What tax benefits does an investment in a photovoltaic system bring me?
December 6, 2023 | 40,00 EUR | answered by Georg Nitsche
Dear Tax Advisor,
My name is Anna Schröder and I am currently considering investing in a photovoltaic system. I have read that there can be tax benefits, but I am unsure if such an investment would be worth it for me.
Currently, I still get my electricity from the public grid and pay a high monthly electricity bill. I am environmentally conscious and therefore interested in using renewable energy sources. Additionally, I have heard that a photovoltaic system can lead to long-term savings.
However, I am concerned that the upfront costs for such a system are very high and I am not sure how this investment would impact my taxes. I wonder if there are any tax incentives or depreciation options that could help me reduce the costs of the system.
So my question to you is: What tax advantages would an investment in a photovoltaic system bring me? Are there ways to deduct the acquisition costs from my taxes or benefit from tax breaks? How would such an investment affect my income tax?
I would be very grateful if you could provide me with more detailed information on this matter so that I can make an informed decision.
Thank you in advance.
Sincerely,
Anna Schröder
Dear Mrs. Schröder,
Thank you for your question regarding the tax benefits of investing in a photovoltaic system. It is understandable that you are unsure whether such an investment is worthwhile, especially considering the high acquisition costs. I will now explain in detail the tax advantages that a photovoltaic system can offer.
First of all, it is important to know that a photovoltaic system is considered as business assets if you partially or fully feed the generated electricity into the public grid for a fee. This means that the acquisition and operating costs are tax deductible. You can deduct the costs of the system through the depreciation options provided by the Income Tax Act (EStG). Depreciation is usually done over a period of 20 years.
Furthermore, as the operator of a photovoltaic system, you can reclaim the value-added tax on the acquisition and operation of the system as input tax. This can lead to significant tax savings. Additionally, you can declare and tax the feed-in tariffs you receive for the electricity fed into the grid as income.
Moreover, there are various funding opportunities and tax benefits that can assist you in investing in a photovoltaic system. For example, you can benefit from government funding programs such as the KfW funding program or the Market Incentive Program. These programs offer financial support for the purchase and installation of photovoltaic systems.
Overall, investing in a photovoltaic system can be profitable, both environmentally and from a tax perspective. However, it is advisable to seek thorough advice beforehand to fully understand and optimize the tax aspects.
I hope that this information has been helpful to you and I am available for any further questions.
Best regards,
Georg Nitsche
