VAT exemption for photovoltaic systems – what homeowners should know
Starting January 1, 2023, there's good news for homeowners in Germany who want to invest in a photovoltaic system: VAT on the purchase and installation of PV systems with a capacity of up to 30 kWp will be waived. This is a significant tax relief that will make it easier for many households to enter solar energy and reduce investment costs.
1. What does VAT exemption mean?
The VAT exemption means that homeowners no longer have to pay the 19% VAT when purchasing and installing a photovoltaic system. This tax relief applies not only to the solar modules themselves, but also to all associated components such as inverters, battery storage, and installation costs. This makes investing in a PV system significantly more affordable and attractive.
2. Who can benefit from the tax exemption?
The VAT exemption applies to all photovoltaic systems installed on private homes, garages, or outbuildings, provided the maximum output of the system does not exceed 30 kWp. Small businesses or public institutions can also benefit from this regulation if they install the system on their buildings. This represents a significant financial relief, especially for single-family homeowners.
3. What other tax advantages are there?
In addition to the VAT exemption, many photovoltaic systems are also exempt from income tax on revenue from the sale of excess solar power. This means that operators of smaller systems can feed the generated electricity into the grid without having to pay tax on the resulting income. This tax relief applies retroactively from January 1, 2022, and significantly simplifies billing and administration for private operators.
4. What are the benefits of tax exemption?
The VAT exemption significantly reduces the initial investment for a photovoltaic system. For example, a PV system that would normally cost €10,000 now costs only approximately €8,400 with the tax exemption. This difference makes the decision to install a solar system even more attractive, as the payback period is shortened and profitability increases.
5. How do I apply for tax exemption?
The tax exemption applies automatically upon purchase of the system, so homeowners don't need to submit any special applications. The seller should deduct the VAT directly from the invoice. However, it's advisable to inform the installer or supplier in advance to ensure the tax reduction is applied correctly.
Conclusion
The VAT exemption for photovoltaic systems is a major step toward a more climate-friendly energy future and makes investing in solar energy more financially attractive for homeowners. With the exemption from VAT and income tax on feed-in revenues, installing PV systems becomes significantly easier and more profitable for homeowners. Now is the ideal time to invest in solar energy and benefit from the new tax regulations.
