What can I deduct from my income tax if I install solar panels on my house?
The Valencian Community has established deductions for people who invest in solar energy.
How much are the personal income tax deductions for installing solar panels in the Valencian Community, how do you apply for the deduction, and what documentation is required? If you are a regular resident of the Valencian Community, this is of interest to you. Here we explain it to you.
The time has come to switch to solar energy. We already have an increasingly favourable regulatory context for photovoltaic self-consumption. We can also see that more and more autonomous communities are committed to promoting solar energy through grants and subsidies for installing solar panels. And to this, we must add the municipalities that are facilitating the energy transition through rebates on IBI and ICIO.
However, there are autonomous communities that go a step further in promoting the energy transition. We are talking about the Valencian Community, which since January this year, has allowed taxpayers to deduct 40% of the amount invested in installing solar panels in their principal residence or in collective installations in the building where it is located.
Which photovoltaic installations can be deducted from the IRPF?
All those self-consumption installations are carried out in your principal residence or in collective installations of the building where you live.
But what is a principal residence?
A principal residence is a home where you have lived for more than 3 years and where you are registered as a resident in the town hall ( el Padron).
Photovoltaic installations cannot be linked to the exercise of economic activity. Nor can those installations that are of an obligatory nature be eligible for the deduction.
Specifically, the purposes for which the installations must be used in order to qualify for the deductions are as follows:
- Installations for self-consumption of electrical energy (self-consumption electrical energy supply modality).
- Installations for the production of thermal energy from solar energy, biomass or geothermal energy for the generation of domestic hot water, heating and/or air conditioning.
- Installations for the production of electrical energy from solar photovoltaic and/or wind energy for the electrification of dwellings isolated from the electricity grid. This, provided that connection to the grid is technically, environmentally and/or economically unfeasible.
Who can claim the deduction?
Any taxpayer who installs self-consumption or use of renewable energies in their principal residence in the Valencian Community and who meets the established requirements.
What requirements must I meet?
To access these deductions, you must meet the following requirements:
- That it is a habitual residence, as indicated in the state regulations governing Personal Income Tax, owned by the taxpayers themselves who are claiming the deduction.
- For shared installations with legal coverage, in groups of dwellings under the horizontal property regime, the deduction may be applied to each owner individually, according to the coefficient of participation that corresponds to them and complying with the requirements.
- In order for you to be able to deduct, you need the prior recognition of the competent, autonomous administration. In this case, it is the Valencian Institute for Business Competitiveness (IVACE), which is responsible for issuing the corresponding accreditation certificate.
- Finally, the installations must be carried out by installation companies that meet the regulatory requirements.
How much can I deduct?
You will be able to deduct 40% of what you invest in the aforementioned installations in your principal residence.
You can also deduct 20% if you install solar panels in your second home, as long as it is not linked to any economic activity.
However, this deduction has a maximum annual base of 8,000 euros. And if you receive a public subsidy for your photovoltaic installation, the amount subsidised will not be eligible for deduction.
Importantly, this limit applies per home and year for all taxpayers living in the same home.
And in the event that you request financing from a bank, the capital amortisation of each year will be considered as part of the deduction. What you will not be able to include is the interest charged by the bank.
IMPORTANT: The aid is a deduction; it is not a direct aid that gives money; that is to say, they do not give you 8.000 €, but it is money that you are allowed to deduct from the taxable base of your income.
When can I claim the deduction?
When you have made the investment, from 1 July 2022, at any time of the year, you can apply for the accreditation certificate.
Where do I apply for it?
You can download the standard application form from the IVACE website.
You can apply in person at the IVACE headquarters or in the forms provided in the Common Administrative Procedure of Public Administrations.
You can also submit the application at the IVACE electronic registry.
What documentation must I provide?
In addition to the application, you must provide documentation typical to all applicants, as well as other specific documentation according to the typology of the installation.
For all applicants
Invoices for the installation refer to the applicant.
Proof of payment (by card, transfer, cheque or deposit), referring to the applicant.
Photographs of the installation and of each element of which it is composed.
Cadastral record of the property, either through the Electronic Headquarters of the Cadastre or by providing the cadastral reference.
Certificate of habitability, municipal certificate or equivalent for dwellings built on non-urban land (both developable and non-developable).
For collective installations, the declaration of the administrator or president with the list of owners who have participated in the investment and their percentage of participation.
For buildings constructed after 2006, a copy of the building permits application or any other document that accredits the date of construction of the building or that the building is outside the scope of application of the Technical Building Code (CTE).
When an obligatory installation exceeds the requirement, an explanatory document signed by a competent technician or installation company compares the installation carried out with the minimum required for compliance with the CTE, both in technical and economic terms and justifies the overinvestment incurred.
For each type of installation
For self-consumption installations.
- Certificate of the individual installation issued by the autonomous administration.
- Technical data sheet or characteristics sheet from the manufacturer of the leading equipment.
Thermal energy production installations.
- For all energy sources: Technical data sheet or characteristics sheet from the leading equipment manufacturer.
- For thermal solar energy installations: copy of the certification resolution of the collector or prefabricated solar system used in a current state; or indicate on the application form the certification password of the equipment for subsequent verification by the IVACE.
Installations for the production of electrical energy isolated from the grid.
- Certificate of the individual installation issued by the autonomous administration.
Accreditation of the non-viability of connection to the electricity grid, based on the notification from the electricity distribution company where the conditions for the connection of the supply are established. - Technical data sheet or characteristics sheet from the manufacturer of the leading equipment.
