- German Parliament authorizes tx break for small PV systems.
- Beginning January 1, 2023, the 19% VAT on the purchase and installation of solar systems.
A variety of tax breaks for small photovoltaic (PV) systems have been authorized by the German Parliament, a move that is anticipated to encourage the installation of solar energy on the rooftops of homes and businesses throughout Germany.
The income from solar power feed-in will not be subject to income and trade tax for small solar power plant operators under the new tax regulations. As of January 1, 2022, photovoltaic (PV) systems on single-family homes and commercial buildings that have a capacity of up to 30 kWp are eligible for this tax break. The exemption will only be available for solar plants that are up to 100 kW per taxpayer and up to 15 kWp per residential or commercial unit for multi-family and mixed-use buildings.
Additionally, beginning January 1, 2023, the 19% VAT on the purchase and installation of solar systems, including battery storage, will be eliminated. Systems that were ordered in 2022 but won’t be operational until next year are also exempt from VAT. On the acquisition of a new solar system, the tax benefit is predicted to result in savings in the four figures.
Reiner Priggen, the head of the North Rhine-Westphalian association for renewable energy, commented on the matter and said that the tax exemption for residential photovoltaic systems provides many households with a long overdue incentive to engage in solar energy.
In his words, the enormous bureaucratic effort associated with the tax returns for the income from solar power generation has deterred many homeowners from installing their solar systems.