Financing for the installation of air conditioning systems in the home: Secure up to 30 percent subsidy
25 Jun 2025
10
Minutes
Katrin Straub
CEO at nextsure
Rising temperatures make the installation of air conditioning essential for many homeowners. However, you don't have to bear the costs alone. This article shows you how to find the right financing for installing air conditioning in your home and benefit from attractive government subsidies.
The topic in brief and concise terms
State subsidies of 30 percent are only available for air conditioning units with a heating function (air-to-air heat pumps) through KfW.
A modernization loan often offers better interest rates for financing than a traditional installment loan.
Alternatively, 20 percent of the artisan costs (up to €1,200 annually) can be deducted from taxes.
Cost analysis: Realistically planning the investment in an air conditioning system
The cost of air conditioning 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 in multiple rooms with a multi-split system, you should expect expenses of 3,400 to 7,000 euros. Mobile monoblock units are cheaper to purchase, starting from 125 euros, but consume significantly more electricity and are less efficient. The annual operating costs for an efficient split unit are around 144 euros for approximately 500 operating hours. This investment not only ensures your living comfort but can also increase the value of your property by up to five percent. Proper financial planning is the first step to cooling down.
Secure government grants: Receive up to 30 percent funding
There is no direct subsidy for standalone cooling devices available for private individuals. The trick is in choosing the right device: Modern split air conditioning units that can also heat (known as air-to-air heat pumps) receive state subsidies. As part of the Federal Funding for Efficient Buildings (BEG), you receive a 30 percent grant on the acquisition and installation costs through the Kreditanstalt für Wiederaufbau (KfW). It is crucial to submit the grant application before commissioning a professional 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 eco-loan, the remaining amount can often be financed at favorable interest rates. The combination of funding and smart financing makes the investment significantly easier.
Choose the right loan for your air conditioning
For the remaining amount after deducting the funding, there are various loan options. A modernisation loan is often the first choice, as it is specifically designed for home improvement measures and offers lower interest rates than a normal instalment loan. Banks often provide such loans up to an amount of 50,000 euros without requiring a land charge. Alternatively, a classic loan with no specific purpose offers maximum flexibility if you are planning additional small purchases. The term should be adjusted to your financial situation; a proper household budget helps with planning the monthly instalments. Some banks offer special “Climate Loans” with particularly attractive conditions for energy-efficient projects. Those planning long-term can also use an existing building savings contract for financing. Comparing various offers is crucial to finding the optimal solution.
Case study: Financing a multi-split unit for €7,000
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 funding, the family can apply for a grant of 30 percent. The calculation is as follows:
Total costs: 7,000 euros
KfW grant (30%): -2,100 euros
Remaining financing requirement: 4,900 euros
The grant reduces the required loan amount by almost a third. For the remaining 4,900 euros, the family takes out a modernisation loan with a term of five years. With an effective annual interest rate of four per cent, this results in a monthly instalment of approximately 89 euros. A loan with a longer term could reduce the instalment further, making the investment manageable even on a smaller budget.
Alternative to subsidies: Deduct 20 percent of craftsman costs from taxes
If you do not take advantage of government funding or your device is not eligible for funding, there is an alternative. You can deduct the pure labour costs for installing the air conditioning as a craftsman's service from your taxes. The tax office reimburses you 20 per cent of the labour, travel, and machinery costs. The maximum amount you can claim per year is capped at 1,200 euros, which corresponds to craftsmen's costs of 6,000 euros. It is important that you receive an official invoice showing the labour and material costs separately and that you pay the sum by bank transfer. This option is also interesting for financing a smart home integration of the air conditioning. This way you can significantly reduce your financial burden even without a direct grant.
Checklist: Four Steps to Successful Financing
Proper preparation is the key to optimally financing your air conditioning system. Follow these four steps to reach your goal confidently:
Obtain quotes: Request detailed estimates from at least two specialist companies for the desired system.
Apply for funding: Submit the KfW grant application for your air-to-air heat pump before signing a contractor agreement.
Compare loan terms: Gather offers for a modernization or installment loan to finance the remaining amount. Consider the interest rate and term.
Place the order and implement: After receiving approval for the grant and loan, you can award the installation contract.
The final step is reaching out for personalized advice.
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More useful links
KfW provides information on heating grants for private individuals in residential buildings (Product 458).
The Umweltbundesamt (UBA) provides information on natural refrigerants in stationary systems and their energy efficiency.
The Umweltbundesamt (UBA) offers details on funding through the new Cooling-Climate Directive.
The Statistische Bundesamt (Destatis) provides content on the key topic of climate.
The Statistische Bundesamt (Destatis) offers a search form for press releases on the subject of climate.
The Bundesministerium für Wirtschaft und Klimaschutz (BMWK) publishes a press release on the launch of the new funding for heating replacements and building efficiency measures.
The Verbraucherzentrale provides advice on purchasing and installing air conditioning systems.
Wikipedia offers a comprehensive article on the topic of air conditioning.
FAQ
Do I need to take out a loan to install an air conditioner?
No, a loan is not necessarily required if you have sufficient equity. However, financing is a good option to preserve liquidity and spread the costs over a longer period, especially in combination with government grants.
What documents do I need for the grant application?
For the KfW funding application, you will generally need the cost estimate from a specialist company, the technical data of the planned installation (to demonstrate eligibility for funding), and you must involve an energy efficiency expert.
Can I combine funding and tax bonuses?
No, a combination of government BEG funding (KfW grant) and the tax bonus for craftsman 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 it often takes several weeks. It is crucial to wait for the approval before starting the installation of the air conditioning system to avoid losing the eligibility for the subsidy.
Is it worth having an air conditioning unit even for tenants?
For tenants, permanently installed split systems are only possible with the landlord's consent. Financing and subsidies would have to be clarified individually. Portable units are an alternative, but they are less efficient and not eligible for subsidies.
What impact does an air conditioning system have on the energy performance certificate?
The installation of a high-efficiency air-to-air heat pump can reduce the building's energy demand and thereby improve its energy performance certificate rating. This is a particularly positive side effect for older buildings.
