0 Percent VAT on Photovoltaics in Germany: What § 12 Abs. 3 UStG Regulates
, By NeueEnergie24, 8 min reading time
The zero VAT rate for photovoltaics has applied in Germany since 2023. We summarize § 12 Abs. 3 UStG and the Application Decree in a factual way: conditions, proof, storage, components and limits.
Summary: Since 1 January 2023, a VAT rate of 0 percent has applied in Germany, under certain conditions, to the supply of solar modules, storage systems and essential components to operators of a photovoltaic system. The basis is § 12 Abs. 3 UStG (Section 12(3) of the German VAT Act, Umsatzsteuergesetz); the tax administration's interpretation is set out in the Umsatzsteuer-Anwendungserlass (UStAE, the German VAT Application Decree), Section 12.18, introduced by the BMF letter (Federal Ministry of Finance) of 27 February 2023 and supplemented on 30 November 2023. This article explains factually what is regulated and what matters. It does not replace tax advice. It covers German VAT law only.
As of October 2026, not legal or tax advice. Whether the zero rate applies in your case, please clarify with your tax adviser or the competent German tax office (Finanzamt).
What is the zero rate?
Under § 12 Abs. 3 Nr. 1 UStG, VAT is reduced to 0 percent for the supply of solar modules to the operator of a photovoltaic system, including the components essential for its operation and the storage systems. The condition is that the system is installed on or near private dwellings, apartments, and public and other buildings that serve activities in the public interest. Installation (Nr. 4) is also covered if the supplied components meet the conditions. The Verbraucherzentrale (German consumer advice centre) states that a rate of 0 percent has applied to private purchases since 1 January 2023.
The main conditions
Supply to the operator
According to the Application Decree, the zero rate covers only the supply to the operator of the system. The operator is whoever is, or is expected to become, subject to registration in the Marktstammdatenregister (the German central register of energy installations). It is sufficient that the system is intended to be connected directly to the electricity grid. Business status is not required, and for plug-in solar devices the actual registration is likewise not decisive.
Place of installation
The modules, storage systems and essential components must be installed on or near dwellings or eligible buildings. According to the Application Decree, proximity exists in particular if the system is installed on the plot on which the building is located, for example on a garage, a garden shed or a fence.
Simplification up to 30 kW (peak)
The building requirements are deemed to be met under § 12 Abs. 3 Nr. 1 Satz 2 UStG if the installed gross capacity according to the Marktstammdatenregister is not more than 30 kilowatts (peak), or will not be. The limit is examined per system unit. In the case of a later extension, the capacity of the existing unit is added to that of the extension.
Proof
The supplying business must prove that the conditions are met. According to the Application Decree, it is sufficient if the purchaser declares that they are the operator of the system and that either an eligible building exists or the installed gross capacity according to the Marktstammdatenregister is at most 30 kW (peak). The declaration can also be made as part of the contractual agreement, for example in the general terms and conditions. For photovoltaic systems of no more than 600 watts, this special obligation to provide proof does not apply and operator status is presumed; this does not apply to supplies by manufacturers and wholesalers.
What is included, what is not?
| Item | Zero rate? | Reference |
|---|---|---|
| Solar modules | Yes, if the conditions are met; for modules of 300 watts or more, use in grid-connected or stationary off-grid systems is presumed as a simplification | Abschn. 12.18 Abs. 7 UStAE |
| Battery storage | Yes, if they are intended to store electricity from eligible solar modules; as a simplification, this is assumed for storage systems of 5 kWh usable capacity or more; storage systems installed later are included | Abschn. 12.18 Abs. 7 und 8 UStAE |
| Inverters, roof mounting, energy management system, solar cables, feed-in socket, emergency power equipment | Yes, as essential components (the list is illustrative) | Abschn. 12.18 Abs. 8 UStAE |
| Screws, nails, cables as mere accessories | No, if supplied individually; as part of a single supply of the complete system they can also benefit | Abschn. 12.18 Abs. 9 UStAE |
| Electricity consumers such as charging infrastructure or heat pumps | No, not essential components of the photovoltaic system | Abschn. 12.18 Abs. 9 UStAE |
| Rental of a photovoltaic system | No, standard rate; leasing and hire purchase depending on the structure | Abschn. 12.18 Abs. 1 UStAE |
| Independent services (maintenance, permits, insurance) | No | Abschn. 12.18 Abs. 1 UStAE |
The Federal Ministry of Finance (Bundesfinanzministerium) also points out that ancillary services that serve the supply of the system share its tax treatment. These include, for example, the mounting of the modules, cable installation, the supply and connection of the inverter, and handling the registration in the Marktstammdatenregister. The Application Decree regulates the details of individual cases; in case of doubt, a tax adviser can help.
