Solar PV and tax in Germany 2026: what is exempt and what remains
A 10 kWp system for €15,000 carries no €2,850 of VAT, and its feed-in payment of €665 a year is free of income tax. The limits are 30 kWp per unit.
Checked by Radif Partners · Editorial policy · How we calculate
What the zero VAT rate and tax exemption mean for you
VAT saved
€2,850
| VAT on purchase and installation | 0 % |
| Income tax-free earnings | yes, up to 30 kWp per unit |
| Profit calculation needed | no |
Two provisions have made rooftop solar on homes almost invisible for tax purposes in Germany. Under section 3 no. 72 of the Income Tax Act (EStG), income and withdrawals from solar PV systems on, at or in buildings are exempt from income tax if the installed gross capacity recorded in the Market Master Data Register (Marktstammdatenregister) is no more than 30 kWp per residential or commercial unit and no more than 100 kWp in total per taxpayer. If only such exempt income arises, no profit has to be calculated. Under section 12(3) of the VAT Act (UStG), the supply of panels, essential components and batteries, and their installation, are taxed at 0% if the system is installed on or near a dwelling; up to 30 kWp in the register this condition is deemed met. For a 10 kWp system at an assumed €15,000, that means €2,850 less than at the standard rate of 19 %, and the feed-in payment of €665 a year appears in no tax return. Something only needs declaring above the limits or if you opt out of the small business scheme.
Two taxes, two provisions
A solar PV system raises two tax questions that are often mixed up. The first concerns the purchase: is VAT charged on panels, inverter, battery and installation? The second concerns operation: are the feed-in payment and the power you use yourself income? For both, the legislator has created exemptions that set everything to zero for most homes. This page reads the provisions in their wording and uses the mini calculator above to show what they mean for your quoted price. It does not replace tax advice.
On purchase: 0% under section 12(3) UStG
Section 12(3) of the VAT Act reduces VAT to 0% for the supply of solar panels to the operator of a PV system, including the components essential for running it and batteries, and for installation. The condition is that the system is installed on or near private homes, dwellings, or public and other buildings used for activities serving the common good. If the installed gross capacity recorded in the Market Master Data Register is no more than 30 kWp, the condition is deemed met.
| Item (assumed) | net | VAT at the standard 19 % | under section 12(3) UStG |
|---|---|---|---|
| 10 kWp system with installation | €15,000 | €2,850 | €0 |
| battery, added later | €6,000 | €1,140 | €0 |
| total | €21,000 | €3,990 | €0 |
Two conclusions follow directly from the wording. First, the rule also covers a battery added years after the system, since batteries are named explicitly. Second, a plug-in solar device (Steckersolargerät) run at a dwelling is covered too; it stays far below the presumption limit. Above 30 kWp the zero rate is not ruled out, but the presumption falls away: you must then show that the system is installed at one of the buildings named.
In operation: exempt under section 3 no. 72 EStG
Under section 3 no. 72 of the Income Tax Act, income and withdrawals connected with running solar PV systems on, at or in buildings, including outbuildings, are exempt if the installed gross capacity in the Market Master Data Register is up to 30 kWp per residential or commercial unit. On top of that, a ceiling of 100 kWp applies to all systems of one taxpayer or partnership. Income means the feed-in payment: for the 10 kWp system at the German average, €665 a year at the Federal Network Agency rate of 7.70 ct/kWh, or €13,309 over 20 years. Withdrawals are the power you use yourself.
| Residential or commercial units | exempt capacity |
|---|---|
| 1 | 30 kWp |
| 2 | 60 kWp |
| 3 | 90 kWp |
| 4 | 100 kWp |
Perhaps the most important sentence comes at the end of the provision: if only exempt income arises from the activity, no profit has to be calculated. For a system within the limits there is therefore no cash-basis profit statement and no depreciation, and the payment does not appear in the income tax return. Conversely, none of the system's costs can be deducted.
What still needs declaring
Systems above the limits
If a system exceeds 30 kWp per unit, or all systems together exceed 100 kWp, the exemption does not apply. Payment and withdrawals then count as business income, a profit must be calculated, and costs such as depreciation reduce it. How much tax results depends on your personal rate, so this page does not calculate it.
VAT on exported power
Anyone supplying power to the grid for payment is a business for VAT purposes. Private operators are as a rule small businesses under section 19 UStG and charge no VAT. Opting out used to be common in order to reclaim the input VAT on the purchase. With 0% on purchase there is no such input VAT any more; opting out would only bring advance returns and VAT on the payment.
Capacity in the register
Both exemptions refer to the gross capacity in the Market Master Data Register, so correct and timely registration matters for tax as well; how it works is under Market Master Data Register, and for plug-in devices under register plug-in solar.
What this means for your sums
For a home system up to 30 kWp per unit, calculate with the net price and no tax on the returns. That is how the solar PV calculator and solar PV cost work. If your quote shows VAT although the system stays below 30 kWp and is installed at your home, ask why.