Grants and Aid for Solar Panels

On the path to a more environmentally friendly lifestyle, solar panels emerge as a smart solution for both homes and businesses to access a clean and efficient energy source. However, this transition to solar energy not only signifies a significant environmental commitment but also becomes a strategic financial decision due to the various grants and tax incentives available today. In this article, we review all the existing programs to date, along with the features, conditions, and percentages of each one.

Next Generation Solar Panel Grant

The most well-known grant for the general public is the Next Generation grant, which stood out as a key initiative to promote the adoption of photovoltaic energy in Spain. Although the deadline to apply for these grants concluded in December 2023, the subsidy remains valid for numerous potential beneficiaries who processed their applications before this period ended and eagerly await the realization of the payments.

This financial support for self-consumption was funded by European recovery funds and was an integral part of the Government’s Recovery, Transformation, and Resilience Plan. The program encompassed 6 subprograms, each oriented towards specific sectors and particular technologies:

How long does it take to receive the subsidy for solar panels?

The process to receive payments from the Next Generation subsidies for solar self-consumption involves a waiting period ranging between 18, 20, or even 24 months. In some cases, this period could extend to 3 or 4 years, especially when corrections are needed for information provided during the application.

Currently, numerous applications are in the initial or intermediate stages of the review process, keeping the call active, even though new applications are no longer accepted.

This state program, designed to reduce the cost of solar panel installation by half, required applications to be submitted to the corresponding Autonomous Community before December 31, 2023. The overwhelming number of applications received overwhelmed the capacity of the regional administration, prolonging the time needed for the management and allocation of these grants. As a result, the payment process extends beyond the initially anticipated timeframe, creating a understandable yet anxious wait for those anticipating the benefits of this significant subsidy for solar self-consumption.

Property Tax (IBI) and Construction Tax (ICIO) Discounts for Solar Panels

In the pursuit of a more environmentally friendly lifestyle, discounts on Property Tax (IBI) and Construction Tax (ICIO) for solar panels are granted at the municipal level. Each municipality has the authority to decide whether to apply these discounts to both taxes, one of them, or none. In this context, each municipal entity determines the percentage and duration of the discount it considers most appropriate to incentivize solar panel installation within its jurisdiction.

What is IBI?

The IBI, or Property Tax, is a municipal fee paid annually by owners of real estate, such as homes, commercial premises, garages, among others. The municipality determines the amount of this tax based on the cadastral value of the land and corresponding construction. According to Royal Legislative Decree 2/2004, municipalities are authorized to levy this tax mandatorily, establishing both the amount to be paid and the payment period according to their own criteria. The IBI value is calculated by multiplying the cadastral value of the property by the corresponding tax rate, which generally ranges between 0.4% and 1.3%.

What is ICIO?

The ICIO, or Construction, Facilities, and Works Tax, is a municipal tax obligation applied when construction, installation, or works requiring prior documentation take place, associated with construction activities. Each municipality sets the amount to be paid and corresponding deadlines, always with the limitation that the tax cannot exceed 4% of the total budget. This tax is calculated on the real and effective cost of construction when initiating the process of applying for the construction license. In the context of solar panel installation, the ICIO generally represents 4% of the total installation cost and falls on the person covering the expenses of the work, whether or not they are the property owner.

What is the Percentage of Discount for IBI and ICIO for Solar Panels?

The IBI discount for solar panel installation varies significantly, ranging from 10% to 50%, with durations between 1 and 5 years. This IBI reduction can have a substantial impact on taxpayers’ financial burden, providing considerable relief. In some cases, the discount can reach up to 95%, depending on the specific municipality where the installation takes place. This reduction in IBI is a key measure to encourage and support the adoption of solar energy at the local level.

Regarding ICIO, its discount is equally relevant, ranging from 10% to 95%, depending on the municipality. This fiscal benefit is applied to the full tax amount and is designed to encourage the implementation of solar energy projects. Like in the case of IBI, the extensive variety of municipalities offering these discounts underscores the diversity of fiscal incentives available for those opting for solar energy. It is essential to review the corresponding municipal regulations for detailed information on specific discounts in each location.

How to Obtain the IBI and ICIO Discounts for Solar Panel Installation?

