Photovoltaics · 2 min read

Solar Direct Investment: Save Tax and Benefit Sustainably

This guide refers to German law and the German tax system. It is a translation of our German original and does not replace individual tax or legal advice.

Sustainable solar energy continues to grow in popularity this year. Investing in photovoltaic systems is not only a real boon for the environment, but also for the opportunities it offers to optimise the taxation of your income, particularly in the case of severance pay. This form of extraordinary income fits perfectly with a solar investment, which – thanks to the favourable treatment under the Investitionsabzugsbetrag (IAB, investment deduction) – makes it the ideal tax-saving model for many investors. We explain how acquiring a PV system allows you to convert your tax burden into private assets, and how the "solar pension" from a solar investment affects your income.

With our independent and highly sought-after advice on solar investment, Neo Capital GmbH is a reliable point of contact for you. We support you from the very first second in investing severance payments and other extraordinary income, before tax, in eligible business assets.

The benefits of photovoltaic investment for private individuals

Anyone considering investing in their own solar systems privately should be clear about their starting position. Particularly high tax advantages can be achieved in life situations characterised by bonus payments or severance pay – this extraordinary income is subject to your individual income tax rate and should therefore be matched by a well-chosen investment. Under German tax law, PV systems qualify for the IAB: the asset can be taken into account for tax purposes in the year of acquisition or planning, without spreading the costs over the long term. If a particularly high income, for example from severance pay, falls in the same year, this results in an attractive structuring model for income tax. The aim is to finance the PV system indirectly from the tax burden and thus transfer it into private assets – the investment therefore takes place before the tax is paid and enables a significantly higher investment volume than would be the case under the one-fifth rule (Fünftelregelung) or standard taxation.

Generating ongoing income with a PV investment

Solar systems are not only an attractive acquisition, but also offer the chance of income for decades. What is often referred to as a "solar pension" is characterised by ongoing income thanks to continuous electricity generation – with a yield of around 7% and a large degree of decoupling from the risk factors of other asset classes such as real estate or equities. State support for renewable energy creates additional security. Depending on when the severance payment is made, a solar investment may only take place at the start of retirement or may already be made at a young age; in either case, the IAB favours the approach without relying on decades of depreciation and late income. A solar direct investment thus not only reduces your tax burden, but also promptly creates capital for further investments and your own retirement provision.

Neo Capital GmbH: modern advice for tax-optimised investments

Investments with a term of more than 30 years should always be carefully considered. We advise our clients independently and comprehensively, so that your severance pay is optimally taken into account for tax purposes and invested precisely in the form of a solar direct investment – in close coordination with your tax adviser if you wish. Has solar investment sparked your interest? We offer you a free consultation with one of our experts to find out how solar systems can pay off for you individually as an IAB investment.