The Heating Law Is History: What the GModG Changes
The Building Energy Act (GEG), colloquially known as Germany’s “heating law”, provoked more debate, uncertainty and political conflict after its passage in September 2023 than almost any other piece of legislation in recent decades. Since 29 July 2026, the Building Modernization Act (Gebäudemodernisierungsgesetz, GModG) has applied. It amends and renames the GEG and deletes its controversial heating provisions.
For property owners, homeowner associations (HOAs, known in Germany as WEGs) and property managers, this means: the 65% renewables mandate for heating replacements is gone. New gas and oil heating systems face a “Bio-Staircase” with phased requirements from 2029, and BEG subsidies continue. In this article, we explain the key changes, assess their practical impact and outline what HOA managers and owners in the Rhine-Main region should do now.
As a professional HOA management company in the Rhine-Main region, we guide homeowner communities through complex modernization projects and advise on subsidies, resolution procedures, and implementation planning.
Looking Back: The GEG and the 65% Rule
The amended Building Energy Act entered into force on January 1, 2024. Its centerpiece was Section 71 GEG: every newly installed heating system was henceforth required to generate at least 65% of its heat from renewable sources. In practice, this meant that property owners replacing their heating system were largely limited to a heat pump, a district heating connection, or a biomass boiler – installing a new gas or oil boiler was only permissible under significant restrictions and conditions.
Implementation was tied to municipal heat planning: cities with more than 100,000 inhabitants were required to present a heat plan by June 30, 2026; smaller municipalities by June 30, 2028. The full obligation would only kick in once the heat plan was published, with transitional periods applying in the meantime.
Criticism was intense from the outset:
From Key Points to Law
The CDU/CSU and SPD coalition agreed to reform the heating law fundamentally. The path to the Federal Law Gazette:
The guiding principles of the key points are reflected in the act: technology neutrality, a phased path for fossil fuels, decoupling from municipal heat planning and continued BEG funding.
The Most Important Changes at a Glance
65% Renewables Mandate Dropped
The single most consequential change in the GModG: the 65% renewables mandate for heating replacements under Section 71 GEG has been deleted since 29 July 2026, together with Sections 71b to 72. Owners no longer have to install a heating system that draws at least 65% of its heat from renewable sources.
In concrete terms: installing a new gas boiler or oil boiler is permitted again. From 2029, however, these systems must meet gradually increasing bio-fuel shares (see next section).
For property owners who were unsettled by the GEG requirements, the GModG brings more room for manoeuvre.
The “Bio-Staircase”: Gradual Increase from 2029
Instead of the 65% mandate, Section 43 GModG introduces a gradually rising requirement for the share of biogenic fuels or hydrogen, the so-called “Bio-Staircase” (Bio-Treppe). It applies to newly installed gas and oil heating systems:
| From | Minimum share of biogenic fuels or hydrogen |
|---|---|
| 2029 | 10% |
| 2030 | 15% |
| 2035 | 30% |
| 2040 | 60% |
Hybrid systems combining a heat pump, solar thermal or biomass with gas or oil can meet the requirement until 2035 under certain conditions. From 2035, a qualified person must confirm the renewable share. A new tenant-protection rule splits the operating costs of a newly installed gas or oil heating system between tenant and landlord via the CO2 Cost Allocation Act.
The Bio-Staircase offers key advantages over the previous instant 65% mandate:
Municipal Heat Planning Decoupled
Another pivotal change: municipal heat planning is now decoupled from heating replacements. Until July 2026, the GEG’s 65% mandate was tied to the existence of a municipal heat plan. In practice, this led to a paradoxical situation: owners who wanted to replace their heating had to wait for a heat plan that many municipalities had not yet published.
Under the GModG, owners can replace or modernize their heating system regardless of whether their municipality has published a heat plan. The deadlines of the Heat Planning Act remain:
Going forward, the heat plan serves as a guide for orientation – indicating which heat sources and infrastructure will prospectively be available in a given area. However, under the GModG it no longer has any legally binding effect on individual heating replacement decisions.
Technology Neutrality Strengthened
The GModG explicitly embraces the principle of technology neutrality. This means the federal government does not prescribe any specific heating technology. All of the following options are, in principle, permissible under the GModG:
This technology neutrality was a central demand of the CDU/CSU in the coalition agreement and represents a departure from the de facto heat pump mandate of the previous GEG.
What Applies to New and Existing Systems?
Legal Position Since 29 July 2026
Heating systems installed since 29 July 2026 are governed by the GModG. The 65% requirement and the transition periods after a heating breakdown under the former GEG (Section 71i) were deleted together with Sections 71b to 72. Anyone installing a new gas or oil system after a breakdown must comply with the Bio-Staircase from 2029.
