Solar Subsidies: Photovoltaics & Solar Thermal Explained Simply

Solar systems are one of the most popular ways to cut energy costs and generate part of your own electricity or heat. To help the investment pay off faster, Germany offers numerous government funding programs for photovoltaic and solar thermal systems. In this article, you will learn which funding options are available, who is eligible and how high the grants can be.

At first glance, the funding landscape seems confusing: the federal government, the federal states and municipalities offer programs that sometimes run in parallel with different conditions. However, if you take a few hours to research before buying, you can significantly improve the economics of your system and avoid costly formal errors such as submitting an application too late. This guide sorts out the most important programs and shows what matters when applying.

The difference between photovoltaics and solar thermal

Before we look at the subsidies, it is important to understand the differences: although both technologies use the sun, they do so in completely different ways and are funded differently as a result. Photovoltaic modules generate electricity that you can use yourself, store in battery storage systems or feed into the public grid. Solar thermal collectors, on the other hand, heat a transfer fluid that releases its heat via a storage tank to the domestic hot water or the heating circuit.

This results in different areas of application: photovoltaics lowers your electricity bill and makes you more independent of your energy supplier, while solar thermal directly relieves the heating system, most noticeably for hot water generation in the summer months. At a glance:

• Photovoltaics (PV): Converts sunlight directly into electricity. Ideal for supplying your own energy.
• Solar thermal: Uses solar energy to heat water or to support space heating.

Both systems reduce the amount of energy you need to buy and receive government funding. Practical energy-saving tips can be found in the guide Energy Efficiency in Home Technology.

Which solar systems are eligible for funding?

A common misconception is that only complete new systems are funded. In fact, many programs also support the expansion and modernization of existing systems, such as replacing old collectors, retrofitting a storage tank or integrating the solar system into a new heating system. With older systems in particular, it is worth checking the current conditions, because modern components work much more efficiently.

Combined solutions are especially attractive: if you couple the solar system with a heat pump or surface heating, you make optimal use of solar energy throughout the year and often meet the requirements for additional bonuses. Funding is available for both new systems and the modernization of existing systems. These include:

• Photovoltaic systems for self-consumption or feeding into the grid
• Solar thermal systems for hot water generation and heating support
• Combinations with heat pumps or underfloor heating for maximum efficiency

Suitable components, from collectors to solar controllers, can be found in our solar technology range.

Which funding programs are available?

In Germany, funding is spread across three levels: the federal government with BAFA and KfW, the federal states with their own programs, and cities and municipalities with local grants. In many cases, these levels can be combined, which noticeably increases the total funding. The most important points of contact at a glance:

1. BAFA funding

The Federal Office for Economic Affairs and Export Control (BAFA) primarily supports solar thermal systems. Depending on the size of the system, grants of several thousand euros are possible. The grant is paid out directly and does not have to be repaid. This makes BAFA funding particularly easy to plan.

2. KfW funding

The KfW development bank offers low-interest loans and grants for photovoltaic systems and battery storage. The program for combining a PV system with battery storage is particularly interesting. The advantage of the loan model: you preserve your liquidity and finance the system partly through the electricity costs you save.

3. Regional funding

Many federal states, cities and municipalities offer additional grants. It is therefore worth checking with your local energy agency as well. These programs are often less well known and are used up more quickly. Those who inquire early have the best chances.

Funding amounts and requirements

How much money you ultimately receive depends on several factors: the type of system, its size, the location and the respective program. There is therefore no flat figure, but there are typical orders of magnitude you can use as a guide. It is important to compare programs before making a purchase decision, because the conditions sometimes differ considerably.

Typical funding:

• Photovoltaics: grants of up to 20% of the investment costs
• Solar thermal: grants of up to 30% of the costs, even more for large systems
• Combined systems: additional bonuses possible

Regardless of the program, almost the same basic rules apply everywhere. Knowing them helps you avoid the most common reasons for rejection:

• The system must be installed by a qualified specialist company.
• Applications must be submitted before installation begins.
• Proof of efficiency and use is required.

The second point is the most critical: with most programs, a contract that has already been signed, let alone an installation that has already started, leads to a complete loss of funding. There are also attractive grants for replacing your heating system. Find out more in the article Heat Pump Subsidies 2026.

FAQ on solar funding

Are there still subsidies for solar systems in 2025?

Yes, the federal government continues to focus on expanding renewable energy. Funding is also available in 2025 through BAFA, KfW and regional programs. As conditions can change, it is worth checking the current program conditions before applying.

Can I combine photovoltaics and solar thermal?

Yes, the combination is possible and often particularly efficient: the PV system covers the electricity demand, while solar thermal relieves the heating system. In addition, there are often extra funding bonuses for this.

How do I apply for funding?

Funding applications must be submitted directly to BAFA or KfW, usually online. We recommend talking to a specialist company beforehand to make sure the documents are submitted correctly. Optimizing the heating system at the same time pays off twice, see Hydraulic Balancing 2026: Requirements, Costs and KfW Funding.

Conclusion: use solar funding and benefit twice

Investing in solar systems not only saves energy costs but also brings attractive government grants. Whether photovoltaics or solar thermal, the funding programs of BAFA, KfW and regional bodies make getting started particularly worthwhile. Three things are crucial for success: applying before installation begins, having the work carried out by a specialist company and comparing several programs before making a purchase decision. If you keep these points in mind, you will get the maximum economic benefit out of your system. You can find the right technology for your home in the heating and solar technology selection at Wohnungstechnik.de.