Is there a tax for solar panel installation or use?

In this year 2024, the regulations both in Spain and in the EU regulatory framework remain firm in their stance: no taxes are required for the installation or generation of photovoltaic energy.

This policy reflects a continued commitment to the promotion of renewable energy sources, in line with the objectives of sustainability and energy transition. Furthermore, this scenario ensures that, despite possible changes in policy direction, the imposition of taxes on solar energy will remain out of scope, thus respecting the guidelines set by the European Union to protect and promote the use of clean and renewable energies.

This clear definition of regulations provides certainty for individuals and companies looking to go solar, encouraging the development of a greener and more sustainable energy future.

The “Sun Tax”

El “Impuesto al Sol” en España, introducido en 2015, fue una medida que frenó el avance hacia la transición energética, obligando a los propietarios de instalaciones solares a pagar por la energía generada, excepto en casos muy específicos. 

Esto complicó la legalización de instalaciones fotovoltaicas y limitó las compensaciones por excedentes de producción. Sin embargo,en 2018, este impuesto fue derogado, impulsando medidas favorables para la transición energética y facilitando compensaciones por excedentes. 

La derogación del impuesto y la nueva legislación de la UE en 2018 reconocen el derecho a participar en el sector energético, haciendo ilegales las tasas punitivas contra la energía renovable desde 2021. Este cambio normativo ha demostrado ser un gran avance para las energías renovables en España, reflejado en el aumento significativo de la potencia fotovoltaica instalada tras la derogación del impuesto.

ICIO and Municipal Taxes

The costs associated with solar energy are limited to the installation phase, particularly taxes on the necessary administrative procedures, such as obtaining the building permit. These mainly include the Construction, Installations and Works Tax (ICIO) and municipal taxes.

In a move towards the promotion of renewable energy, many municipalities have opted to reduce or even exempt these taxes on solar installations, offering rebates of up to 95% in the case of ICIO and 100% on municipal taxes. These local policies reflect a growing commitment to the promotion of clean and sustainable energy through tax incentives.

Rebates and deductions for solar panels

In addition to the tax incentives applicable to ICIO and municipal contributions, the installation of solar systems can lead to reductions in other taxes. One example is the Property Tax (IBI), where reductions of up to 50% can be achieved in certain localities for several years.

At the national level, there is also the opportunity for a deduction in the IRPF, which can reach up to 60% for homeowners’ associations that opt for solar energy.