> Important: For systems installed before 29 July 2026 and for deadlines that started under the old law, the transitional provisions in each individual case are decisive. We check this for every system before the owners’ meeting decides.
Grandfathering for Existing Systems
Functioning heating systems do not have to be replaced early. With Section 72, the former operating ban for old boilers has also been deleted. The GModG obligations apply when a new heating system is installed, whether after a breakdown, as part of a modernization or voluntarily.
Federal Subsidies (BEG): What Stays, What Changes?
The Federal Funding for Efficient Buildings (BEG) program is the German government’s flagship subsidy scheme for energy-efficient building renovations and heating replacements. In the GModG key points, the federal government announced that BEG funding will continue until at least 2029.
Current Rates at a Glance
New conditions have applied in KfW programme 458 (heating subsidy) since 21 July 2026:
| Component | Rate |
|---|---|
| Base subsidy | 30% |
| Climate speed bonus (owner-occupied unit, replacing an old fossil system) | 16%, falling by 4 percentage points every six months from 1 February 2027, no longer available for applications from 1 August 2028 |
| Income bonus (owner-occupiers) | 40% up to EUR 30,000, 30% up to EUR 40,000, 10% up to EUR 50,000 taxable household income |
| Maximum rate | 70%, up to 80% for low incomes |
Eligible costs are capped at EUR 28,000 for the first residential unit, EUR 15,000 each for units two to six and EUR 8,000 from the seventh unit. The cap for the first unit falls by EUR 750 every six months from 1 February 2027. Insulation, windows and doors are funded through the BAFA individual measures with their own rates.
Application Process and Deadlines
Applications are submitted via KfW (for heating replacements) or BAFA (for individual measures on the building envelope). Important: the application must be submitted before work begins. Retroactive funding is only possible in exceptional cases (e.g. emergency heating breakdowns).
Special rules on application eligibility apply to HOA communities: as a rule, the property management company submits the subsidy application on behalf of the HOA. A resolution by the owners’ meeting must underpin the application.
For further information, see our articles on financing energy renovations in HOAs and the heating cost surge and its impact on property owners.
HOAs (WEG) and Heating Replacement: The Special Challenge
Replacing the heating system in a homeowner association poses a unique challenge because the decision cannot be made by an individual owner – it must be resolved and financed by the community of apartment owners as a whole. The GModG does not alter the underlying condominium law framework; decision-making continues to be governed by the Condominium Act (WEG).
Decision-Making Under Section 20 WEG
Since the WEG reform of 2020, structural alterations – including the replacement of a heating system – can generally be approved by a simple majority (majority of votes cast) under Section 20(1) WEG. This provision has significantly simplified the decision-making process for modernization measures.
However, heating projects regularly raise the cost allocation question: who bears the modernization costs? As a general rule, all owners participate in the costs in proportion to their co-ownership share. For particularly cost-intensive measures, however, an individual owner may argue that the costs are disproportionate and cannot reasonably be imposed on them.
Ongoing Projects: Review or Continue?
For HOAs that already have ongoing heating projects – meaning resolutions have been passed, planning has been commissioned, or subsidy applications have been filed – the question now arises: continue as planned or reassess?
The answer depends on the individual circumstances:
Financing Options
Financing a heating replacement in an HOA community typically involves one or more of the following mechanisms:
Detailed information on financing can be found in our article on energy renovation in existing HOA buildings.
What Heating Options Do Owners Have Now?
The GModG opens up a wide range of heating options for property owners. Below, we assess the most important technologies with a focus on HOA communities and existing buildings in the Rhine-Main region.
Heat Pumps
The heat pump remains the most climate-friendly heating technology even under the GModG and benefits from the highest BEG subsidy (up to 70%). Air-to-water heat pumps in particular have undergone significant technical improvements in recent years and are now suitable for existing buildings with radiators (flow temperatures up to 55 °C).
Advantages: Highest subsidy rates, low operating costs, future-proof, no Bio-Staircase requirement.
Disadvantages: High upfront investment, structural requirements (installation space, noise protection), potentially reduced efficiency in unrenovated older buildings.
District Heating
In metropolitan areas like the Rhine-Main region, a district heating connection is an attractive option where a district heating network is available or expansion is planned. Municipal heat planning provides information on which areas will have access to district heating in the future.
Advantages: No on-site boiler required, low maintenance effort, generous subsidy, future-proof.
Disadvantages: Availability depends on local infrastructure, long-term contractual commitment, connection charges.
Hybrid Systems
Hybrid heating systems – typically a combination of a gas condensing boiler and a heat pump – are a particularly attractive option under the GModG. They can meet the Bio-Staircase until 2035 under certain conditions and offer high supply security: when the heat pump loses efficiency during extreme cold spells, the gas boiler takes over.
