Tax deductions and incentives for solar panels in 2025

Installing solar panels isn’t only a sustainable choice—it can also be an excellent way to save on your next tax return. If you’re considering switching to self-consumption, 2025 is the perfect time. You can still benefit from current tax deductions, as long as the installation is completed before 31 December.

What tax benefits are available for installing solar panels in 2025?

Installing solar panels in your primary residence can qualify you for income tax deductions of up to 40% or even 60% of the amount invested, depending on the type of project and the energy impact achieved.

These deductions are regulated by Royal Decree-Law 19/2021 and are part of a broader set of incentives for energy-efficient home renovations. The goal is clear: to promote the use of renewable energy and reduce energy consumption in Spanish households.

Who can benefit?

These deductions are available to individuals carrying out work in their primary residence or properties they own. They also apply to homeowners’ associations, provided all technical and administrative requirements are met.

However, there’s one important condition: the affected part of the property cannot be used for business purposes. In other words, if you use your home as an office or commercial space, that portion won’t qualify for the deduction.

Requirements for claiming solar panel tax deductions

To apply the deduction on your 2026 tax return, you must meet the following conditions:

• Complete the installation before 31 December 2025.
• Obtain two energy efficiency certificates: one before the project and another after.
• Show a significant energy improvement, such as a 30% reduction in non-renewable primary energy consumption or an upgrade to an A or B energy rating.
• Keep all invoices and proof of payment, including costs for materials, labour, and technical fees.

How long can you benefit from the IBI discount for solar panels?

This deduction only applies if the post-installation energy certificate is issued before 1 January 2026. If you miss this deadline, you won’t be able to claim the deduction on your 2026 tax return.

In addition, there is an annual deduction cap of €5,000. However, if you exceed this limit, you can continue claiming deductions over the next four tax years, up to a total of €15,000.

What other taxes can I reduce besides income tax (IRPF)?

Deductible expenses include:

• The cost of solar panels and their installation.
• Technical fees and energy certificates.
• Project management and planning costs.
• Materials and equipment necessary for the installation.

Keep in mind that expenses related to fossil fuels, sports facilities, gardens, or areas used for business activities are not included.

Next Generation grants and their compatibility with deductions

European grants under the Next Generation programme are designed to boost energy efficiency in homes, and the best part is that they can be combined with existing tax deductions. This means that if you make improvements such as installing renewable systems, adding thermal insulation, or carrying out renovations that reduce energy consumption, you can benefit from both direct subsidies and deductions on your tax return. It’s a unique opportunity to upgrade your home, save on bills, and contribute to a more sustainable energy model.

How does this show up on your tax return?

In your 2026 tax return, you’ll need to tick the box for investments in sustainability and energy efficiency. The deduction will be applied directly to your income tax liability, reducing the amount you owe or increasing your refund.

Why install solar panels this year?

Installing solar panels in 2025 is a smart move that goes far beyond saving on your electricity bill. It’s a commitment to efficiency, energy independence, and the planet. This year offers ideal conditions to take the plunge:

• Take advantage of tax deductions before they expire: The current incentives and tax benefits for installing photovoltaic systems won’t last forever. Acting now will allow you to claim significant income tax deductions, lowering the overall cost of your investment.
• Improve your home’s energy efficiency: Solar panels enable you to generate your own clean energy, reducing your reliance on the grid and improving resource efficiency. You can also pair the installation with other upgrades like batteries or aerothermal heating to further optimise your energy consumption.
• Increase your property’s value: A home with solar panels not only consumes less energy, it’s also worth more. Energy efficiency is becoming increasingly important to buyers, and having solar panels can enhance both the appeal and market value of your property.
• Contribute to a more sustainable energy model: By generating your own renewable energy, you lower your carbon footprint and help build a cleaner, more decentralised energy system. It’s a tangible way to fight climate change right from your rooftop.

In short, installing solar panels this year is an investment that pays off for your wallet, your home, and our collective future.