When photovoltaic power generation takes on a commercial character, it is time to talk about tax optimization. This is because photovoltaic systems have the potential of a wide range of control designs. For example, entrepreneurs can use an investment deduction amount before the purchase, with which they can reduce their profit by up to EUR 200,000 in the year of the approach, i.e. well before the purchase of the PV system. In addition, after the purchase, a special depreciation of up to 20% on the acquisition costs attracts. For entrepreneurs who have reached the age of 55, a sale of the company is advisable, where they can use half the tax rate. Even in the case of inheritance tax, one can rely on tax optimization to transfer a company with photovoltaic systems tax-free. This is possible even if under normal circumstances a significant inheritance or gift tax would be incurred.

This article is supposed to be a sunny post. Because here we want to turn the power of the sun into sounding coins. Of course, this is done with a photovoltaic system. However, we want to go one step further and subject the profit generated by nature to tax optimization. So we want to make two suns shine for you.

With the control optimization regarding the use of photovoltaic systems, one can already start with the purchase of the PV system. If you as an entrepreneur want to buy a photovoltaic system and meet certain legal requirements, then you can set an investment deduction amount according to § 7g EStG before purchasing the PV system. The investment deduction helps to significantly reduce the taxable profit in the year in which it is set. Every year it is possible to make an investment deduction of up to EUR 200,000.

§ 7g EStG offers us another opportunity to achieve tax optimization by acquiring a photovoltaic system. In parallel to the investment deduction amount, this paragraph also allows the application of a special depreciation as soon as the photovoltaic system has been purchased. Up to 20% of the acquisition costs can be written off in one fell swoop. However, regular depreciation of the tax base reduced by 20 % is then carried out in the following marketing years.

In addition, the useful life of a photovoltaic system in reality is longer than the one used for depreciation. On average, a photovoltaic system works in practice for a good 30 years before it has to be replaced. For tax purposes, however, a period of use of 20 years is considered acceptable. Therefore, the amortization of a photovoltaic system carried out purely by depreciation is achieved much faster.

Whether with or without special depreciation, between the real market value and the significantly lower book value, a sometimes considerable hidden reserve develops over the years. How to subject this silent reserve of a photovoltaic system to a successful control optimization, read in the next chapter.

Suppose Mrs. Green is 35 years old and wants to buy a photovoltaic system. Since the electricity is to be sold to an energy supplier, the generation of electricity by means of the photovoltaic system is a commercial enterprise. If Ms. Grün operates the photovoltaic system alone, this is therefore a sole proprietorship.

Once the useful life of the photovoltaic system has elapsed, the cumulative depreciation has reduced the book value to EUR 1. Nevertheless, the photovoltaic system can certainly be sold at a much higher market value at this time. Therefore, Ms. Grün now founds a GmbH and sells the photovoltaic system to the newly founded GmbH.

In the meantime, however, Mrs. Green has already become 55 years young, so that she can benefit from taxation at the so-called half tax rate. Even if she actually has to count on the top tax rate for her income tax, she may sell a company under the provisions of § 34 EStG once at special conditions. This means that she only has to tax about half of the profit made. And that's what she's exploiting.

With the GmbH, she still has control over the photovoltaic system. Yes, she can even make a new depreciation with her GmbH on the basis of the realistic acquisition costs. Another, very welcome tax optimization of revenues that your photovoltaic system continues to generate.

Let’s assume this time that Ms. Grün wants to operate a photovoltaic system with her family. The Grün family then works in their entrepreneurial project within the framework of a company under civil law (GbR). Alternatively, the Grün family can also agree on another legal form for their company, such as a limited partnership (KG).

In any case, their family members would one day inherit their share of the company. If the family has expanded its investment in photovoltaic power generation beyond its first plant over the years, the company’s value could have grown significantly. Accordingly, the basis of assessment for inheritance tax should be correspondingly high. If it even exceeds the maximum allowance of its heirs, inheritance tax applies.

But wait, when inheriting company shares, special rules apply. Because then one can refer as an heir to the regulations of § 13a and 13b ErbStG, which do not provide for inheritance tax in the case of so-called beneficiary property, subject to compliance with certain conditions. Beneficiary assets refer to operating companies up to a value of EUR 26,000,000. You can make the inheritance tax either 85% or even 100% tax-free, if the heirs meet certain conditions. This includes continuing the company for at least five years in order to obtain the 85% tax exemption. In order to inherit 100% tax-free, however, the entrepreneur must continue for seven years. This tax optimization is certainly very easy to implement for a company that generates electricity from photovoltaic systems.

So let’s say: photovoltaic systems are quite suitable as a capital investment because they are very affinity with regard to possibilities for tax optimization. Here we have presented only a small selection of examples with which companies that generate and sell electricity using photovoltaic systems can optimize their taxes. When you think that this is a large growth market in Germany, you can imagine how endless the financial lures of PV systems are.