Subsidy District Heat (BAFA – District Heat Grids 4.0)

Updated: 11.01.2019

Author: Tim Sternkopf

The support scheme covers the cost both for feasibility studies for the implementation of such a district heating grid as well as the construction itself. Low-temperature district heating grids with a renewable share > 50 % are eligible for support. Several restrictions are set with regards to size (> 100 connected customers and > 3 GWh of heat per year) and cost efficiency (max. €ct 12 per kWh of heat).

Eligible technologies

The support covers the installation costs for an overall system and is therefore not restricted to certain technologies. 

Wind energy


Solar energy


Geothermal energy









The feasibility study is supported up to € 600,000 with a maximum of 60% of eligible costs covered.
The maximum amount of support is € 15 m. with up to 50% of eligible support of costs. The support rate is calculated as follows:
  • The basic support rate is 20% and 30% for SME. 
  • For each additional percentage point of renewable heat >50%, 0.2% support is granted. A district heating grid fed with 100% renewable heat therefore gets additional 10% of support
  • A cost efficiency premium up to 10% can be obtained if the 5-year heat contract price is lower than €ct 10 per kWh. The full 10% apply in case of a contract price of €ct 5 per kWh. 
In case of utilised innovative technologies, the total support rate can reach a maximum of 65% (75% for SME).


All type of municipalities, private companies, listed cooperatives and associations (also in form of a consortium between all types) can apply for support.


Process flow

The support of a feasibility study can be applied for until 31.12.2020 at BAFA. The support for the construction of district heating grid needs to be applied for until 31.12.2020 incl. the elaborated feasibility study. In case of a support approval by BAFA, the applicant is granted a 4-year period to finish constructions. Cost-efficiency needs to be proven in the first 5 years of operation and overall sustainability needs to be proven within a timeframe of 10 years.

Competent authority


Distribution of costs


The state via BAFA bears the costs.


Further information

Basic information on legal sources