Grants and subsidies for solar panels in Madrid

In Madrid, installing solar panels on a home costs around €6,000 on average. The price can be reduced by almost half with the incentives offered by the Regional Government. Once the installation is completed, each single-family property can obtain savings of up to 70% in its electricity consumption, which for a family with an average consumption, means around €550 per year on its electricity bill, according to information from the Autonomous Community.

Thus, with the existing subsidies (mostly from Next Generation funds), citizens can reduce the payback period of their solar panels by two to three years.

Main Grants:

• Next Generation Funds (The period of validity of these grants is from 16 November 2021 to 31 December 2023).

Rebates:

• Property Tax (IBI)
• Tax on Construction, Installations and Works (ICIO)*
• PERSONAL INCOME TAX (IRPF) (State Grant)

Grants for Next Generation Funds

The Community of Madrid manages more than €87 million in grants, which are divided into three categories: self-consumption, storage (batteries) and renewable heating/air conditioning. They also cover a variety of technologies: photovoltaic, wind, biomass, geothermal, hydrothermal or aerothermal energy for heating/air conditioning and domestic hot water in homes.

The total of these resources comes from the Next Generation Funds. The grants are divided into six programmes, each targeting a specific sector or service. The fourth and fifth programme concern photovoltaics in the residential sector.

The amount of grants will vary according to the beneficiary and the type of installation. In the case of the implementation of photovoltaic self-consumption, incentives range from €300 to €600 per kilowatt peak (kWp) for the residential sector. And from €500 to €1,000/kWp, for public administrations and the third sector. The incorporation of storage systems is subsidised with contributions of between €140 and €490/kWp.

For example:

Owners' association. Block of flats with individual consumption with photovoltaic and storage.

The allocation for the installation of solar panels in the residential sector (programme 4 and 5) has been 100% allocated, but applications for these lines of grants are still being submitted and will be considered if new funds are forthcoming.

HOW THE GRANTS WORK (MAY 2022)

• Total funds committed: €69,348,000 (80 % of the budget allocation)
• Number of applications received: more than 18,000 applications (all lines of grants)

Grants for Demographic Challenges

In addition, the Next Generation funds, linked to self-consumption and energy storage, provide additional support for actions carried out in municipalities with less than 20,000 inhabitants on non-urban land and 5,000 on urban land.

The additional grants can range from €30 to €55/kWp for the installation, and €15 kWh (kilowatt hour) for the battery (storage).

REBATES

Property Tax

The installation of solar panels, in the different Town Councils of the Community of Madrid, has a rebate on the Real Estate Tax (IBI). The tax is municipal in nature and the percentage and duration of the rebate varies according to the municipality.

In Madrid, for example, the reduction is up to 50% during the three years following the completion of the installation of the panels. In Getafe the percentage is lower (30%), but it lasts for 10 years. In Alcalá de Henares, on the other hand, the percentage is 50% and lasts only one year.

Tax on Construction, Installations and Works

This indirect tax is levied on any construction, installation or work that requires the corresponding building or urban planning licence to be obtained. The tax rate is set by each Town Council and may not exceed 4% of the cost of the material execution of the work.

For those properties with photovoltaic panel installations there is a rebate, which varies in percentage depending on the Town Council. In Madrid, for example, it is 95%, while in Leganés it is 5% and in Fuenlabrada it is 50%.

PERSONAL INCOME TAX (IRPF) Deductions

The national Government has launched three new temporary deductions in the total amount of personal income tax (IRPF) for those who have carried out energy improvement works, including the installation of solar panels.

The reductions range from 20% to 60% depending on the improvements of the property.