Replacing an Oil Boiler with a Heat Pump in Luxembourg: Complete 2026 Guide
By Yacine Sahnoune, founder of renov.lu
Still heating with oil? Now is the right time to switch to an air-water heat pump. In 2026, the Klimabonus Wunnen scheme provides €10,000 for an aerothermal heat pump replacing an oil boiler (€12,000 if ordered by 30 June 2027) — and the 10-year age requirement has been removed. Here’s everything you need to know: compatibility, grants, costs, oil tank, steps, and real return on investment in Luxembourg.
- Klimabonus: an air-to-water heat pump replacing an oil boiler receives €10,000 (€12,000 if ordered by 30 June 2027), and up to €17,500 with the bonuses (distribution upgrade, tank, water protection zone).
- No age condition: since 1 January 2026, the boiler no longer needs to be 10 years old; no approval in principle: you apply after installation, within 4 years following the year of the invoice.
- Cost: allow €18,000–24,000 gross for a 100–150 m² house, radiator upgrades included; installation takes 2–4 days.
- 3% VAT: in your main residence at least 10 years old, the supplied-and-installed heat pump is invoiced at 3% instead of 17%, a saving of about €2,800 on a €20,000 installation.
- Oil tank: it must be emptied, cleaned and then neutralised (€500–1,500) or removed (€800–2,000), and its decommissioning reported to the Environment Administration within one month.
- Technical conditions: 30-litre-per-kW buffer tank, hydraulic balancing, heat meter and dedicated electricity meter; the installer requests acceptance from the Chambre des Métiers within one month of commissioning.
Ready to replace your oil boiler?
Request a free quote from verified installers in Luxembourg. Response within 48h, no commitment.
Request free quotes →Why replace your oil boiler now in Luxembourg?
Oil is the most expensive and most polluting heating fuel still in common use in Luxembourg. Since the 2021-2022 energy crisis, its price has risen by more than 50% compared to 2020, and remains highly volatile due to international oil markets and geopolitical tensions. By contrast, the electricity consumed by a heat pump can be generated from renewable sources, and its effective cost per thermal kWh produced is significantly lower.
For a 130 m² home that burns 2,500 litres of heating oil a year, the heating bill comes to about €2,600 (at €1.05/litre). With an air-water heat pump, it drops to about €1,800/year — a saving of about €800 a year, more when oil prices rise (detailed calculation below).
There is also a regulatory and property dimension. The energy passport (CPE) of an oil-heated home is typically rated E, F or G. Switching to an air-water heat pump can gain two to three energy classes, directly increasing your property’s value and making it easier to sell or rent.
The requirement for your oil boiler to be at least 10 years old has been removed. You can now receive the replacement bonus even if your boiler is relatively new — a clear signal from the Luxembourg government to accelerate the phase-out of oil heating.
Is your home compatible with an air-water heat pump?
Good news for oil-heated Luxembourg homeowners: a home with an oil boiler and water radiators is almost always compatible with an air-water heat pump. In fact, this is the ideal use case for this type of heat pump.
Here’s the logic: your old oil boiler heated the circuit water to high temperatures (70–80°C). A modern air-water heat pump produces water at 35–55°C. The question is therefore not about replacing radiators, but verifying that your distribution network can operate at low temperature.
Compatibility criteria to check
Existing water radiators: if correctly sized (ideally oversized vs. the old boiler), they can operate at 45–55°C with the heat pump. Many Luxembourg radiators installed in the 1980s–2000s were deliberately oversized — making them perfectly compatible.
Existing underfloor heating: ideal, as it operates at low temperature (28–35°C) — perfectly suited to an air-water heat pump.
Old small cast iron radiators: if undersized and requiring 70°C+ to heat properly, replacement or supplementation may be needed. The 2026 Klimabonus includes a grant for adapting the distribution system.
Available outdoor space: the heat pump’s outdoor unit must be placed on a façade, in the garden or on the roof, respecting acoustic distances from neighbours.
Home insulation: good insulation improves heat pump efficiency. Even in an imperfectly insulated home (class C-D), an air-water heat pump is worthwhile — but a full renovation (insulation + heat pump) maximises grants and savings.
If in doubt about radiator compatibility, a qualified installer can perform a heat loss calculation (EN 12831 standard) to determine the exact heat pump power needed and verify whether existing radiators are sufficient. This step is included in any serious quote.
