Heat pump, district heating or pellets? What the Renewable Heat Act requires, what the federal grant paid in 2026, what applies from 2 November 2026, and the costliest pitfalls.
Spittelau district heating plant, Vienna, October 2009.
Photo: Joadl, CC BY-SA 3.0, cropped
The old gas boiler still works, the oil furnace in the cellar has run faithfully for twenty years — and yet many households in Austria are asking themselves the same question in 2026: when is it worth switching, and to what? The answer is rarely simple, because it depends on where you live, the state of the building, the budget available and, not least, the pace of subsidy policy. This overview weighs up the three realistic options — heat pump, district heating and pellet boiler — explains the legal framework and names the pitfalls people most often stumble over in practice.
The legal framework: what already applies — and what's coming
Let's clear up a common misconception first: there is no blanket ban in Austria in 2026 that banishes working gas or oil heating systems from cellars overnight. The relevant federal law only covers new buildings. Where things have tightened is at the margins.
The Renewable Heat Act (Erneuerbare-Wärme-Gesetz, EWG), passed by the National Council on 15 December 2023, has been in force since 29 February 2024. It bans installing heating systems in new buildings that can run on fossil fuels, and connecting them to district heating that is not quality-assured (Erneuerbare-Wärme-Gesetz, BGBl. I No. 8/2024, section 3, RIS). It contains no obligation to replace existing systems. In existing buildings, policymakers use grants instead to push households away from fossil heating. Whether a like-for-like replacement with a new fossil-fuel unit is still permissible in an individual case depends on the applicable provincial and building regulations, and should be clarified in advance. The backdrop is the target of climate neutrality by 2040, which the 2025–2029 government programme also refers to (Government programme 2025–2029, Federal Chancellery, in German).
What matters in practice: on the finer points of implementation, federal law and the respective provincial and building regulations interlock, and the details vary from province to province. If you are unsure whether your own system is affected, the safest move is to check with your municipality or the relevant provincial office beforehand. Nor has the longer-term path for gas heating in existing buildings been politically settled; here it pays to watch how things develop rather than betting on a fixed end date.
The three options compared
The heat pump is the obvious choice for most detached houses. It works most efficiently when the house is well insulated and heated at low flow temperatures — ideally via underfloor heating or generously sized radiators. The 2026 federal grant was built around exactly that: it only funded a heat pump that needs a flow temperature of 55 °C at most, and only where no connection to local or district heating was possible (KPC, Sanierungsoffensive 2026 – Kesseltausch, November 2025, in German). In renovated buildings that is usually within reach; in unrenovated older stock, an honest upfront assessment is needed to check whether the system will deliver enough output on cold days without the electricity bill exploding. How a heat pump performs in older buildings, and what to watch out for, is covered in detail in our piece on heat pumps in older buildings.
District heating is the most convenient solution wherever a network runs down the street, which mostly means towns and cities. No boiler, no tank, no chimney, little maintenance: you simply draw heat from the network. The catch is availability. Whether a connection is possible is decided by location, not by preference. And the running costs depend heavily on the particular supplier and its tariff.
The pellet boiler is the classic route for households that want to stay with a water-based heating system running at higher flow temperatures — for instance in older buildings with traditional radiators, where a heat pump reaches its limits. In return, you need space for the store and the boiler, plus regular maintenance and ash removal. A central wood boiler, too, was only funded in 2026 where no connection to local or district heating was possible (KPC).
What it costs — purchase and running costs
When it comes to costs, purchase price and running costs must be considered separately, or you end up with a distorted picture.
Blanket price ranges for the purchase are of little use, because the price depends on the individual building: on the heating output required and on associated work such as new radiators, an upgraded electricity connection or removing the old tank. A reliable price only emerges after an on-site visit with a heat-load calculation. Whether a quote is fair can then be checked for free: the Austrian Energy Agency's cost check compares a quote for a new heating system with current average market prices, for the total and for individual components (Austrian Energy Agency, AEA-Kostencheck, accessed 18 October 2026, in German).
If you only look at the purchase price, you are comparing the wrong number. Over fifteen years, it is the running costs that help decide which system was cheaper in the end.
