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German Solar Tax Plan Faces Block

by Ulrika Lomas, Tax-News.com, Brussels

19 June 2014


The German Solar Industry Association (BSW-Solar) has said it would challenge the constitutionality of plans to introduce a tax on the consumption of solar power generated by a person for their own use should the Government press ahead with its plans.

Negotiators in the Coalition are reportedly in favor of charging all solar self-suppliers 40 percent of the nation's 6.24 cent per kilowatt-hour renewable energy levy (EEG-Umlage) in future, as part of efforts to reform the Renewable Energy Act and fund the energy transition from a broader base.

The association warned that the so-called "sun tax" would reduce the number of new photovoltaic installations, and lower Germany's chances of meeting its solar energy expansion targets. Meanwhile, broadening the renewable energy tax base will not lead to lower electricity prices, contrary to Government expectations, the group said.

Germany's ruling coalition Government initially planned to charge solar self-suppliers 50 percent of the renewable energy tax when a capacity cap is reached. However, the Bundesrat, the upper house of parliament, on May 23 rejected the proposal.

The Government intends to submit a revised proposal to the Bundestag, the lower house, on June 26, after which the proposal will return to the Bundesrat on July 11.

TAGS: tax | energy | tax rates | Germany | tax breaks

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