Is there anyway for developer to test Google keyword Tools API for free?
You can test it against the sandbox without charge but you don't get the real results that you would from the live system.
Testing against the live API uses API units. However, I usually find I only need to pull down a few keywords for testing and even with many testing cycles it doesn't really cost very much.
One thing you can do to reduce costs is to get the tool working with the sandbox to make sure there aren't any errors etc. Then, once it's working, just run a few tests in production to check the data looks correct.