Solar: Photovoltaics will be cheaper in 2023 - no more tax when buying and operating smaller solar systems

The 2022 Annual Tax Act provides for significant tax relief for smaller photovoltaic systems. This will affect both income tax and sales tax.

On September 14, 2022, the federal government agreed to reduce tax and bureaucratic hurdles for photovoltaic systems by January 1, 2023.

“The Annual Tax Act 2022 sets the course for a transparent and fair tax system. The focus is on tax relief and adjustments that will further advance the digitalization of tax administration.”

The Annual Tax Act 2022 (JStG 2022) is intended to meet this technically necessary legislative requirement. This includes the introduction of an income tax exemption for certain photovoltaic systems as well as the expansion of the advisory authority of income tax assistance associations in connection with tax-exempt photovoltaic systems.

Introduction of an income tax exemption

There will be an income tax exemption for income from the operation of photovoltaic systems up to a gross nominal output (according to the market master data register) of 30 kW for single-family homes and commercial properties or 15 kW per residential and commercial unit for other buildings used primarily for residential purposes (e.g. multi-family houses, mixed-use buildings). real estate).

Expansion of the advisory authority of income tax assistance associations

In the future, income tax assistance associations should also be able to advise their members on income tax if they operate photovoltaic systems with an installed output of up to 30 kW (peak), which are subject to the above-mentioned income tax exemption.

Sales tax: zero tax rate

In the future, a zero VAT rate will apply to the delivery, intra-community acquisition, import and installation of photovoltaic systems and electricity storage systems, provided that it is a service to the operator of the photovoltaic system and the system is located on or near private homes, apartments, etc public and other buildings that are used for activities serving the public good. Since photovoltaic system operators are no longer burdened with sales tax when purchasing the system, they no longer have to waive the small business regulation in order to have the input tax refunded. This relieves you of the burden of bureaucracy.

It was previously possible to have the sales tax on solar systems reimbursed by the tax office. This is now easier and there is no bureaucratic effort.

Previously, owners of solar systems that generated up to 10 kWp were able to have their systems exempt from tax if they submitted an application. Even private photovoltaic systems that feed electricity into the public grid with the aim of making a profit were usually classified by the tax office as hobby and the owners were therefore exempt from tax liability. However, this presupposed that an economic viability forecast was available.

In the other case, the small business regulation could be applied up to a turnover of 22,000 euros, so that you are not subject to VAT. This applies to the majority of all private PV system operators as long as you do not earn any further income from self-employment.

“The planned legal changes can certainly be described as a sensation, because they will bring about real tax simplification and a welcome relief from bureaucratic obligations.”

Additional to:

• Tax relief for smaller photovoltaic systems from 2023

Changes in EU law make it possible to have PV systems delivered and installed without sales tax in the future. Private operators in particular can purchase their new system cheaper, namely at the net price. See also zero tax rate for solar systems, installations and electricity storage .

When it comes to income tax, the federal government is taking up the states' appeal to legally exempt the operation of small PV systems from tax. Systems on single-family homes with up to 30 kilowatt peak should benefit. For multi-family and mixed-use buildings, the limit is 15 kilowatt peak per residential or commercial unit. So far there is only a simplification rule for systems up to ten kilowatt peak.

The current voices on this:

Baden-Württemberg's Finance Minister Dr. Danyal Bayaz said: “We need more solar power for the energy transition. To achieve this, it helps to reduce tax barriers and bureaucratic burdens.”

Hesse's Finance Minister Michael Boddenberg : “Private photovoltaic systems can make an important contribution to the energy transition, because every step counts. We want to save bureaucratic effort. Nobody should have to go to a tax advisor just because of their photovoltaic system.”

Bavaria's Finance Minister Albert Füracker : “Less bureaucracy and at the same time more legal certainty - an important step to make the operation of photovoltaic systems much easier and more attractive for citizens. Tax law also makes a crucial contribution to the success of the energy transition. It’s good that the federal government has finally taken up this demand from Bavaria and the other states.”

