Financing Models Take Center Stage at the Large-Scale Heat Pump Conference

June 11, 2026

Source: E & M powernews

At the opening of the Large-Scale Heat Pump Congress, BWP Board Member Claus Fest reiterated the association’s call for amendments to the Building Modernization Act (GMG).

The German Large-Scale Heat Pump Congress in Berlin highlighted the diverse applications of large-scale heat pumps—from apartment buildings and heating networks to the decarbonization of industrial processes. As the event’s organizer, the German Heat Pump Association (BWP) also used the occasion to reiterate its calls for amendments to the draft Building Modernization Act (GModG).

“The wide variety of applications for heat pumps must be strengthened,” said BWP Chairman Claus Fest in his opening remarks. Relying on renewable gases is not a reliable strategy for the heating transition, given their uncertain availability. Instead, Fest argued, the focus must be placed more strongly on electrification. To achieve this, however, the GModG, among other things, must be urgently revised. Fest criticized the planned GModG as a “step backward” for the BWP.

The BWP is particularly critical of the planned reduction in requirements for the use of renewable energy in new heating systems. While the GEG currently stipulates a 65 percent share of renewable energy, the draft bill lowers the requirement to just 10 percent. The BWP also sees a need for improvements in the regulations governing hybrid heat pumps. According to Fest, it must be clearly stipulated that the heat pump in such a hybrid system must make a “significant contribution.” He also called for the removal of bureaucratic hurdles to the use of heat pump technology.

Financing as a Key Challenge

The congress focused on applications of large-scale heat pumps in industry, neighborhoods, district heating networks, and non-residential buildings. Another key focus was on financing models and the economic viability of large-scale systems. Susanne Schmelcher of the German Energy Agency (Dena) emphasized that a significant financing gap still exists when it comes to funding the heat transition. This affects municipalities and municipal utilities in particular. Since a large portion of Germany’s heat supply is provided by public utilities, this funding gap has a direct impact on the implementation of the heat transition.

According to Schmelcher, fossil fuels remain dominant, particularly in existing buildings. More than 70 percent of residential units in Germany are still heated with gas or oil. In new construction, however, heat pumps are the most commonly chosen heating technology. In addition, many district heating networks will need to be converted to renewable energy sources in the coming years.

To strengthen the investment capacity of municipal utilities, Dena recommends the use of financing instruments that affect equity. As examples, Schmelcher cited subordinated government-guaranteed loans, mezzanine capital, and public investment funds. Dena also plans to conduct annual monitoring to systematically assess the impact of such instruments at the federal and municipal levels.

Contracting Is Gaining Importance

Contracting represents another financing option. This form of financing was a key topic at the Large-Scale Heat Pump Congress. “Contracting is a key factor in the heating transition,” said Ivo Kirschner of Getec, for example. Together with his colleague Daniel Hein, he explained the model using several practical examples. Heating projects are complex and must be planned holistically. Contractors often have the necessary project experience, human resources, and financial capacity to implement such projects.

In addition, Kirschner explained, the contractor assumes a large portion of the project risks. This can make it easier to implement transformation projects, particularly for municipalities and municipal utilities.

Author: Heidi Roider