Economics of Photovoltaics - My Findings - Is Something Missing?

Regarding the topic of financing, my thread about an upcoming inheritance also fits well. The advice there was, instead of investing a part of the inheritance into the installation of a photovoltaic system, to rather finance it and put the entire inheritance into the existing mortgage (whose interest rates are then slightly higher than those of the photovoltaic system). Especially considering that the interest can still be deducted....

Doesn't the self-consumption also have to be included as profit in addition to the revenue? Thus, income tax is also due on the self-consumption.

This would reduce the profit by about €255 in your example calculation and lead to a return of 5.5%.

Doesn't the self-consumption also have to be added to sales as profit? Thus, income tax would also be due on self-consumption.

This would reduce the yield by about €255 in your example calculation and lead to a return of 5.5%.

Hello Chilledkroete,

thank you very much for your comment, you are right that I forgot the non-cash benefit in the income tax calculation.

Is it correct like this?

Non-cash benefit
22 % * 8300 kWh * €0.122 = €223

Then I would have to include this amount in the income tax calculation:
Income tax after income surplus calculation per year:
42% * (1392 € + 223 € - 665 € - 23 € - 50 € - 100 €)
=
€326
and the return calculation would then be:
(1392 € - 23 € - 50 € - 100 € - 233 €) / 13300 €
=
6.7 %

Correct?

You somehow came to €255, which I cannot understand.

Kind regards

jx7

I am not an expert either, but I am currently dealing with the same topic (additionally with the topic of [Blockheizkraftwerk]).

Your withdrawal (self-consumption), which is necessary for VAT and income tax, can be calculated in different ways:

1. according to the cost price
2. according to the usual market price
3. according to the Renewable Energy Sources Act surcharge

You would first have to determine the cost price. I have just roughly calculated with the market price and probably also made a digit transposition.

8300kwh*0.25€(market price)*22% self-consumption*42% income tax= ~192€

For the calculation of VAT, the market price must be used, there are no options. This is also stated on the page you mentioned.

For the calculation of income tax, it is different.

The German Craft Newspaper writes:
"From an income tax perspective, the withdrawal for self-consumed electricity must be valued at the partial value according to § 6 Abs. 1 Nr. 4 Einkommensteuergesetz. There are the following possibilities to determine it:
a) Determination of the partial value based on the costs incurred
b) Determination of the partial value derived from the sale price likely to be achieved on the market
c) For simplification reasons, the tax authorities have in the past recognized 20 cents per kWh as the value of self-consumption. In newer guidelines, nothing can be found about this simplification rule anymore, but many tax offices still grant it."

a) (calculated from electricity generation costs) would probably be the cheapest, about 10 cents/kWh
b) (calculated from feed-in tariff) would be about 12 cents/kWh
c) (calculated from market price) would be about 25 cents/kWh

Two posts above there was a worsening improvement of the calculation, the self-consumption was counted twice. Here is the updated calculation again:

Value-added tax on self-consumption in the first five years, as long as you are not yet a small business owner, converted per year:
5/20 * (22 % * 8300 kWh * 5 cents/kWh)
= 23 €

Electricity generation costs:
(Depreciation + Insurance + Maintenance + Value-added tax) / Yield
(€665 + €50 + €100 + €23) / 8300 kWh = 10.1 cents/kWh

Yield of the system per year (monetary benefit through withdrawal or self-consumption may be calculated with electricity generation costs):
78 % * 8300 kWh * 12.2 cents/kWh + 22 % * 8300 kWh * 10.1 cents/kWh
= €969

Income tax according to EÜR per year:
Marginal tax rate * (Yield of the system - Depreciation - Value-added tax self-consumption - Insurance - Maintenance):
42% * (€969 - €665 - €23 - €50 - €100)
=
€55

Personal profit per year (feed-in tariff + saved electricity costs through self-consumption - value-added tax self-consumption - insurance - maintenance - income tax)
78 % * 8300 kWh * 12.2 cents/kWh + 22 % * 8300 kWh * 32.2 cents/kWh - €23 - €50 - €100 - €55
=
€1151

Return:
€1151 / €13300
=
8.7 %