Running costs hinge on other factors: for a heat pump, its efficiency and the electricity tariff; for pellets, the fuel price; for district heating, the supplier's tariff, which should be checked directly with the supplier before deciding. A heat pump runs more economically the lower the flow temperature the house needs. Anyone who pairs it with a photovoltaic system and a battery can generate part of the electricity themselves; whether that adds up in an individual case is something we examine in our article on whether a solar battery pays off in 2026.
The subsidy landscape in 2026: what was on offer — and what applies from November
The former federal "Raus aus Öl und Gas" ("Out of Oil and Gas") programme no longer exists in that form: it was replaced in autumn 2025 by the Sanierungsoffensive (renovation offensive), administered by Kommunalkredit Public Consulting (KPC), with €360 million a year earmarked for 2026 to 2030 (climate ministry BMLUK, 3 October 2025, in German). At its heart is the so-called boiler swap.
In the 2026 boiler swap, detached, semi-detached and terraced houses could receive grants of at most 30 per cent of eligible costs, capped at €7,500 for a heat pump, €8,500 for a central wood boiler and €6,500 for a connection to local or district heating (KPC, November 2025). On 13 July 2026 the climate ministry announced that the funds had been fully taken up and closed registration; applications already registered are still being processed (BMLUK, 13 July 2026, in German). On 2 November 2026 the boiler swap is due to reopen, financed from funds returned by cancelled or unrealised projects and already at the 2027 rates: flat payments of €5,000 for a heat pump, €4,000 for a district heating connection and €6,000 for wood heating; the drilling bonus and the solar bonus remain (BMLUK, 15 October 2026, in German).
On top of the federal grant come the provincial schemes, some of which can be combined with it. In Vienna, for example, the city grants owners of single-family homes 35 per cent of the recognised costs, up to €8,000, for switching to a highly efficient alternative heating system; a one-off €4,000 is added for geothermal, groundwater or waste heat, and the federal grant can be claimed as well (City of Vienna, accessed 18 October 2026, in German). The other provinces use very different models; for a deeper look at the grants available for heat pumps, see our guide to heat pump subsidies in Austria 2026.
A chapter of its own is "Sauber Heizen für Alle" ("Clean Heating for All"): in 2026 this programme targeted households in the two lowest income deciles and could fund the heating switch at up to 100 per cent, limited by maximum amounts per technology. For a single-person household the limit was €1,867 net per month, twelve times a year, with correspondingly higher limits for larger households (KPC information sheet "Sauber Heizen für Alle" 2026, in German). When the budget ran out in July 2026, registration closed here too (BMLUK, 13 July 2026). For 2027 the programme is due to be developed further and folded into the Sanierungsoffensive; amounts and deadlines are still to come (BMLUK, 15 October 2026).
Pitfalls that cost real money in practice
The first and most expensive mistake is getting the order of events wrong. Many subsidies must be registered or applied for before the contract is signed or the system is ordered. Buy first and apply later, and you risk walking away empty-handed.
The second issue is speed. The funds of the Sanierungsoffensive are finite. In 2026 the pot was empty by July, and for the restart on 2 November the ministry expects only around €20 million in returned funds by the end of the year (BMLUK, 15 October 2026). Anyone planning for 2027 should prepare in good time: the new Sanierungsoffensive is due to start on 4 January 2027, with the final funding rules to be adopted in December.
Third, it pays to take a sober look at your own building. A heat pump in a poorly insulated older house with small radiators can become expensive to run if the flow temperature stays too high. It often makes sense to think about the heating switch and thermal renovation together, rather than merely swapping out the appliance.
And finally: get several quotes, insist on a proper heat-load calculation, and price in the ancillary costs — removing the old tank, adapting the radiators, electrical work — from the outset. The list price of the system is rarely the final bill.
Conclusion
Anyone in Austria who wants to move away from oil or gas in 2026 has three viable paths: a heat pump in renovated (or renovatable) buildings, district heating wherever the network reaches, and pellets as a robust solution for houses with high flow temperatures. The 2026 subsidies were generous, but finite: the federal funds and "Sauber Heizen für Alle" were used up in July. From 2 November 2026 the boiler swap is available again, with lower flat payments. Anyone planning a switch now should check their province's subsidy and the terms of the 2027 Sanierungsoffensive once they are set in December. The most important rule remains simple: calculate and take advice first, order second.
