Funding for the installation of air conditioning in the home: secure a grant of up to 30 per cent
25/06/2025
3
Minutes
Katrin Straub
Managing Director at nextsure
Rising temperatures are making the installation of air conditioning indispensable for many homeowners. However, you do not have to bear the costs alone. This article shows you how to find the right financing for installing an air conditioning system in your home and benefit from attractive government grants.
The topic in brief and concise terms
Government grants of 30 per cent are available via KfW only for air conditioning units with a heating function (air-to-air heat pumps).
A home improvement loan often offers better interest rates for financing than a conventional personal loan.
Alternatively, 20 per cent of tradesperson costs (up to €1,200 per year) can be claimed as a tax deduction.
Cost analysis: Planning an investment in air conditioning realistically
The cost of an air conditioning system in the home varies greatly depending on the system. A permanently installed single-split unit for one room costs between 1,700 and 3,500 euros including installation. For air conditioning several rooms with a multi-split system, you should expect to pay between 3,400 and 7,000 euros. Mobile monoblock units are cheaper to buy, with prices from 125 euros, but they use significantly more electricity and are less efficient. The annual running costs for an efficient split unit are around 144 euros for approximately 500 operating hours. This investment not only secures your living comfort, but can also increase the value of your property by up to five per cent. Proper financing planning is the first step towards cooling down.
Secure government grants: receive up to 30 per cent funding
There is no direct grant for pure cooling appliances for private individuals. The key lies in choosing the right appliance: Modern split air-conditioning systems that can also heat (so-called air-to-air heat pumps) are subsidised by the state. As part of the Federal Funding for Efficient Buildings (BEG), you receive a grant of 30 per cent towards the purchase and installation costs via Kreditanstalt für Wiederaufbau (KfW). It is important to submit the funding application before commissioning a specialist company. Only devices that are on the list of the Federal Office for Economic Affairs and Export Control (BAFA) and meet certain efficiency criteria are eligible for funding. With a suitable green loan, the remaining amount can often be financed at a favourable interest rate. The combination of funding and smart financing makes the investment much easier.
Choosing the right loan for your air conditioning system
For the remaining amount after deducting the grant, there are various loan options. A modernisation loan is often the first choice, as it is specifically designed for value-adding improvements to the house and offers lower interest rates than a standard personal loan. Banks often grant such loans of up to €50,000 without a land charge entry. Alternatively, a classic loan with unrestricted use of funds offers maximum flexibility if you are planning further smaller purchases. The term should be tailored to your financial situation; an accurate household budget helps with planning the monthly instalments. Some banks offer special „KlimaDarlehen“ with particularly attractive terms for energy-efficient projects. Those planning long-term can also use an existing home savings contract to finance the project. Comparing different offers is crucial in order to find the optimal solution.
Practical example: financing a multi-split system for 7,000 euros
A family chooses an energy-efficient multi-split air-conditioning system (air-to-air heat pump) for three rooms. The total cost, including professional installation, amounts to 7,000 euros. Thanks to the BEG subsidy, the family can apply for a grant of 30 per cent. This is how the calculation works:
Total cost: 7,000 euros
KfW grant (30 %): -2,100 euros
Remaining financing requirement: 4,900 euros
The grant reduces the loan amount required by almost a third. For the remaining 4,900 euros, the family takes out a home improvement loan with a term of five years. At an effective annual interest rate of four per cent, this results in a monthly instalment of around 89 euros. A loan with a longer term could reduce the instalment further. This makes the investment affordable even on a smaller budget.
Alternative to the subsidy: deduct 20 percent of tradespeople costs from tax
If you do not claim government funding or your appliance is not eligible for funding, there is an alternative. You can claim only the labour costs for installing the air conditioning system as a household service on your tax return. The tax office will reimburse you 20 per cent of the labour, travel and machinery costs. The maximum amount you can claim per year is capped at EUR 1,200, which corresponds to €6,000 in labour costs. It is important that you receive an official invoice on which labour and material costs are itemised separately, and that you pay the total by bank transfer. This option is also worth considering for financing a smart-home integration of the air conditioning system. This allows you to noticeably reduce your financial burden even without a direct grant.
Checklist: Four steps to successful financing
Good preparation is the key to securing the best possible financing for your air conditioning system. With these four steps, you can reach your goal with confidence:
Obtain quotes: Ask at least two specialist companies to provide detailed cost estimates for the system you want.
Apply for funding: Submit the KfW funding application for your air-to-air heat pump before signing a tradesperson contract.
Compare loan terms: Obtain offers for a renovation or instalment loan to finance the remaining amount. Take the interest rate and term into account.
Award the contract and implement: Once you have received both the funding approval and the loan approval, you can award the installation contract.
The final step is to get in touch for personalised advice.
Have your insurance situation checked free of charge and receive specific optimisation suggestions.
More useful links
KfW provides information on heating subsidies for private individuals in residential buildings (Product 458).
The Federal Environment Agency (UBA) provides information on natural refrigerants in stationary systems and their energy efficiency.
The Federal Environment Agency (UBA) provides information on funding under the new refrigeration and climate guideline.
The Federal Statistical Office (Destatis) offers content on the topic of climate.
The Federal Statistical Office (Destatis) provides a search form for press releases on the topic of climate.
The Federal Ministry for Economic Affairs and Climate Action (BMWK) publishes a press release on the launch of the new funding for heating system replacement and building efficiency measures.
The Consumer Advice Centre gives advice on the purchase and installation of air conditioning systems.
Wikipedia offers a comprehensive article on air conditioning.
FAQ
Do I need to take out a loan to have an air conditioner installed?
No, a loan is not absolutely necessary if you have sufficient own funds. However, financing is a good option for preserving liquidity and spreading the costs over a longer period, especially in combination with government grants.
What documents do I need for the funding application?
For the KfW funding application, you usually need the quotation from a specialist company, technical data for the planned system (to demonstrate eligibility for funding) and must involve an energy efficiency expert.
Can I combine funding and the tax bonus?
No, combining state BEG funding (KfW grant) with the tax bonus for tradesperson services for the same measure is not possible. You must choose one of the two options.
How long does it take to process a funding application?
The processing time at KfW can vary, but is often several weeks. It is essential to wait for the approval before you begin installing the air conditioning system, so as not to lose your entitlement to the funding.
Is an air conditioner also worth it for tenants?
For tenants, permanently installed split systems are only possible with the landlord's consent. Financing and funding would need to be clarified on an individual basis. Mobile units are an alternative, but they are less efficient and not eligible for funding.
What impact does air conditioning have on the energy performance certificate?
Installing a highly efficient air-to-air heat pump can reduce the building’s energy demand and thus improve the rating on the energy performance certificate. This is a particularly positive side effect in older buildings.