Check your home’s compatibility — get a free analysis from a verified installer.
Request a free quote →What to do with the oil tank during replacement?
This is a question every homeowner asks, and often a source of concern. Rest assured: tank management is a well-regulated process in Luxembourg, and it even benefits from specific financial assistance.
Options for your oil tank
Draining, degassing and in-situ neutralisation
The most common solution for buried tanks that are difficult to extract. An approved specialist drains residual oil, cleans and degasses the tank, then neutralises it by filling with sand or expanding foam. The tank remains in place but presents no further environmental or fire risk.
Full removal
For above-ground or accessible tanks, physical removal is possible. A specialist cuts the tank and takes it to an approved treatment centre. Estimated cost in Luxembourg: €800–2,000 depending on size and accessibility.
Conversion to rainwater cistern
In some cases, a tank in good condition can be reconditioned to store rainwater. This option is more complex and depends on the location and condition of the tank.
Grants for tank removal
The Luxembourg Klimabonus provides a specific grant of €1,500 for the removal, neutralisation and recycling of the oil tank, on the invoice of a specialist firm. The 2026 scheme adds a €2,000 bonus when the oil boiler being replaced is located in a drinking water protection zone.
Neutralisation or removal of an oil tank must be carried out by a licensed, specialist firm. Never attempt to drain or cut a tank yourself — hydrocarbon residues are flammable and toxic. Your heat pump installer can usually coordinate this work with a specialist.
2026 grants for replacing an oil boiler with a heat pump
This is one of the best-subsidised projects in Luxembourg. Three grants can be combined, plus possible municipal grants.
1. Klimabonus Wunnen 2026 — €10,000 to €17,500
The Klimabonus is Luxembourg’s main state grant for renewable technical installations. Since 1 January 2026, the scheme has been restructured with flat-rate amounts independent of installation power. For replacing an oil boiler with an air-water heat pump, the 2026 Klimabonus amounts to €10,000 (€12,000 if the heat pump is ordered by 30 June 2027) and can reach €17,500 with the bonuses, including: the base grant for installing the heat pump; the fossil boiler replacement bonus (now integrated into base amounts); a supplementary grant for adapting the distribution system; a grant for oil tank removal; and a specific bonus if the replaced boiler is in a water protection zone.
The oil boiler replacement bonus (Masuttersatzprogramm) is now integrated into the base amounts of the 2026 Klimabonus. A tripartite increase of €2,000 is added for a heat pump ordered between 1 January 2026 and 30 June 2027. Always verify exact amounts at klima-agence.lu.
2. Enoprimes — €1,700 to €2,500
Enoprimes is a bonus scheme run by energy suppliers. For an air-water heat pump in a house, it pays €1,700 to €2,500, plus a €1,000 anniversary bonus in 2026 (amounts checked on enoprimes.lu on 25 September 2026). The file must be opened before you place the order, by an installer who is a partner of the scheme. Cumulable with the Klimabonus.
3. Reduced VAT at 3%
A heat pump supplied and installed by the contractor in your main residence at least 10 years old is invoiced at 3% VAT instead of 17%, up to a tax benefit of €50,000 per dwelling. On a €20,000 installation (excl. VAT), this saves about €2,800. The rate is applied directly on the invoice if the installer obtained AED approval before the works (you countersign the application); otherwise you claim a refund.
4. Municipal grants
Some Luxembourg municipalities pay an additional grant for energy renovation or heat pumps. Amounts and conditions vary from one municipality to another: ask your local authority before placing the order.
| Grant type | Organisation | Estimated amount | When to apply? |
|---|---|---|---|
| Klimabonus air-water heat pump | Luxembourg State / Klima-Agence | €10,000 (€12,000 if ordered by 30/06/2027), up to €17,500 with bonuses | After installation, within 4 years |
| Enoprimes heat pump | Energy suppliers (enoprimes.lu) | €1,700–2,500 (+ €1,000 bonus in 2026) | Before the order, via a partner installer |
| Klimabonus: oil tank bonus | Luxembourg State / Klima-Agence | €1,500 (included in the €17,500) | With the Klimabonus application |
| Reduced VAT 3% | Registration duties authority (AED) | ~€2,800 (base €20,000) | On the invoice if the installer has AED approval, otherwise by refund |
| Municipal grant | Your municipality | €500 to €6,000 for an air-to-water heat pump (your commune’s amount) | Set by each municipality |
Calculate your personalised grants with our free tools.