Advantages: Lower investment cost than a standalone heat pump, high supply security, Bio-Staircase easily met, good subsidy rates.
Disadvantages: Two systems with corresponding maintenance requirements, still partially fossil.
Pellet and Biomass Boilers
Pellet boilers and other biomass systems use renewable raw materials and fully satisfy the GModG requirements (100% renewable). They are particularly suitable for buildings where a heat pump would not be economically viable.
Advantages: 100% renewable, generous subsidy, suitable even for poorly insulated buildings, no Bio-Staircase requirement.
Disadvantages: Significant storage space required for pellets, particulate emissions, volatile pellet prices, regular ash disposal.
Hydrogen-Ready Gas Boilers: A Critical Assessment
Some manufacturers market so-called “hydrogen-ready” gas boilers as a future-proof solution: systems that currently run on natural gas but can technically be converted to 100% hydrogen. The GModG does not exclude this technology.
However, considerable caution is warranted: the availability of green hydrogen for residential heating is not assured in most regions of Germany for the foreseeable future. The overwhelming consensus among energy experts and industry associations is that hydrogen will primarily be deployed in industry and heavy transport, and will remain too expensive and inefficient for decentralized residential heating. Property owners who choose a hydrogen-ready gas boiler bear the risk that hydrogen may never become available in their area.
> Practical tip: Wait for your municipality’s heat plan before committing to a specific heating technology. The heat plan indicates which energy sources and infrastructure will be available in your area going forward – and helps protect against costly wrong turns.
Municipal Heat Planning in the Rhine-Main Region
Municipal heat planning continues to play an important role under the GModG – albeit as a guide for orientation, not as a legal prerequisite. For property owners in the Rhine-Main region, the current status of heat planning in the area’s largest cities is of particular relevance.
Frankfurt: Mainova District Heating Expansion
The City of Frankfurt am Main is working on its municipal heat plan, which is due by June 2026. The local energy utility Mainova has announced a major expansion of its district heating network: new district heating connections are to be made available particularly in the districts of Bockenheim, Sachsenhausen, and the Europaviertel. The Fraunhofer IFAM is supporting the city in preparing its heat plan and is investigating, among other things, the potential of large-scale heat pumps and waste heat from data centers across the Frankfurt metropolitan area.
Wiesbaden: Geothermal Potential
Wiesbaden benefits from significant geothermal potential thanks to its geological setting. The city is examining the use of thermal springs and deep geothermal energy for building heating as part of its heat planning process. The findings are to feed into the municipal heat plan, which is also due by June 2026.
Darmstadt: Heat Plan Already Presented
The City of Darmstadt presented its municipal heat plan in January 2026, making it one of the frontrunners in Hesse. The plan envisions a substantial expansion of district heating, particularly in the area around TU Darmstadt and in the residential districts of Bessungen and Eberstadt. In addition, neighborhood-level concepts with decentralized heat pump solutions are being pursued.
Mainz: Deadline June 2026
Mainz, as a large city, is also required to submit a municipal heat plan by June 2026. The city is collaborating with Mainzer Stadtwerke AG on a concept that combines district heating, geothermal energy, and decentralized solutions. Property owners in Mainz are well advised to await the publication of the heat plan before making far-reaching investment decisions.
Practical Recommendations: What HOA Managers Should Do Now
The GModG gives HOA managers an opportunity to strategically reassess heating projects and proactively inform owners. We recommend the following five steps:
Conclusion: More Flexibility, but No All-Clear
The Building Modernization Act (GModG) brings tangible relief for property owners and HOA communities: the controversial 65% renewables mandate is gone, the Bio-Staircase offers a predictable transition path, and BEG subsidies continue. Technology neutrality gives owners the freedom to choose the best solution for their building.
At the same time: heating remains firmly on the agenda. The Bio-Staircase ensures that fossil heating systems will have to transition to renewable fuels over time. The graduated increase in bio-fuel shares means that anyone installing a new fossil boiler today must secure a substantial bio-fuel component by 2040. Moreover, the current subsidy landscape makes it financially attractive to switch to renewable heating systems now – owners who take advantage of the subsidies can recoup up to 70% of their investment costs.
For HOA communities, it is advisable to carry out a system audit now, inform owners and, where appropriate, commission an energy consultation.
As an HOA management company, we support homeowner communities across the Rhine-Main region throughout the entire process – from initial audits through resolution procedures to implementation and subsidy administration. Contact us for individual advice on your heating project.
*As of: October 2026 (first published March 2026). This article is intended for general informational purposes and does not constitute individual legal, tax, or energy advice.*