North Rhine-Westphalia's Finance Minister Dr. Marcus Optendrenk : “Photovoltaic systems make a practical contribution to a reliable, independent and sustainable energy supply. Do more, less bureaucracy – that’s what it’s all about now.”

Schleswig-Holstein's Finance Minister Monika Heinold : “In order for the energy transition to succeed, every single one is needed. In the countries we see what is actually working locally and where there are still hurdles. We want to break down these hurdles and simplify the use of private photovoltaic systems. It’s good that the federal and state governments are pulling together.”

The planned zero tax rate is something completely new in German sales tax law. This means that deliveries and installations of these systems will be taxed at a 0% tax rate from next year. So there is no sales tax here anymore or the sales tax is 0%. We know something similar (but something completely different) from the reduced tax rate of 7% in the area of ​​food and books such as newspapers.

Background knowledge:

The normal tax rate is 19 percent. Certain services are taxed at a reduced tax rate of 7 percent in accordance with Section 12 (2) UStG or are tax-exempt in accordance with Section 4 UStG. The standard rate of 19 percent has been in effect since January 1, 2007, the reduced tax rate of 7 percent since July 1, 1983. In addition, Section 24 UStG contains average rates for agricultural and forestry businesses, whose tax rate is 5.5% or can be 10.7%. In addition, according to Section 23 UStG, there are average tax rates from the two tax rates for agricultural and forestry businesses as well as certain companies and corporations.

The zero tax rate will now apply from 2023 to installations and deliveries of solar modules, including electricity storage, to operators if the PV system is installed on or near private homes, public and other buildings.

In the future, it will be the responsibility of the solar installer or seller to determine whether the 0% or 19% sales tax regulation will be used. Either via a written advance confirmation from the customer not to operate a system larger than 30 kWp and/or proof must be provided via the market master register:

• More about the market master data register (MaStR)
• Registration in the market master data register

A solar system, an electricity storage system or a completed installation that has already been purchased can no longer be subsequently billed using the zero tax rate of sales tax. Logically, with the zero tax rate there is no longer any possibility or need to have VAT refunded.

If the purchase and commissioning via a specialist company for 2022 has not yet been completed and advance payments have already been made, the commissioned company can correct the 19% VAT calculated from 2022 accordingly in the final invoice for 2023.

We are from the region! We advise, plan and take care of the installation. We have interesting solar solutions for you. From the roof to the terrace to your car parking space

Get in touch with us 👈🏻

Everything from a single source, specially designed for solar solutions for large parking areas. You refinance or counterfinance into the future with your own electricity generation.

Advice and solutions can be found here 👈🏻

Advice and planning including a non-binding cost estimate. We bring you together with strong photovoltaic partners.

Advice and solutions can be found here 👈🏻

Over a thousand specialist articles here on our pages. Numerous figures, data and facts can be downloaded here in many PDFs

If you are looking for a competent and reliable partner for the planning, installation and maintenance of your solar system, then you have come to the right place. On our pages you will find over a thousand specialist articles on the subject of photovoltaics, solar systems and solar roofs. We have also put together numerous figures, data and facts for you so that you can get a comprehensive picture of the possibilities and options.

We are a leading provider of solar solutions in Germany and offer solar consulting, planning and installation of photovoltaic systems. Our many years of experience extends to the conception, planning and implementation of various solar power systems of all sizes. We find the optimal solution for your individual needs – whether for single- or multi-family homes, industrial or commercial operations, agricultural operations or municipal facilities.

In addition to our professional advice, you will find comprehensive information on the subject of solar power and photovoltaics on our website. Through our diverse offering, we would like to give you an overview of the possibilities for using renewable energies. With us you can also get an idea of ​​what is possible with the latest technology - just browse through our example systems!

Solar systems are an environmentally friendly alternative energy source. If you are interested in installing a solar system, contact us for a free, no-obligation consultation. Together we will find the best solution for your needs.

Photovoltaic Library (PDF) – Image: Xpert.Digital / Benvenuto Cellini|Shutterstock.com