Government funding 2024: New grants for your photovoltaic system

You want to have your own small power plant on your roof that turns sunlight into electricity—either to run your own appliances or to sell the excess power? But sure, a solar system like this, also called a photovoltaic system, and maybe a battery storage unit on top so you can use solar power at night too, costs a fair bit at first. We are talking about several thousand euros. In this guide, we take you by the hand and show you what subsidies are available and how you can benefit from them. Whether you are completely new to the world of solar systems or already bring a little prior knowledge, we want you to feel well-informed and able to make the best decision for yourself and your home.

Sunny prospects: How your solar system supports you in 2024 – Investment

Now for the good news: in 2024, special offers await in many places to help you shoulder these costs. Municipalities—meaning city or local governments—are putting together packages that hand you a substantial amount of money if you decide on a solar system, with or without an extra battery to store the electricity. Some federal states also have such support offers ready. But there is even more: the state itself is standing by your side. It promises to pay you a fixed price for the electricity your system produces and you feed into the grid. This is what is known as the feed-in tariff. In addition, through the KfW Bank, a state development bank, you can get low-interest loans for your solar project.

Subsidy 2024: Berlin is the only federal state to offer direct grants for PV systems

The situation in Berlin is quite unique. Only here are there government grants that help you finance both a standard-sized solar system and a battery storage unit. In 2024, Berlin is the only place in Germany that offers such direct assistance. A similar program in Schleswig-Holstein was unfortunately paused for the time being. Although every federal state has the freedom to design its own funding programs, many have focused in the past on specifically supporting the purchase of battery storage systems. Places like Baden-Württemberg, Bavaria, Lower Saxony, and a few others were very active in this regard. However, many of these programs have now expired simply because the funds for them have been used up. But don't worry, there is also good news: many cities are stepping in and offering their own grants, specifically for the construction of solar systems. And if you are considering just a small system for your balcony, there are special subsidies for that as well—at both the state and municipal levels in 2024. An important point is that every grant is tied to the condition that your system is connected to the public power grid and installed in the respective federal state. This means you must live in the federal state where you want to apply for the funding in order to benefit from these programs.

Energy of the future: Berlin subsidizes solar systems and battery storage

In Berlin, there is good news for anyone who wants to make their home more eco-friendly: since September 2022, the Solar Plus program has been up and running. Imagine it like a financial boost from the city to help you make even better use of solar energy. Whether you need a battery storage system to save solar power for later, or want to install a solar system in a special location—such as on the facade of your house or even on a historic landmark building—Berlin will help you do it.

In short, the program looks like this:

• For small houses (single- or two-family homes), there is up to 15,000 EUR for battery storage systems – that is 300 EUR for each stored kilowatt-hour.
• For larger residential buildings, you can expect support of up to 65 % of the costs for battery storage systems, with a maximum of 30,000 EUR.
• Do you own a listed historic building? Berlin will then cover up to 65 % of the extra costs incurred for installing a solar system compared to a regular building.
• And if you want to install a solar system not on the roof but on the facade, you will also get back up to 65 % of the additional costs.

Additionally, there is also a small bonus: The city will pay you a one-time amount of EUR 226.10 for an initial consultation with a tax advisor, subsidizes the costs for a roof assessment and the modification of metering points, such as the installation of a new meter cabinet.

If you own a house, you can apply directly. If you own an apartment, the property management will handle this for you. Applications are accepted by the Investitionsbank Berlin-Brandenburg (IBB) – both on paper and via an online portal.

So, if you live in Berlin and are thinking about switching to solar, now might be a good time to take the plunge and take advantage of government subsidies in the process.

Your path to photovoltaic funding in Munich

In Munich, there is good news for anyone who wants to make their home more environmentally friendly: the city provides financial support for the use of solar energy. The „Climate-Neutral Buildings“ program has been active since 2022. It helps not only with the modernization of houses to save energy, but also with the installation of solar systems and other eco-friendly technologies such as heat pumps. Here is a simple overview of the support you can receive for solar systems (as of January 2024):

• For each kilowatt-hour of capacity that your residential solar system can produce, there are 265 EUR.
• Do you have a listed historic building or want to integrate the solar panels directly into the roof? Then you will get an extra 253 EUR on top for every kilowatt-hour of capacity.
• If you opt for particularly robust glass-glass modules, an additional 44 EUR per kilowatt-hour applies.
• And if you combine your solar system with a green roof, there is even an additional 88 EUR per kilowatt-hour of capacity.

