In many European countries, including Austria, Germany, Italy, the Netherlands, France, Croatia, Romania, Denmark, Sweden and Finland, reduced VAT rates or even a 0% VAT rate may apply when purchasing photovoltaic systems. However, the conditions differ from country to country. While in Germany, Italy and Romania almost all system components may qualify for tax benefits, in the Netherlands tax advantages apply only to certain components such as solar modules or inverters.

There are also often specific requirements that must be met in order to benefit from these tax reductions. Take Austria as an example: the tax relief primarily applies to solar modules. If you also order inverters, battery storage or accessories together with the solar modules in one order, these may also fall under the tax relief as ancillary supplies. For battery storage, the maximum ratio of storage capacity to module capacity must not exceed 2:1.

Understanding these tax benefits and their requirements can be challenging because the information is often difficult to access. Nevertheless, it is definitely worth checking which tax advantages may be available. We are happy to help you find a suitable and economically attractive solution for your project.

If you have questions or need support, please feel free to call us or contact us using the chat function on our website.

Together, we will find the right solution for your project.

Below is an overview of VAT exemptions and reductions for PV systems in various EU countries:

Germany

In Germany, PV systems may be exempt from VAT under the applicable conditions. The installation of the system and associated components such as solar modules, inverters and battery storage can also fall under this regulation.

Extract from the legislation:

With the Annual Tax Act 2022 (BStBl. I 2023 p. 7), the German legislature added a new paragraph 3 to Section 12 of the German VAT Act (UStG).
Under Section 12 (3) No. 1 sentence 1 UStG, the tax rate is reduced to 0 percent for supplies of solar modules to the operator of a photovoltaic system within the Federal Republic of Germany.
This also includes components essential for the operation of a photovoltaic system and storage systems used to store electricity generated by solar modules.
This applies where the photovoltaic system is installed on or near private dwellings, apartments, public buildings or other buildings used for activities serving the public good within the Federal Republic of Germany.

The adopted package of measures is intended to reduce tax-related administrative barriers to the installation and operation of photovoltaic systems on buildings. Section 12 (3) UStG entered into force on 1 January 2023. The scope of the law is Germany.

Accordingly, the following applies to private individuals: By purchasing your item, you confirm that you are a private individual and that you are purchasing the item for private purposes only. The price applies exclusively to sales to private individuals (0% VAT).

Austria

Austria also supports the installation of PV systems through tax relief. Here, the tax advantage primarily applies to solar modules. However, inverters and other accessories can also be included if they are ordered together. Battery storage may also qualify, provided that the ratio of storage capacity to module output does not exceed 2:1.

Extract from the legislation:

The 2024 Budget Accompanying Act includes VAT relief for photovoltaic systems.
Section 28 (62) UStG 1994 provides that supplies, intra-Community acquisitions, imports and installations of photovoltaic modules are temporarily subject to no VAT from 1 January 2024 (the so-called “zero tax rate” or “genuine VAT exemption”). A prerequisite is that the total bottleneck capacity of the photovoltaic system does not exceed 35 kW (peak) and that the photovoltaic system is operated by the operator on or near certain buildings. A further prerequisite is that no application for an investment subsidy under the Renewable Energy Expansion Act (EAG), Federal Law Gazette I No. 150/2021 as amended, was submitted for the relevant photovoltaic system by 31 December 2023 (regarding the interaction between an application for an investment subsidy and the zero tax rate, as well as the transitional provision under Section 28 (63) UStG 1994 for systems commissioned before 1 January 2024).

For supplies to Austria: Services that do not constitute an end in themselves for the recipient, but rather a means of making optimal use of the supply of photovoltaic modules for operating a photovoltaic system (dependent ancillary services), follow the VAT treatment of the supply of the photovoltaic module under the general principles of a single supply (see UStR margin nos. 346 ff.). This is the case, for example, where the supplier provides and installs photovoltaic modules together with accessories and battery storage. The same applies where components specific to the photovoltaic system, such as inverters, roof mounting systems, energy management systems, solar cables or feed-in sockets, are supplied together with the photovoltaic modules.

Italy

Italy offers a reduced VAT rate of 10% for PV systems and their components. This reduced rate can apply to both private and commercial installations, with Italy placing strong emphasis on expanding renewable-energy capacity.

Netherlands

In the Netherlands, a VAT exemption applies to the purchase and installation of solar systems. The treatment may be limited to certain components such as solar modules and inverters.

France

France offers reduced VAT rates for the installation of PV systems. Although there is no complete exemption, the reduced rates can be significantly lower than the standard VAT rate.

Croatia, Romania, Denmark, Sweden and Finland

These countries also offer various incentives and tax relief for the installation of photovoltaic systems. The exact conditions and level of tax relief vary depending on national legislation and are often intended to encourage greater use of renewable energy.

The range of tax policies across the EU reflects the Union's strong commitment to promoting the transition to renewable energy sources and reducing carbon emissions. Investors and homeowners should review the specific rules in their country carefully in order to make full use of any available tax benefits for PV installations.