Examples from the Application Decree
- Garage, garden shed, fence: A system on the plot of the residential building is "near" within the meaning of the provision.
- Garden sheds and leisure plots: Buildings on leisure plots and garden sheds in allotment garden colonies are also treated as dwellings within the meaning of the provision.
- Solar tables and hybrid modules: Stationary solar modules with insignificant secondary purposes (for example solar tables) and hybrid modules that generate electricity and heat are eligible.
- Solar carports: Here the solar panels with mounting and the essential components are eligible, but not the primary substructure that serves the purpose of the carport itself.
- Off-grid systems: Stationary systems that are not connected to the grid are also subject to the zero rate.
- Mixed-use buildings: If a building is used both for eligible and non-eligible purposes, it is generally to be treated as an eligible building, as long as the non-harmful use does not clearly recede (among other things, where it is less than 10 percent of the usable floor area).
These examples show that the specific facts are decisive. A retailer cannot replace the tax assessment of your individual case.
What does this mean for balcony power plants?
The Application Decree expressly mentions plug-in solar devices in connection with registration and operator status. The actual registration in the Marktstammdatenregister is not decisive for operator status. For systems of up to 600 watts, the special obligation to provide proof does not apply. A plug-in solar device is nevertheless assessed like any other system under the conditions described, in particular its use at the place of residence. You can find our range of balcony power plants under Balcony power plants, and individual modules under Solar modules.
Storage, inverters and accessories
According to the Application Decree, batteries and storage systems are subject to the zero rate if, in the specific application, they are intended to store electricity from eligible solar modules. Essential components include inverters and energy management systems, among others. Around the system, you will find battery storage, inverters and solar accessories with us. Which tax rate is relevant for a specific order depends on the statutory conditions and on the declaration made during the ordering process.
Other tax topics related to photovoltaics
Besides VAT, there are further rules, for example on income tax. In its guide, the Verbraucherzentrale points out that the exemption from income tax and trade tax applies from 2022 to systems with a capacity of up to 30 kW (status of the page: 25 November 2024). A tax adviser is responsible for such questions; we cannot and may not answer them.
Frequently asked questions
Since when has the zero rate applied?
The BMF letter of 27 February 2023 regulates the application for supplies made after 31 December 2022. The Verbraucherzentrale gives 1 January 2023.
Does it also apply to storage systems that I retrofit later?
Yes, the Application Decree expressly includes storage systems installed later, provided the conditions are met. The purchaser's declaration can also be made for later supplies as part of the contractual agreement.
Does the zero rate also apply to a heat pump?
No. According to the Application Decree, electricity consumers for the newly generated electricity, for example charging infrastructure or a heat pump, are not essential components of a photovoltaic system.
Where can I find the official texts?
The statutory text is in § 12 UStG and the interpretation in the Umsatzsteuer-Anwendungserlass, Section 12.18; both are available on the websites of Gesetze im Internet and the Bundesfinanzministerium.
Sources
- Gesetze im Internet: § 12 UStG, paragraph 3
- Bundesfinanzministerium: Umsatzsteuer-Anwendungserlass, Section 12.18, inserted by BMF letter of 27 February 2023 (III C 2 - S 7220/22/10002 :010, BStBl I S. 351), supplemented by BMF letter of 30 November 2023 (III C 2 - S 7220/22/10002 :013, BStBl I S. 2085)
- Verbraucherzentrale: EEG 2023/24: Was heute für Photovoltaik-Anlagen gilt and Photovoltaik-Anlagen: So profitieren Sie von Steuervorteilen
We are happy to answer questions about products for your system by email: kontakt@energie24.shop. Please direct tax questions to your tax adviser.
As of October 2026, not legal or tax advice.