Since 2023, there has been a regulation in Bavaria for new non-residential buildings stating that solar systems must be installed there. The funding program therefore focuses on projects for existing buildings or new builds that do not fall under this regulation. To apply for the funding, you must go online. You can submit your application via a special portal. As soon as you receive an email confirmation that funds have been reserved for you, you can get started and sign a purchase agreement for your new solar system. It is worth investing in the future, and Munich is now making it even easier for you.

Solar power funding program: The KfW 270 photovoltaic loan

If you’d like to turn your roof into an eco-friendly energy source, the KfW Bank offers financial support for your project. The KfW Bank is backed by the government to promote such eco-friendly initiatives. Through the program called „270 Renewable Energies – Standard,“ you can get low-interest loans to finance a solar system or even a battery storage unit. The best part? It doesn’t matter where in Germany you live. In 2021, for example, over 6,400 happy solar system owners received such loans, totaling approximately 300 million euros in financing. These loans aren’t just intended for the purchase of the system itself, but also cover everything involved—from initial planning to installation. Even if you opt for a used system, this support is available to you, including KfW loan options. This applies to systems that have been in operation for less than 12 months or to older ones that you upgrade to increase their output. But be aware: Interest rates on these loans won’t be quite as low in 2024 as they used to be. So it’s worth checking with other banks to see what loan options they offer. Another important point: KfW works with partner banks, which means you’ll receive the KfW loan through your own bank. However, some banks aren’t very enthusiastic about this for smaller amounts and don’t offer these loans at all. Don’t worry—there are other ways to finance your solar system, which we’ve compiled for you in a special guide.

From KfW 270 to customized solutions: Professional advice for financing your photovoltaic system

To optimally finance your solar project, not only is the KfW 270 loan for photovoltaic systems available to you, but also our independent financial advisor. She sheds light on the maze of financing options and helps you find the best offer. While the KfW 270 loan offers attractive conditions for the installation of your solar system, our expert can go beyond that and present you with tailored solutions. She not only reviews the conditions of the KfW loan, but also compares alternative financing offers to ensure that you choose the most cost-effective and advantageous option for your project. With this combination of government-subsidized and individually customized financing, nothing stands in the way of your path to an eco-friendly energy supply.

How much are your savings from renewable energies and the electricity produced?

With a solar system on your roof, you can save considerably by generating your own electricity using solar energy. This is not only a good idea because of its environmental friendliness, but also very attractive financially. Basically, you have two options: you use the electricity yourself and thereby reduce your electricity bill, or you feed the excess electricity into the grid and receive compensation for it.

To be specific: The electricity from your own solar system costs you the equivalent of only about 10 to 16 cents per kilowatt-hour. By comparison, you often pay triple that for electricity from the grid.

As a rule, you can directly consume around 20 to 30 percent of the electricity you generate yourself. Let's assume you need 5,000 kilowatt-hours (kWh) annually. Your own PV system could supply you with 1,500 kWh of that. The savings amount to about EUR 500 per year – depending on what you currently pay for electricity from the public grid. Since solar radiation varies throughout the year, it will be difficult to cover your entire electricity demand yourself year-round. In summer, you will probably feed more electricity into the grid than in winter.

The solar power that you do not use yourself is fed by your solar system into the general power grid. For feeding in, for example, 3,500 kWh from our example, the grid operator will pay you about 284 EUR in the year 2024. This feed-in tariff is guaranteed for 20 years. If you were to feed in the entire 5,000 kWh, you would receive 644 EUR.

However, to be able to benefit from your own solar power, an initial investment is necessary: roughly estimate 1,400 EUR per kilowatt-peak (kWp) of output for the purchase of a PV system. The rule of thumb is: the larger the system, the cheaper the price per kWp. Systems with an output of more than 10 kWp can under certain circumstances be even cheaper. For smaller systems, 1,400 EUR per kWp is a good guideline.

You should avoid spending more than 1,800 EUR per kWp for a self-consumption system. For a system with an output of 5 kWp, the investment costs are therefore around 9,000 EUR. An additional small battery storage system, which allows you to use about 50 percent of your solar power yourself, would cost another several thousand euros.

If you decide to feed all your electricity into the grid, your profit depends on how affordably you purchase your solar system and how low your ongoing costs are.

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How the government supports your investment in solar energy

The government is by your side if you are considering making your home more eco-friendly with a solar system. Since 2023, the purchase of solar systems and battery storage has even been tax-free, as value-added tax is no longer charged on them. This makes the purchase immediately more attractive.

