with PV
- Open to businesses, housing companies, landlords, and municipal facilities
Grant amount:
- Grants of up to €500,000 per project, maximum 30% of eligible costs
- Different cost ceilings apply depending on the measure (e.g. for heat generators, control systems, or insulation)
- Larger projects may be subject to a tiered structure based on energy-saving potential
Combinability:
- Combination with federal BEG funding is generally possible provided cost items are documented separately
- Double funding of the same expenditure is excluded
- Combination with low-interest IBB loans is permitted
Example: A business in Berlin renovates an office building and replaces its gas heating with a heat pump coupled with a PV system. Via Effiziente GebäudePLUS it receives a 30% grant; additionally, the heat pump can be funded via BEG.
Schleswig-Holstein
Eligible measures:
- Heat pumps and energy renovations in non-residential buildings via IB.SH programs ImmoFlex and Immo-Effizienzhaus
- Investments in renewable heat generation, building services, insulation, and control systems
- Open to housing companies and businesses alike
Grant amount:
- Subsidized loans (in some cases with repayment grants) up to several million euros depending on project size and energy savings
- Repayment grants of up to 20% of eligible costs are possible when high efficiency standards are achieved
Combinability:
- Combination with federal BEG funding is possible provided eligible costs are clearly separated
- IB.SH recognizes BEG grants as equity, enabling larger projects to be realized
Example: A hotel in Kiel modernizes its heating system and installs an air-to-water heat pump with thermal storage. It receives a subsidized IB.SH loan with a 20% repayment grant and additionally a BEG grant for the heat pump itself.
Saarland
Eligible measures:
- Heat pumps in public buildings via the ZukunftsEnergieProgramm (ZEP Kommunal)
- Energy efficiency measures in municipal buildings (e.g. schools, town halls, fire stations)
- Low-interest SIKB loans available for private-sector businesses for energy modernization including heat pumps
Grant amount:
- Municipalities: grants of up to 50% of eligible costs depending on the measure and financial capacity
- Businesses: subsidized loans via the Saarländische Investitionskreditbank (SIKB) with a typical interest advantage of 1–2% compared to market rates
Combinability:
- Combination with federal programs (e.g. BEG or KfW) is possible provided no double funding of the same costs occurs
- Co-financing alongside federal funding is the standard model for municipal projects
Example: A municipality in the Saarland replaces the old oil heating in a school building with a heat pump. Via ZEP Kommunal it receives a 50% grant and combines this with BEG funding for public buildings.
With LEVONOVA ENERGY to Your Commercial Heat Pump Funding
You want to switch your commercial property to a heat pump but you have better things to do than work your way through forms, guidelines, and funding conditions? Then schedule a free analysis session with our experts.
LEVONOVA ENERGY manages the entire process: from initial assessment and grant application through to technical implementation. Our experts review your project, guarantee you the maximum available funding, and take care of every technical, organizational, and administrative task.
While you focus on your core business, we handle everything: planning, funding management, financing, project management, and implementation. No effort on your part and more importantly: no headaches!
Simply fill out the form and arrange a no-obligation initial consultation. We’ll show you exactly how much funding you can receive and then make it happen for you.