In response to the energy crisis, the German government plans to implement support measures for tax relief for small photovoltaics. This time, the tax break is aimed at supporting PV systems up to 30 kilowatts.
In mid-September, the German government approved a measure in its annual tax bill for 2022: from the beginning of 2023, the income tax on household photovoltaics, as well as the value-added tax on photovoltaic systems in households and public buildings, will be abolished.
Specifically, the measure applies to single-family homes, commercial properties and buildings used for activities of public interest up to 30 kilowatts, and multi-family and mixed-use properties up to 15 kilowatts.
Since the import procurement and installation of photovoltaic systems and energy storage systems for houses and apartments will no longer be subject to VAT, this will help simplify the process. Previously, German household photovoltaics needed to apply for the "Small Business Regulations" to deduct the 19% value-added tax, and the process was relatively cumbersome.
Before the household photovoltaic income was included in the personal income of residents, the income tax rate usually ranged from 14% to 45%. After the cancellation, the economy can be improved.
Calculated based on the average annual personal income of German residents of 50,000 euros, the income tax rate is 24%, the power generation hours of the 10kW system is 900 hours, and 30% of the power generation is sold at the FIT price of 0.08 euros/kWh, and the pre-tax annual income is calculated. About 216 euros, while tax-free saves more than 50 euros.
It is speculated from the module export data that the demand for photovoltaic modules in Germany has more than doubled year-on-year since this year, while the installed capacity in Germany from January to July 2022 was 3.68GW, an increase of only 16% year-on-year.
It is expected that there will be a rush to install photovoltaic installations in Germany in the fourth quarter, and the annual installed capacity will reach about 10GW, nearly doubling year-on-year. It is also expected to maintain a growth rate of about 50% in 2023. In this context, export links such as integrated components and inverters are expected to fully benefit.