How you are rewarded for your solar power

For the electricity your system generates and feeds into the power grid, you receive money – the so-called feed-in tariff. If you install your system between February 1 and July 31, 2024, and it has an output of up to 10 kilowatts peak (kWp), you will receive 8.11 cents for every kilowatt-hour (kWh) you feed into the grid. You will receive this amount not just once, but every year for 20 years.

If your system is larger, the rate of 8.11 cents will still apply to the first 10 kWp. Anything above that is compensated at 7.03 cents per kWh until the system reaches 40 kWp. Note that these feed-in tariffs will decrease by 1 percent every six months, starting in February 2024.

If you decide to feed all your electricity into the grid, you will even benefit from higher feed-in tariffs: for the first 10 kWp, you will receive 12.87 cents per kWh. And for capacities up to 100 kWp commissioned between February and July 2024, the rates are 10.79 cents per kWh.

Support with planning

A solar energy system is a big decision, especially when considering the expansion of renewable energies. How large should it be? Is it even worth it for your home? To answer these questions, there are state-subsidized energy consultations. For example, the Federal Office for Economic Affairs and Export Control (BAFA) offers a subsidy that covers up to 80 percent of the consultation costs – up to EUR 1,300 for smaller and up to EUR 1,700 for larger residential buildings. Consumer advice centers, with the support of the Federal Ministry for Economic Affairs, also offer consultations that are partly free and partly very inexpensive.

To get an overview of the funding opportunities, use the funding check from CO2online, a non-profit portal. Here you will also find information on further support, for example for heating system replacement or the energy-efficient renovation of your home.

Adjustments to the feed-in tariff for solar power

If you own a solar system as a homeowner, you can use it to power many of your electrical appliances, such as the dishwasher, washing machine, refrigerator, electric car, or heat pump. This allows you to use cheap solar power and save on the costs of more expensive electricity from the public grid. You can feed the electricity you do not use yourself back into the grid and receive payment for it, the so-called feed-in tariff.

However, this remuneration for newly installed systems will soon decrease again. Following a pause in the reduction of remuneration rates due to the energy crisis in 2022, the remuneration you receive for 20 years will be reduced by one percent starting February 1, 2024. This means that for every kilowatt-hour of electricity you feed into the grid, you will then receive 8.11 cents instead of 8.2 cents. This remuneration will continue to decrease: starting August 1, 2024, it will be 8.03 cents, and starting February 1, 2025, it will be 7.94 cents per kilowatt-hour.

It is important to know that these adjusted remuneration rates apply only to plants commissioned after these deadlines. Each of these plants will then receive the respective specified, slightly lower remuneration for 20 years.

How the acquisition costs for photovoltaic systems are changing

The cost of a solar system on your roof depends on the acquisition costs. Recently, especially in 2023, these costs have become significantly higher due to rising energy prices, high demand, and supply chain difficulties. But now it looks like this phase of rising prices is over and the costs for solar systems are falling again.

If you are considering a 10-kilowatt solar system for your roof, among other things, the prices have already dropped from an average of about 1,800 EUR per kilowatt. Now you can expect costs between 1,300 and 1,600 euros per kilowatt. This also means that the electricity you generate with the solar system will become cheaper.

How to secure the best deal for your PV system

If you are interested in buying a solar system, it is wise not to jump at the very first offer. Instead, you should obtain several quotes and compare them carefully. This is particularly easy via online portals specifically designed for photovoltaic systems. Here, you can send inquiries to various specialist companies with little effort.

Once you have gathered various offers, take the time to compare them. It is important not to make a hasty decision. Check for yourself whether the system makes financial sense for you. Do not blindly trust the profitability calculations presented to you. In the fourth step of our detailed guide on buying a PV system, you will find helpful tips on what to look out for. A good benchmark for a fair price is anything that is 1,800 EUR per kilowatt-peak (kWp) and below.

Even if we make recommendations, it is important that you remain critical, particularly with regard to the quality of the advice and the components offered by the recommended installation companies. Of course, you can also contact a solar installer directly in your area or search for other companies on your own. Helpful resources for this include the company directory of the Photovoltaikforum, the solar company database of the German Solar Association (Bundesverband Solarwirtschaft), and the database of electrical trade businesses of the Central Association of the German Electrical and Information Technology Trades (ZVEH).

Tax benefits for solar system owners: No more sales and income tax

The value-added tax for new solar systems with an output of up to 30 kilowatts has been reduced from 19 % to 0 %. This tax benefit, introduced at the beginning of 2023, is now permanent and will continue beyond 2023. The Federal Ministry of Finance has announced this. In addition, since 2022 you no longer have to pay income tax on the revenue you generate from the solar power produced. This makes solar systems even more attractive and affordable.