Germany approves tax benefits for small solar installations

• The German Parliament has approved a variety of tax benefits for small photovoltaic (PV) systems in a step anticipated to spur the release of solar power on the roof coverings of domestic and commercial structures across Germany.

The adjustments belong to the Yearly Tax Act 2022 that the Bundestag passed on Friday.

Under the new tax regulations, the drivers of small solar power plants will not pay income as well as profession tax on the income from the feed-in of solar energy. This tax relief applies with retroactive result as of January 1, 2022 to photovoltaic (PV) systems on single-family houses and commercial homes of up to 30 kWp. For multi-family as well as mixed-use buildings, the exception will put on solar plants of approximately 15 kWp per property or commercial unit, yet only as much as 100 kW per taxpayer.

In addition, the 19% VAT on the acquisition and also installation of photovoltaic systems including battery storage will certainly be eliminated on January 1, 2023. The VAT exemption applies also to systems that were bought in 2022 but will go into operation next year. The tax benefit is estimated to conserve a four-digit amount on the purchase of a new solar system.

Talking about the issue, the chairman of the renewable energy association in North Rhine-Westphalia LEE NRW, Reiner Priggen, claimed that the tax exception for exclusive photovoltaic systems gives many house owners a long past due motivation to invest in solar energy.

In his words, the substantial bureaucratic initiative related to the income tax return for the income from solar power generation has hindered numerous property owners from mounting their own solar systems.