Request a free quote →Costs, savings and return on investment
| Home profile | Gross installation cost | Estimated Klimabonus | Net cost after Klimabonus | Annual savings | Payback period |
|---|---|---|---|---|---|
| 80–100 m² house, compatible radiators | €16,000–19,000 | €12,000 | €4,000–7,000 | €500–650 | 8–11 years |
| 100–150 m² house, radiator adaptation included | €18,000–24,000 | €12,000–14,000 | €4,000–12,000 | €650–950 | 6–13 years |
| House > 150 m², high power required | €22,000–28,000 | €12,000–14,000 | €8,000–16,000 | €950–1,300 | 8–12 years |
Klimabonus for a heat pump ordered by 30 June 2027 (€12,000, then €10,000), plus up to €2,000 for radiator adaptation; Enoprimes (€1,700–2,500) lower the net cost further if the file is opened before the order. Savings calculated for 1,500–2,000, 2,000–3,000 and 3,000–4,000 litres of heating oil a year: oil at €1.05/litre, 90% boiler efficiency, electricity at €0.258/kWh, average COP 3.2. Payback = net cost ÷ annual savings. Indicative data based on real Luxembourg projects — 2026.
Why are oil savings so significant?
Heating oil in Luxembourg costs approximately €0.90–1.20/litre with a calorific value of ~10 kWh/litre, giving an effective cost of 10–14 cents per thermal kWh (at 85–90% boiler efficiency). A heat pump with an average COP of 3.2 and electricity at €0.258/kWh incl. VAT (the government’s estimate of the average 2026 price) costs about 8 cents per thermal kWh — 20–40% cheaper than oil.
A 130 m² oil-heated home typically consumes 2,500 litres of fuel per year, costing ~€2,600 (at €1.05/litre) for about 22,500 kWh of heat (90% efficiency). With an air-water heat pump (average COP 3.2), the same home needs ~7,000 kWh of electricity, costing ~€1,800 at €0.258/kWh — a saving of about €800/year, and more during oil price peaks. Assumptions and comparison with gas: see the running cost of a heat pump.
Project steps: from decision to grants received
Simulation and budget estimate
Start by simulating your grants and project budget using the Klima-Agence simulator.
Visit and free quote from a certified installer
Have a free quote drawn up by a professional certified and registered with the Luxembourg Chamber of Crafts. The installer will conduct a thermal study of the building (EN 12831 standard). Compare at least 2 quotes — the difference can reach €3,000–5,000 for the same installation. To compare the models offered, see our heat pump brand comparison. If you want the Enoprimes, choose an installer who is a partner of the scheme: they open the file before the order.
Energy advice (whole-house renovation) and Klimabonus application
No agreement in principle is needed for a heat pump: the Klimabonus application is filed after installation with the AEV environmental agency via MyGuichet.lu, within 4 years of the end of the invoice year. Your installer can handle this administrative process.
Heat pump installation (2–4 days)
Once the quote is signed, work can begin. An air-water heat pump installation typically takes 2–4 days. In parallel, the oil tank removal is scheduled with a specialist.
Acceptance and grant applications
Since 19 September 2025, the installer must submit an acceptance request to the Chamber of Crafts building inspection service within one month of commissioning; proof of this request is attached to the Klimabonus file. You can then file your Klimabonus application.
Grant payment
Allow approximately 2–4 months for Klimabonus payment after submitting a complete file. Enoprimes are paid about 4 weeks after the file is validated.
What do the replacement works involve?
Day 1 — Boiler removal and preparation: The team takes the heating system out of service, drains the water circuit, and removes the old oil boiler. The burner, tank, pump and connection pipes are dismantled.
Days 1-2 — Outdoor unit installation: The outdoor unit is positioned and secured according to acoustic and maintenance constraints. Core holes are drilled in the façade to run refrigerant and electrical connections between the outdoor and indoor units.
