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Are there subsidies for solar energy for self-consumption?

Solar energy has become enormously popular over time. Self-consumption is today a solution used by thousands and thousands of users to produce their own electrical energy and reduce electricity consumption from the general network or to be self-sufficient. The governments of the different countries are encouraging this type of energy for individuals, which is also clean and renewable. Therefore, for the majority to have access to solar energy, there are several grants for solar energy. These are mainly of two types: the subsidies for solar energy that apply on state taxes and those that apply about the price of the installation.

Next, we explain what are the subsidies for solar energy that exist and how you can apply for them. Keep reading this article for more information.

Solar energy subsidies: What help can I benefit from?

As we explained in the introduction, subsidies for solar energy can be divided into two types, those that are applied to taxes and those that are applied to the price of the installation —in general, we will have to choose between one or the other, depending of each autonomous community. Both types of subsidies are intended to encourage the consumption of solar energy to reduce the carbon footprint. In Spain, the value of these subsidies for the years 2021-2023 has recently been approved in a total of €660 million what can they be expandable up to 1,320 million euros —as approved in June 2021 by the Council of Ministers at the proposal of the Ministry for the Ecological Transition and the Demographic Challenge in a royal decree—. These aids are articulated in 6 programs that will be distributed as follows:

  • Self-consumption and storage in the residential, public and third sector.
  • Self-consumption and storage in the services sector.
  • Self-consumption and storage in other productive sectors.
  • Incorporation of storage in existing self-consumption in other economic sectors.
  • Air conditioning and DHW obtained with renewables from the residential sector.
  • Incorporation of self-consumption storage in the residential, public and third sectors.

These 6 programs are part of 3 main sectors, depending on which the total amount will be distributed. These are the aid for self-consumption facilities (a maximum of 900 million euros), the storage behind the counter (mainly batteries, with a maximum of 220 million euros) and the air conditioning with renewable energy (maximum 200 million euros). These grants will be managed by the autonomous communities, who will designate the final budget in each case.

Solar energy subsidies: tax reductions

The purpose of this type of subsidy is to carry out a reduction in IBI and ICIO taxes. These are subsidies that consist of reductions in the main property taxes.

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IBI tax discounts

The IBI is the mandatory Real Estate Tax that every owner of a home, premises or parking space must pay annually. The bonuses, in this case, can reach the reduction of 50% of the value of the tax in those buildings in which a solar thermal or photovoltaic installation has been carried out. This reduction is established in the Article 74 of the Law Regulating Local Treasury. The duration of this bonus varies depending on each municipality.

ICIO tax credits

The ICIO is the Tax on Installations, Constructions and Works. It is a tax that must be paid by any subject of an installation or construction —regardless of whether or not they own the property— as long as the presentation of a responsible declaration or prior communication is required, as is usually the case with solar installations —as as reflected in article 103 of the Local Treasury Regulatory Law—. The discounts, in this case, contemplate a reduction of said tax of up to 95%depending on each municipality.

Elimination of sun tax

The sun tax was repealed on October 9, 2018, after the approval of Royal Decree 15/2018. This tax required every citizen with a solar self-consumption installation to pay a fee for being connected to the electricity grid to help maintain the electricity system.

Solar energy subsidies: reductions in the budget of solar installations

When we talk about this bonus we are referring to the grants that are awarded to contribute to the reduction of the total price of a solar installation. These bonuses can lower the total cost by up to 50% or more. They are managed by each autonomous community. Its purpose, as we indicated, is to encourage the use of solar energy and make solar self-consumption a reality within everyone’s reach. An example of these are the Valencian Community solar energy subsidies. In the case of the 2020 aid, these covered up to 65% of the investment made, with a maximum of 100,000 euros per project.

How to apply for subsidies for photovoltaic solar energy: Requirements and procedure

Subsidies for solar photovoltaic or solar energy are intended for those who wish to self-consume part or all of the energy in a property. Therefore, for this it is necessary to make an application that must be completed depending on the body to which it is addressed and the discount to which you want to apply:

  • To process the reduction of the Real Estate Tax: Check with each town hall.
  • To process the reduction of Tax on Installations, Constructions and Works: Check with each town hall.
  • To process the reduction in the installation budget: Consult in each autonomous community.

Remember that the forms, in each case, have limited deadlines to request aid. Therefore, it is important that you pay attention to them before starting the installation. In many cases, it will also be an essential requirement not to have previously applied for any subsidy —most of these are not cumulative—. Thus, the applicant may only request one subsidy for photovoltaic solar energy per home.

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