Germany to remove tax hurdles to rooftop solar expansion

The German government on Wednesday approved a draft law to remove tax and bureaucratic hurdles to the installation of small solar systems on residential and commercial properties in a further effort to promote the expansion of renewable energy.

The new amendments provide for the exemption of photovoltaic (PV) systems on single-family houses and commercial properties of up to 30 kWp from an income tax. For multi-family and mixed-use buildings, the exemption will apply to solar plants of up to 15 kWp per residential or commercial unit, but only up to 100 kW per taxpayer.

Until now, the benefit applied only to systems of up to 10 kWp.

Additionally, the abolition of the so-called 70% rule for solar systems of up to 25 kW planned for January 1, 2023, will be brought forward and will apply to all new systems put into operation after September 14. Previously, operators of such PV plants had to limit the active power feed-in of their installation to 70% or equip their system with a control device.

The 70% rule will be removed also for all existing PV systems with a capacity of up to 7 kW.

The finance ministers of the states of North Rhine-Westphalia, Hesse, Baden-Wuerttemberg, Bavaria and Schleswig-Holstein welcomed the planned changes. In a joint statement published on Wednesday, they expressed their satisfaction that the federal government is tackling this important issue. Simple rules and less bureaucracy will support those active for climate protection and energy independence, they said.

The aforementioned changes are part of a set of measures that the German government plans to take in a bid to spur the deployment of more renewable energy and cut gas consumption in the country in the winter seasons 2022/23 and 2023/24. Among the measures is also a plan for an additional 1.5-GW solar tender, a so-called "special crisis tender", which is scheduled to take place on January 15, 2023.

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