Days 2-3 — Indoor unit and hydraulics: The indoor unit is installed where the old boiler was. The buffer tank (minimum 30 litres per kW of power in existing buildings, per 2026 Klimabonus rules), domestic hot water tank, pump and all hydraulic connections are installed. Hydraulic balancing of the heating network is performed — a mandatory condition for Klimabonus eligibility.
Days 3-4 — Testing, commissioning and adjustment: The heat pump is commissioned. Installers test pressures, verify there are no refrigerant leaks (F-Gas compliant), adjust heating curves and complete a full heating cycle. You receive training on using the controls.
Since the 2022 scheme and confirmed in 2026, the heat pump must be fitted with a heat meter and a dedicated electricity meter. These instruments track the real-world COP of your installation — and are required for the Klimabonus application.
Special cases: old house, large area, harsh winters
Houses built before 1980: insulate first?
A common question. Our experts’ nuanced answer: not mandatory, but strongly recommended to do both simultaneously. An air-water heat pump can work perfectly in a poorly insulated home — it will simply be more powerful and consume more electricity. Combining insulation and heat pump in the same project enables additional Klimabonus grants and allows for a smaller, less expensive heat pump. The cumulative saving over 15 years can exceed €15,000.
Large homes (> 130–150 m²)
For very large homes, a single air-water heat pump may be insufficient during prolonged cold snaps. Recommended solutions: high-power air-water heat pump (12–16 kW) with integrated backup resistance; hybrid heat pump + wood pellet boiler (heat pump covers 70–90% of annual needs); or geothermal heat pump for best year-round performance (€30,000–40,000; Klimabonus €12,000, or €14,000 if ordered by 30 June 2027).
Very low temperatures: real behaviour in Luxembourg
Luxembourg experiences cold winters with temperatures regularly falling to −5°C to −10°C. At these temperatures, an air-water heat pump’s COP drops to 1.5–2.5. However, periods below −10°C account for less than 5% of annual heating hours in Luxembourg. Over the full season, the average COP is generally 2.8–3.5 — highly cost-effective overall.
High-temperature radiators, a house not yet insulated, no room for an outdoor unit? The pellet boiler takes over your installation almost unchanged — our guide prices equipment, silo and consumption.
Frequently asked questions — Replacing an oil boiler with a heat pump in Luxembourg
Can I replace a recent oil boiler (less than 10 years old) and still receive the Klimabonus?
Yes, since 1 January 2026. The new Klimabonus Wunnen 2026 scheme has removed the condition requiring the boiler to be at least 10 years old. Regardless of your oil boiler’s age, you can claim the full grant if your heat pump installation meets the required technical conditions.
Are my radiators compatible with an air-water heat pump?
In the vast majority of Luxembourg cases, yes. Homes with oil boilers and water radiators are generally compatible with an air-water heat pump. A certified installer will perform a heat loss calculation during the visit to confirm compatibility. If some radiators need adapting, the Klimabonus includes a specific grant for this adaptation.
What happens to my oil tank? Must I have it removed?
Not necessarily removed: a tank taken out of service must be drained, cleaned, then neutralised or removed, and its decommissioning reported to the Environment Administration within one month. The Klimabonus adds €1,500 for removing or neutralising the tank, on the invoice of a specialist firm. In-situ neutralisation costs €500–1,500 and is the most common solution for buried tanks.
How much does replacing an oil boiler with an air-water heat pump cost after grants?
For a 100–150 m² home, expect a gross cost of €18,000–24,000. After a Klimabonus of €12,000 (heat pump ordered by 30 June 2027), plus up to €2,000 for radiator adaptation, about €4,000–12,000 remains to be paid, before Enoprimes. Heating savings are about €650–950 a year, or about €800 for a 130 m² home that used 2,500 litres of oil.
Does my air-water heat pump also produce domestic hot water?
Yes. Most air-water heat pumps installed in Luxembourg integrate domestic hot water production via a coupled thermodynamic tank. The heat pump thus provides both heating and hot water with a single system.
What maintenance does a heat pump require?
An air-water heat pump has an average lifespan of 15–20 years with proper maintenance. An annual maintenance contract is strongly recommended: checking the refrigerant circuit, cleaning filters and the outdoor unit heat exchanger, verifying electrical connections. An annual contract in Luxembourg typically costs €150–300.
Take action — request your free quotes
Compare free quotes from verified installers in Luxembourg for your oil boiler replacement.
Request quotes →