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Bauexperte30 Aug 2012 13:54Investing in a Photovoltaic System Can Be Worthwhile
With a solar system on the roof, homeowners can earn money that also attracts the interest of the tax authorities. Certain costs can also be deducted.
A solar system is not only good for the climate. It can also pay off financially for homeowners. The electricity generated is fed into the grid, and homeowners receive payments for it. "You become a business operator for tax purposes if you install a photovoltaic system on your house and feed the generated electricity into the public grid," explains Nora Schmidt-Keßeler from the Federal Chamber of Tax Advisors in Berlin. As a result, solar electricity producers must pay taxes on their income. On the other hand, some costs can also be deducted.
Basically:
Homeowners can plan well with a rooftop solar system because feed-in tariffs are fixed for 20 years. However, the subsidy rates have decreased sharply in recent years. "In 2004, the kilowatt-hour of solar electricity from small rooftop systems was still compensated at 57.40 cents, but currently it is only 18.54 cents," explains Carsten Körnig from the German Solar Industry Association.
At the same time, prices for solar systems have dropped significantly, so the investment generally remains worthwhile. "The production costs of solar electricity are well below consumer electricity tariffs. This creates an incentive to consume the solar electricity produced on one’s own roof," Körnig explains. In purely numerical terms, a photovoltaic system on a single-family home can cover a family’s annual electricity needs.
Trade Tax:
Selling the generated electricity is fundamentally a commercial activity. Nevertheless, "ordinary households usually do not have to pay trade tax," explains Anita Käding from the Federation of Taxpayers in Berlin. This tax only applies above a certain threshold. If the annual profit is below 24,500 euros, according to Käding, no trade tax is due.
Income Tax:
Income tax is payable when the photovoltaic system generates a profit, meaning the income from selling electricity exceeds the expenses of operating the system. "Operating costs include repair and maintenance expenses, insurance fees, and meter rental. Loan interest for financing the purchase of the system also counts as operating expenses," explains Anita Käding.
Value Added Tax (VAT):
Most private operators of photovoltaic systems qualify as small businesses. "No VAT is charged for small businesses if the previous year’s turnover did not exceed 17,500 euros and the projected turnover for the current calendar year does not exceed 50,000 euros," says Nora Schmidt-Keßeler from the Federal Chamber of Tax Advisors. One advantage of the small business status is that operators do not have to deal with some of the complex formalities, explains Schmidt-Keßeler. The disadvantage: small businesses cannot reclaim VAT, for example on the purchase of the photovoltaic system. "Thus, applying the small business regulation could be a bad deal."
Deductible Costs:
Acquisition costs can reduce taxable income. "A photovoltaic system purchased today can be depreciated over 20 years at five percent each year," explains Anita Käding. For example, "if the system costs 10,000 euros, the annual depreciation is 500 euros," Käding says. "These 500 euros plus other operating expenses for the system are claimed as costs that reduce the profit from the photovoltaic system."
Conclusion:
Investing in a photovoltaic system can be worthwhile for homeowners overall, explains Stephanie Zipp from the Consumer Testing Foundation. Especially if the household’s own electricity demand is high. "If you find a good offer, do not hesitate too long," the expert advises.
Source: dpa
Kind regards
With a solar system on the roof, homeowners can earn money that also attracts the interest of the tax authorities. Certain costs can also be deducted.
A solar system is not only good for the climate. It can also pay off financially for homeowners. The electricity generated is fed into the grid, and homeowners receive payments for it. "You become a business operator for tax purposes if you install a photovoltaic system on your house and feed the generated electricity into the public grid," explains Nora Schmidt-Keßeler from the Federal Chamber of Tax Advisors in Berlin. As a result, solar electricity producers must pay taxes on their income. On the other hand, some costs can also be deducted.
Basically:
Homeowners can plan well with a rooftop solar system because feed-in tariffs are fixed for 20 years. However, the subsidy rates have decreased sharply in recent years. "In 2004, the kilowatt-hour of solar electricity from small rooftop systems was still compensated at 57.40 cents, but currently it is only 18.54 cents," explains Carsten Körnig from the German Solar Industry Association.
At the same time, prices for solar systems have dropped significantly, so the investment generally remains worthwhile. "The production costs of solar electricity are well below consumer electricity tariffs. This creates an incentive to consume the solar electricity produced on one’s own roof," Körnig explains. In purely numerical terms, a photovoltaic system on a single-family home can cover a family’s annual electricity needs.
Trade Tax:
Selling the generated electricity is fundamentally a commercial activity. Nevertheless, "ordinary households usually do not have to pay trade tax," explains Anita Käding from the Federation of Taxpayers in Berlin. This tax only applies above a certain threshold. If the annual profit is below 24,500 euros, according to Käding, no trade tax is due.
Income Tax:
Income tax is payable when the photovoltaic system generates a profit, meaning the income from selling electricity exceeds the expenses of operating the system. "Operating costs include repair and maintenance expenses, insurance fees, and meter rental. Loan interest for financing the purchase of the system also counts as operating expenses," explains Anita Käding.
Value Added Tax (VAT):
Most private operators of photovoltaic systems qualify as small businesses. "No VAT is charged for small businesses if the previous year’s turnover did not exceed 17,500 euros and the projected turnover for the current calendar year does not exceed 50,000 euros," says Nora Schmidt-Keßeler from the Federal Chamber of Tax Advisors. One advantage of the small business status is that operators do not have to deal with some of the complex formalities, explains Schmidt-Keßeler. The disadvantage: small businesses cannot reclaim VAT, for example on the purchase of the photovoltaic system. "Thus, applying the small business regulation could be a bad deal."
Deductible Costs:
Acquisition costs can reduce taxable income. "A photovoltaic system purchased today can be depreciated over 20 years at five percent each year," explains Anita Käding. For example, "if the system costs 10,000 euros, the annual depreciation is 500 euros," Käding says. "These 500 euros plus other operating expenses for the system are claimed as costs that reduce the profit from the photovoltaic system."
Conclusion:
Investing in a photovoltaic system can be worthwhile for homeowners overall, explains Stephanie Zipp from the Consumer Testing Foundation. Especially if the household’s own electricity demand is high. "If you find a good offer, do not hesitate too long," the expert advises.
Source: dpa
Kind regards
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