Financing Roof Renovation with Solar Panels: A Guide
7 May 2025
12
Minutes
Katrin Straub
CEO at nextsure
Considering a roof renovation and thinking about solar power? Combining both projects is one of the most economical decisions you can make for your home. Discover how you can save thousands of euros with joint financing and maximize government grants.
The topic in brief and concise terms
Combine roof renovation and PV installation to save up to 2,000 euros through synergies with scaffolding and craftsmen.
Take advantage of government subsidies such as the KfW loan 261 with up to 20 percent repayment subsidy to significantly reduce investment costs.
Benefit from the zero tax rate on PV systems, which reduces acquisition costs by 19 percent and minimises bureaucracy.
Leverage synergies: Cost savings through combined measures
The combined execution of roof renovation and PV installation creates significant financial advantages. You only need scaffolding once, which alone can save up to €2,000. Additionally, planning and tradesmen costs for electrics and roofing occur only once. This consolidation reduces total costs by up to ten percent. A roof renovation also provides the perfect opportunity to optimally prepare the roof structure and orientation for the solar panels. Such integrated planning not only ensures the longevity of both components for the next 25 years but also forms the basis for maximum energy yield. The combination of both projects is thus the first step towards an optimised financing strategy.
Government funding as the foundation of your financing
Government aid can significantly ease the financing of a roof renovation with a solar system. The federal and state governments offer low-interest loans and direct grants that reduce your investment costs. It is crucial to submit these applications before starting the measures. Combining various funding programs is often possible and maximises your savings.
KfW Loans: Affordable Financing from the Government
The Kreditanstalt für Wiederaufbau (KfW) is a central point of contact for financing. Here are the key programs:
KfW Loan 270 "Renewable Energies – Standard": This program offers a low-interest loan for the purchase and installation of photovoltaic systems and storage.
KfW Loan 261 "Residential Buildings – Credit": If you carry out the roof renovation according to the Efficiency House Standard, you can receive a loan of up to 150,000 euros with a repayment bonus of up to 20 percent.
A solar loan can complement these aids and ensure the remaining financing. The right combination of these funds is key to reducing the monthly burden.
Tax advantages: The zero tax rate as a direct profit
Since the first of January 2023, homeowners benefit from a massive tax relief. For the delivery and installation of photovoltaic systems and the associated storage units, a zero percent VAT rate applies. So, for a system valued at 20,000 euros, you directly save 3,800 euros. This advantage applies without bureaucratic hassle for systems on residential buildings.
Additionally, the income from the operation of PV systems up to a capacity of 30 kilowatt peak (kWp) on single-family homes is exempt from income and trade tax. This applies retroactively since the tax year 2022 and significantly simplifies the annual tax return. You can also claim craftsmen's services for pure roof renovation according to § 35a EStG for tax purposes. These tax incentives make the acquisition of a photovoltaic system even more attractive.
Alternative financing options for maximum flexibility
Alongside traditional promotional loans, there are other attractive financing models available. A modernisation loan from your local bank is often straightforward and doesn't require a land registry entry. Although the interest rates are usually slightly higher than those of the KfW, the processing is faster. Another option is the building savings contract. If you already have one, you can use both the savings balance and the low-interest loan for the renovation. This offers high planning security over the entire term. Our expert tip: Compare the terms of a earmarked eco loan with those of an unsecured instalment loan. Sometimes, banks offer special interest advantages for sustainable projects that become significant over a ten-year period. The choice of the right instrument depends on your financial situation and the equity available.
Calculation example: This is how the combined investment adds up
An example calculation illustrates the savings potential. Let's assume a 120-square-metre roof:
Roof renovation costs: A new insulation and covering will cost around 30,000 euros (approximately 250 euros per square metre).
Cost of the PV system: A 10 kWp system with storage costs about 20,000 euros.
Total costs (separate): 50,000 euros, plus separate costs for scaffolding and planning of around 3,000 euros.
Total costs (combined): 50,000 euros, as scaffolding and planning are only required once.
VAT deduction (19% on PV): -3,800 euros.
Possible KfW repayment subsidy (20% on renovation): -6,000 euros.
The remaining loan amount thus decreases from 53,000 euros to around 40,200 euros. This reduction of almost 25 percent demonstrates how the financing of a new roof covering is optimised through the combination with solar and subsidies.
Insurance coverage: The foundation for a worry-free future
A new photovoltaic system is a value-enhancing measure and must be reported to the insurer. Otherwise, you risk underinsurance. Most home insurance policies cover basic damage from fire, storm, or hail, but not all risks. A separate photovoltaic all-risk insurance offers more comprehensive protection. It also covers damage caused by operator errors, short circuits, or animal bites. The annual premiums for such a policy are often only between 50 and 150 euros. Our expert tip: Check whether your existing home insurance offers a powerful upgrade or whether a separate policy is the better option. Comprehensive protection secures your investment for the next two decades.
Conclusion: An investment that pays off multiple times over
Combining financing for roof renovation with a solar system is both economically and environmentally sensible. You can save up to €2,000 through synergies, benefit from government subsidies, and enjoy significant tax advantages. The investment not only reduces your ongoing energy costs by up to 80%, but also increases the value of your property. With careful planning of financing and insurance coverage, you create a sustainable and profitable foundation for the future of your home.
Request an individual risk analysis now: Have your insurance situation checked free of charge and receive concrete optimization suggestions.
More useful links
The KfW provides detailed information on the promotion of photovoltaic systems as part of the renovation of existing properties.
On the KfW website, you will find information on the promotion of roof insulation during the renovation of existing properties.
The Federal Ministry for Economic Affairs provides information about the government's Solar Package 1 and its measures to promote solar energy.
A press release from the Federal Statistical Office (Destatis) offers relevant data and facts on the topic.
The Consumer Centre provides important advice for planning a photovoltaic system.
The German Energy Agency (dena) informs about its support in the implementation of the photovoltaic strategy.
Current market data on the solar industry in Germany is available from the German Solar Industry Association (BSW).
The Market Master Data Register (MaStR) of the Federal Network Agency is used for the registration of energy installations.
The Federal Ministry of Finance answers frequently asked questions about the promotion of photovoltaic systems.
FAQ
Which loan is best for a roof renovation with solar panels?
The KfW loan 261 is often the best choice when you carry out comprehensive energy renovation, as it offers a high repayment subsidy. For a simple PV system, the KfW loan 270 is suitable. It’s also worth comparing with modernization loans from your local bank.
Do I need to report my new solar system to my insurance company?
Yes, absolutely. Installing a PV system represents an increase in value and risk. Without notifying your home insurance, you risk having a coverage gap in the event of damage. Often, a separate photovoltaic insurance is the better solution.
How much do I save with the zero tax rate on a PV system?
You save the entire value-added tax of 19% on the purchase and installation of the system and the storage unit. For example, with acquisition costs of 16,000 euros, the savings amount to 3,040 euros.
Can I apply for funding retrospectively?
No, as a rule, all funding applications, particularly with KfW and BAFA, must be submitted and approved before awarding contracts and starting construction work. Retroactive funding is excluded.
Is it worth installing a solar system without a roof renovation?
Yes, if your roof is in good condition and has a long lifespan, installing a PV system can be worthwhile even without renovation. However, the combination is more cost-effective when roof work is already planned.
What does a photovoltaic all-risk insurance cover?
In addition to standard risks such as fire, storm, and hail, it often also covers damage caused by operational errors, vandalism, animal bites, short circuits, and loss of income. The protection is therefore significantly more comprehensive than with a pure home insurance policy.
