ᐅ Photovoltaics – Questions About Taxes and Commercial Classification

Created on: 5 Sep 2019 16:44
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Christian K.
Hello everyone,

We are planning to install a photovoltaic system with a battery storage for our new single-family house. As far as I understand, I should register a small business beforehand so that I can declare value-added tax (VAT) or sales tax. Then, I would need to report the monthly earnings from the photovoltaic system to the tax authorities, but this way I can reclaim the VAT on the purchase costs and depreciate the entire system over 20 years.

We are getting the battery from Sonnen and will sign a contract with Sonnen. This means the surplus energy will be fed into Sonnen’s system and compensated. This should be relevant, but I mention it just for completeness.

Is this correct? Is there anything else I should consider when registering the business, besides being able to declare VAT?

Thanks
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boxandroof
6 Sep 2019 23:26
You don’t need to register a business in any of these cases. This has already been mentioned. You might be referring to notifying the tax office of your entrepreneurial activity, which you must report using a specific form.

The most financially sensible approach is to fully install solar panels on your roof, feed any surplus electricity directly into the grid, and opt out of the small business regulation for five years so that you are eligible for input tax deduction and can reclaim the VAT on your investment.

In the forum mentioned multiple times by others, you’ll also find better tax advice than on a cloud provider’s blog with its own interests. Have you checked the tax information there? Just search—you’ll find everything you need to know. I’m not a tax expert, but some of the information in your source is outdated (e.g., calculation of self-costs) or incorrect. It seems they regularly deal with loss-making systems and present such poor investments as tax-saving models.

Furthermore, the cloud storage issue is not clearly settled among tax professionals. For you, this could mean additional unnecessary consultancy costs, on top of losses from battery storage and possibly the cloud contract, all reducing your profit. Your profit comes solely from the solar panels on the roof. More panels mean more profit; storage and additional equipment mean less profit.

If you have already signed anything, check if you can cancel it.
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Christian K.
7 Sep 2019 10:01
Thank you for the response. I have read the FAQ in the other forum but haven’t gone through all the linked content yet. I spoke with Sonnen because there was a statement that the entire self-consumption (including self-generated electricity) counts toward the free allowance. Only after I specifically asked about this on the phone was it confirmed. Now the offer isn’t as attractive as before, and I have to calculate carefully whether it’s worthwhile. Since the topic of taxes also came up, the advisor sent me a link. Of course, the article is from Sonnen, but it helped me understand the topic better. I will continue to gather information in the other forum, but I now understand quite a bit right away.

Whether the Sonnen tariff is still worth it remains to be seen. Most of the electricity is generated in the summer months, but consumption is lowest then because the heating system only provides hot water and less lighting is needed. In winter, when the photovoltaic system generates hardly any electricity, I need more power.

According to databases, it can be roughly estimated that consumption in summer will be around 2,100 kWh (air-to-water heat pump 600 kWh + 1,500 kWh general electricity). This would leave about 4,500 kWh of the free allowance remaining. In winter, consumption is probably around 5,900 kWh (3,400 kWh for the air-to-water heat pump and 2,500 kWh general electricity). So I would have to pay for an additional 1,400 kWh. Without Sonnen, I would have to purchase 5,900 kWh, or am I mistaken?

What could potentially upset these calculations is if I use something like an air conditioner in the summer or someday charge my car. But in that case, I could simply cancel the tariff. My current questions are:

1. Is the Sonnen Community still worthwhile now? Could it be worth trying and canceling if necessary?
2. If the answer to (1) is no, then my question is about the storage battery. It is often said that it’s not worth it, so I need to read up on this.

I am now viewing the entire situation more critically and would like to thank everyone here for the information and tips. Since I haven’t signed anything yet, I need to continue researching.
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Heinz2k
7 Sep 2019 23:39
A simple calculation with the SonnenFlat 6750. Without taxes, using your numbers (which I find a bit exaggerated) and my system (10 kWp, south-facing, western Saxony).

Without SonnenFlat:

8,100 kWh consumption, realistically about 30% self-produced, equals 5,670 kWh purchased and 2,430 kWh self-consumed.
The system produces around 10,000 kWh per year with a 0.10 cent feed-in tariff, minus the self-consumption equals
7,570 kWh fed into the grid.

5,670 kWh * 28 cents/kWh = ~1,600 € electricity bill
2,430 kWh * 28 cents/kWh = ~680 € saved by self-consumption
7,570 kWh * 10 cents/kWh = ~750 € feed-in tariff payment

Deficit roughly 170 €

SonnenFlat

With Sonnen you get 6,750 kWh for free, so you still have to pay for 1,350 kWh at 23 cents/kWh under the solar tariff

Deficit roughly 310.50 € + 12*20 € (membership fee) = 550 €
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Heinz2k
8 Sep 2019 00:42
The deficit above must, of course, be €850 and not €170. This leaves a benefit of €300 for the solar flat rate. However, this does not take into account the additional investment you have to make for the battery storage.

I would skip it and stick to the principle of keeping it simple.
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Christian K.
8 Sep 2019 11:26
Thank you for the summary. My assumption was similar, although I didn’t factor in a realistic consumption rate of 30%, but rather tried to reach a conclusion based on consumption databases and estimates.

In my opinion, the €300 do not account for the following factors (+ for positive / - for negative)
+ Rising electricity costs
+ Increased depreciation (around €1,000 compared to €500)
- Taxes
- Higher consumption due to air conditioning in summer. Assuming I run the air conditioning with the self-generated electricity, so the share might increase from 30% to 40-50%, then the "flat rate" becomes completely unattractive.

From a purely economic perspective, the risk of gaining no advantage is relatively high. However, I’ve also read that the ecological aspect should be considered. If you have a battery storage system, you use your own electricity at night, even if it’s more expensive. But in return, you avoid coal-based electricity. I’m not saying everyone should worry and therefore get a battery, but it is definitely an argument in favor of storage. We just don’t know yet how highly we should value it, as a battery is not exactly the best ecological choice either.

The fact is—and I thank you all for this—that the solar flat rate is not as profitable as previously assumed. You have pointed out very important aspects to us, and whereas we definitely wanted a battery with the solar flat rate before, it doesn’t seem that way anymore. As I said, thanks again for the "help" and the time taken!
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boxandroof
8 Sep 2019 11:42
Christian K. schrieb:

From a purely economic perspective, the risk of not gaining any benefit is relatively high. However, I have also read that the ecological aspect should be considered.

Counterargument: During the day, you take the surplus solar power from others and store it in your battery with energy losses (and financial losses) to use it yourself at night. But does your increased self-sufficiency currently provide an ecological benefit? I believe it does not, as long as the photovoltaic electricity is consumed during the day as well, and no wind power or similar sources have to be reduced because of it. The battery also needs to be manufactured and eventually replaced.

This discussion is focused purely on the battery storage, not on the flat rate. The latter does not change the physics.

I admit I have not explored the ecological aspect of storage beyond this point. However, adding more solar modules is certainly always beneficial.

Thank you for the feedback on the thoughts about the solar flat rate.

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