Aid and subsidies for solar panels in Spain 2023
As we have seen in the article on "sun tax", Royal Decree 244/2019 is the regulation that we have in force today and that promotes self-consumption in the country. Fortunately! 😃 Since until a few years ago it hasn't been like this.
Furthermore, the cost of solar energy in Spain is currently helped by subsidies and incentives from the Government and the Autonomous Communities. For this reason, today we will dedicate ourselves to answering all your questions about subsidies for solar panels in Spain in 2023. Let's start! 🔛
1. Subsidies and aid from the Government of Spain
What subsidies or aid are there to install solar panels in 2023?
On June 29, 2021, the Council of Ministers, at the proposal of the Ministry for the Ecological Transition and the Demographic Challenge, approved Royal Decree 477/2021, approving the direct concession to the Autonomous Communities and cities of Ceuta and Melilla for aid for the execution of various incentive programs linked to self-consumption and storage with renewable energy sources, as well as the implementation of renewable thermal systems in the residential sector, within the Plan of the Recovery, Transformation and Resilience (grants known as Next Generation European funds).
In order to promote the deployment of renewable energies, both thermal and electrical, in the different consumer sectors, the Royal Decree establishes the regulatory bases for the direct granting of aid to the Autonomous Communities and cities of Ceuta and Melilla, as well as the approval of the six incentive programs for self-consumption, storage and thermal uses of renewable energies:
- Incentive program 1: realization of self-consumption facilities, with renewable energy sources, in the services sector, with or without storage.
- Incentive program 2: creation of self-consumption facilities, with renewable energy sources, in other productive sectors of the economy, with or without storage.
- Incentive program 3: incorporation of storage in self-consumption facilities, with renewable energy sources, already existing in the service sector and other productive sectors.
- Incentive program 4: realization of self-consumption installations, with renewable energy sources, in the residential sector, public administrations and the third sector, with or without storage.
- Incentive program 5: incorporation of storage in self-consumption facilities, with renewable energy sources, already existing in the residential sector, public administrations and the third sector.
- Incentive program 6: implementation of thermal renewable energy installations in the residential sector.
What is the subsidy of the European funds for the installation of panels?
The initial budget of 660 million euros from the Recovery and Resilience Mechanism can be extended to 1,320 million euros, depending on how the Autonomous Communities commit their original funding.
For June 2022, the Ministry for the Ecological Transition and the Demographic Challenge (MITECO) has increased by 505 million euros the Program of incentives for self-consumption, energy storage and thermal installations with renewables for the Autonomous Communities of Andalucía, Aragón, Balearic Islands, Castilla y León, Castilla-La Mancha, Catalonia, the Valencian Community, Galicia, Madrid and the Basque Country, since they have committed the Program funds they originally received and have requested an extension.
Annex III specifies the "maximum eligible costs, reference costs and amount of aid". The subsidy of European aid for the installation of photovoltaic solar panels and batteries is as follows:
Incentive Programs 1 and 2:
- Self-consumption photovoltaic installation: €460 - €1,188/kWp (15 - 45% aid on eligible cost)
- Incorporation of self-consumption storage: €200 - 700/kWh (45 - 65% aid on eligible cost)
Incentive Program 3:
- Incorporation of self-consumption storage in existing facilities: €200 - 700/kWh (45 - 65% aid on eligible cost)
Incentive Program 4:
- Self-consumption photovoltaic installation: €300 - €600/kWp
- Incorporation of self-consumption storage: €140 - €490/kWh
Public administrations and third sector:
- Self-consumption photovoltaic installation: €500 - €1,000/kWp
- Incorporation of self-consumption storage: €140 - €490/kWh
Incentive Program 5:
- Incorporation of self-consumption storage in existing facilities: €140 - €490/kWh
When are grants from European funds received? How long does it take to give the solar panel subsidies?
The Ministry for the Ecological Transition and the Demographic Challenge, through the IDAE (Institute for Energy Diversification and Saving), coordinates and monitors the aid and subsidies, which are managed by the Autonomous Communities (direct beneficiaries).
The responsible body of each Autonomous Community has a maximum period of six months from the moment of the request to accept or reject it. In the case of acceptance, you have a maximum period of 18 months to grant the subsidy for the installation of solar panels for self-consumption.
The grants are awarded by simple concurrence, which means that the applications are attended in order of presentation until the funds are exhausted.
When do the solar panel subsidies end?
The aid programs approved by RD 477/2021 are valid until December 31, 2023 or until the funds are exhausted.
2. Other regional aid
Some examples of other aid from the Autonomous Communities are:
In the case of Murcia, there is a discount in the IAE (Tax on Economic Activities) of 50%, whose requirements are for taxpayers who are taxed by municipal quota, who use or produce energy from renewable energy installations or cogeneration systems.
Barcelona also offers aid in the Tax on Economic Activities (IAE) of a 50% discount on the payment of the tax quota to taxpayers who install systems for the electrical use of energy from the sun, for two years in the exercise of the activities subject to the tax.
In addition, the Andalusian Energy Agency has published in the Official Gazette of the Andalusian Government, Resolution of May 10, 2021, the reopening of incentives for energy improvement projects with solar technology, within the Program for Sustainable Energy Development Andalusia, co-financed with FEDER funds.