To apply for IBI and ICIO discounts for solar panel installation, it is essential to follow a specific procedure that varies according to municipal regulations. In general, the discount is usually requested, meaning it is not applied automatically and needs to be requested. Here are common options to carry out this request:

Electronic Submission: Typically through the Municipal Electronic Platform. You may need an authenticated access, such as a Digital Certificate, Electronic ID, or Secure User Key. Some municipalities also allow electronic processing via email, although in certain cases, your presence at the municipal registry may be required to sign the application.
Registry Submission: You can submit the application to any valid registry, whether at the City Hall, Government Delegation, Civil Registry, Post Office, among others.
In-Person Submission: Applicable only to individuals, this method involves requesting a prior appointment, usually at the Taxpayer Assistance Offices of the City Hall.

For accessing ICIO discounts, the process is similar to IBI. It is crucial to be aware of the specific regulations of your municipality and comply with the established requirements. Since each municipality has particular conditions, detailed information is recommended, and in case of doubts, consulting with a professional is advisable.

At Ubora, we have a professional team that assists you in gathering the necessary documentation specific to your municipality and in processing the application. Our goal is to provide comprehensive guidance throughout the process, ensuring you efficiently and seamlessly obtain the benefits of these aids.

Deduction in Income Tax (IRPF) and Corporate Tax (IS) for Solar Panel Installation

The deduction in Income Tax for the installation of solar panels implies that by incorporating photovoltaic solar panels into your home or community of property owners, you can benefit from a reduction ranging from 20% to 60% of the total amount invested in improving the energy efficiency of the residence or building. In practical terms, this means that for every 5 euros invested in photovoltaic installations, you could deduct at least 1 euro in your Income Tax Declaration. This savings adds significantly to other grants and aids we have discussed, contributing to substantially reduce the initial cost associated with installing solar panels in your home.

Additionally, for businesses, the installation of solar energy allows access to a deduction in Corporate Tax (IS) of up to 5% of the cost of the photovoltaic installation, with a maximum investment limit of €500,000.

Requirements for claiming the deduction in IRPF and IS:

To access the deduction in IRPF, it is necessary to have an Energy Efficiency Certificate. This certificate, issued by a qualified professional, reflects the decrease in heating and cooling demand indicators compared to the situation prior to the installation of the photovoltaic panels.

A specialized technician will evaluate the specific characteristics of the energy consumption of your home, assigning it a rating ranging from A (optimal efficiency) to G (lowest possible efficiency). At Ubora, we take care of managing this certificate for you, ensuring that your only focus is on enjoying the energy savings achieved.

For the IS deduction, it is necessary for the installation to be operational from the year 2023 onwards. Additionally, the total average workforce of the company compared to the previous twelve months must remain constant during the following 24 months from the start of the tax period in which the acquired elements come into operation.

Eco Housing Plan for Solar Panel Installation

The Eco Housing Program, supported by the Andalusian Regional Government with an allocation of 614 million euros, aims to revitalize buildings, especially residential ones, to enhance the energy efficiency of homes. This program provides grants that can cover up to 40% of the total cost of installations, with a limit of €3,000.

In addition, photovoltaic installations are eligible to receive subsidies under the Eco Housing Aid Plan, as long as the overall intervention in the building meets the established percentages related to non-renewable energy consumption and/or the annual energy use of heating and cooling in the residence.

Who can apply for this aid?

The benefits of this program are available to both individual owners of residential buildings and property communities located in the Autonomous Community of Andalusia. Additionally, groups of property communities and cooperative societies also have the possibility to apply for these grants.

Requirements to qualify for the Eco Housing plan

To access the Eco Housing Plan aids in Andalusia, certain requirements must be met. Applicants, whether a duly constituted legal entity or a tenant, must have the corresponding authorization to carry out the works in the homes, which must be their habitual residence.

Regarding eligible actions, a minimum 30% reduction in traditional energy demand or a 7% decrease in annual heating and cooling demand is required.

With Ubora, when installing solar panels, not only do you save significantly on your energy consumption, but we also manage all available aids for you. Our team will assist and advise you throughout the process to ensure the maximum possible return on your initial investment. For more information, send us a message through our contact form or call us at +34 683 300 529.

If you want to learn more about subsidies and aids for solar panels, take a look at this video on our YouTube channel: