Are there subsidies for the installation of solar panels?

With the increasing rise in the price of electricity in Spain and throughout Europe, more and more Spaniards are considering how to lower our electricity bill. One solution is the installation of solar panels, with which we can generate our own energy thanks to sunlight, an option that respects the environment and has many possibilities in Spain, taking into account the climatic conditions from which we benefit.

But, are there aids for the installation of solar panels? Or do we have to bear the cost ourselves? As a consequence of the economic crisis generated by COVID-19, the European Union has launched a benefit fund called Next Generation with which it wants to boost the economy of the Member States. Framed in this fund is the Recovery, Transformation and Resilience Plan of the Government of Spain, through which the government makes available to autonomous communities an aid of 1,120 million of euros allocated to installations of solar panels (with an initial provision of 450 million, expandable up to 900 million), and storage of the energy generated (220 million, with an initial provision of 110 million). These grants are regulated by each [autonomous community](https://www.idae.es/ayudas-y-financiacion/para-energias-renovables-en-autoconsumo-almacenamiento-y-termicas-sector/estado -of-the-calls-by-autonomous-community-rd-4772021-self-consumption-and-storage). They will be awarded in order of presentation and can be requested until December 31, 2023. In turn, there are different requirements to request them if it is for residential self-consumption, the *self-consumption of a company * or the self-consumption of a community of neighbors.

IBI discounts

The Tax on Real Estate (IBI) is the one that taxes the value of the properties based on their cadastral classification, that is, if it is an urban, rustic property or with special characteristics . The collection of this tax is the responsibility of each municipality.

The IBI regulations give the possibility for each city council to discount all those who install solar panels in cities with more than 100,000 inhabitants or provincial capitals.

For example, in Santa Cruz de Tenerife, the installation of solar energy harnessing systems grants users the right to a bonus of 50% of the full amount of the tax for 5 years.

On the other hand, in Las Palmas de Gran Canaria, in 2021 a bonus of 50% was launched for 3 years.

ICIO discounts

The Tax on Constructions, Installations and Works (ICIO) is an indirect tax levied on any type of construction, installation or work, regulated by the city council. So any installation that is made in a home is affected by this tax.

This tax is also regulated by each municipality, so that the discounts depend on each municipality. For example, in Canarias this tax is paid only by the islands of Lanzarote, Fuerteventura, Gran Canaria, La Palma and Tenerife. In Santa Cruz de Tenerife the benefit is 90%, in Las Palmas de Gran Canaria it is 75%, and in other municipalities on the rest of the islands it is usually between 50% and 75%.

IRPF deductions

The Personal Income Tax is a tax levied on the income of Spanish citizens during a calendar year, being progressive and direct.

On October 6, 2021, a Royal Decree Law is approved where it is allowed the deduction of income tax for the energy improvement of homes, such as that obtained with the installation of solar panels. This Royal Decree is within the framework of the Recovery, Transformation and Resilience Plan, named above, which introduces three new temporary IRPF deductions on the amounts that are invest in rehabilitation works that make improvements in energy efficiency.

By choosing Solarama as your solar partner, we will take care of all aspects of your installation, from the design, financing and warranties, to the legalization and processing of the applications for subsidy, and the monitoring and optimization of the solar installation during the following years.