You can see the particular case of your Autonomous Community here. 👀
3. Tax deduction
How to deduct taxes with solar panels?
There are discounts with which you can make a self-consumption installation profitable and save on the Tax on Real Estate and on the Tax on Constructions, Installations and Works, whose discounts and duration depend on each Autonomous Community or City Council.
Aid to make your solar panel installation profitable.
The IBI bonus varies in terms of the percentage of discount granted, the years of duration of the reduction, its uses and limitations.
An example could be 50% for 3 years. This means a discount of 50% on the full amount of the tax during the 3 tax periods following the completion of the installation and which includes those installations subject to the horizontal property regime, depending on the use of the property (residential or other than residential) and whether it is intended for individual or collective self-consumption.
The ICIO tax credit also varies according to the percentage of reduction granted.
For example, a 95% discount on the fee for constructions, installations or works consisting of the installation of systems for the use of solar energy for residential self-consumption.
How much do solar panels deduct in personal income tax? How much does the Treasury return for solar panels?
At the moment, there is no deduction for said investment in the full autonomic income tax quota in all the Autonomous Communities. However, some of them, such as the Canary Islands, the Valencian Community and Murcia, for example, do apply personal income tax deductions to encourage citizens to invest in renewable energy.
This deduction is applied for: investments in electrical energy self-consumption facilities, for energy rehabilitation works and reform of the habitual residence, and destined to the use of certain renewable energy sources in the houses or buildings where they are located.
Am I entitled to personal income tax deductions for installing solar panels in my home?
On 6 October 2021, the urgent measures approved by the Government to promote building renovation activity in Royal Decree-Law 19/2021 came into force. Among them is the IRPF deduction for the installation of solar panels or other renewable energies in homes. This change in the regulations is part of the MITECO's Recovery, Transformation and Resilience Plan.
- Deductions of 20% of the investment
If you carried out energy efficiency improvement works in your main residence or in one that you had rented as such, you could access a deduction of up to 20% of the IRPF. In the case of a rented property, it had to be rented before 31 December 2023.
To qualify for this deduction, the work had to be carried out between 6 October 2021 (the date on which these measures came into force) and 31 December 2022.
The maximum amount that could be deducted was €5,000 per year and you had to prove that the works had reduced heating and cooling demand by at least 7% through the corresponding indicators of the energy efficiency certificate of the house, which had to be issued by the competent technician once the works had been completed.
The deduction would be applied in the tax period in which the energy efficiency certificate issued after the completion of the works was issued.
- Deductions of 40% of the investment
As in the previous case, you could increase the IRPF deduction to 40% by demonstrating through the corresponding certification that you had managed to reduce at least 30% of non-renewable primary energy consumption. You were also eligible for this deduction if you had managed to improve the energy rating of the house to obtain an energy class "A" or "B".
The deadlines for carrying out the works were the same as in the previous modality, until 31 December 2022. In the case of rental housing, you had to rent it before 31 December 2023. And the maximum base on which the deduction was applied in this modality amounted to €7,500 per year.
As in the previous case, the deduction would be applied in the tax period in which the energy efficiency certificate was issued after the works.
- Deductions of 60% of the investment
If in your case you are trying to carry out refurbishment work to improve the energy efficiency of residential buildings, the applicable deduction could be up to 60% of the investment. To do so, you will have to prove, through the energy efficiency certificate, a reduction in non-renewable primary energy consumption of at least 30%. Another possibility is to improve the energy rating of the building to obtain an energy class "A" or "B".
The deadline for carrying out the works in this case is extended compared to the two cases seen above, until 31 December 2023. The deduction will be applied in the tax periods 2021, 2022 and 2023.
The maximum deductible base for this type of deduction is €15,000 per year and you will also be able to deduct the investment in the following four tax years, without the cumulative base of the deduction exceeding €15,000 in any case.
What expenses can be deducted?
The Royal Decree states that the deductible expenses are those necessary to carry out the work:
- Professional fees
- Costs of drawing up technical projects
- Works management
- Cost of execution of works or installations
- Investment in equipment and materials and other expenses necessary for their development.
- Issuance of the corresponding energy efficiency certificates
The Royal Decree also indicates certain considerations on non-eligible aspects:
- When the work is carried out in the parts of the dwellings affected by an economic activity; or to parking spaces, storage rooms, gardens, parks, swimming pools and sports facilities and other similar elements.
- Costs relating to the installation or replacement of equipment using fossil fuels will not be included.
Compatibility with other measures
The IRPF rebate is compatible with other subsidies for which you are eligible.
For more details, you can always consult the page of the Tax Agency of your Community. 👁️🗨️
As we can see, there are several options offered to citizens to significantly reduce their electricity bills and pollutant emissions from their homes by using solar energy on their roofs.
Every month that you postpone the installation of solar panels is another month of much higher electricity bills than it would be by switching to solar self-consumption. You can start with a first step and get quotes from installation companies in our network.
You can also take a look at our related blog articles. At Quiero Sol we want to help you take advantage of all the benefits and advantages of solar energy in your city, a clean and renewable energy obtained directly from the sun's radiation. ☀️🤩
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