The financial incentives for the installation of solar panels on your French home are now so strong that it is becoming a very tempting proposition.
On offer is entitlement to a 50% tax credit, an interest free loan, potential eligibility to a grant, and the possibility of a modest tax free annual income.
All of this is the result of a major drive by the French government to increase the amount of renewable energy produced each year to comply with EU objectives.
Tax Free Income
The resale of electricity into the French electricity grid from photovoltaic solar panels has been available to householders since 2006, although until recently the income realized from it was subject to income tax.
The French government have now decided that, provided the power produced by the installation does not exceed 3kW, then the income received will be free of income tax.
Nevertheless, it will remain liable to the social charge (CSG/CRDS) at the rate of 12.1%. There is very little income that escapes liability for this charge, as we have pointed out in the past.
As a rule of thumb, 3kW is equivalent to around 25m2 of photovoltaic solar panels, which would cost around €25K to install. (These solar panels should be distinguished from thermal solar panels, used merely for heating water, and which are considerably cheaper.)
As the resale price of the electricity back to EDF is around five times greater than the price you pay through your meter, wily home owners are installing photovoltaic solar panels and selling all of the electricity produced by them to EDF!
Thus, instead of simply selling any surplus electricity not used to EDF, you continue to meet all your domestic requirements using the normal tariff!
The amount of income that could be generated each year is in the order of €1500/€2000.
The installation of either photovoltaic or thermal solar panels also gives access to a tax credit of 50% for the works.
A ‘tax credit’ means that, even though you may not pay income tax in France, the French government will give you an equivalent sum in cash.
Nevertheless, you need to read the small print of the regulations. Thus, ancillary cabling and piping is excluded from eligible costs, as is the cost of labour.
You are also obliged to engage a professional installer, and it is only available on your principal home.
Accordingly, whilst you can sell electricity back to EDF from your second home in France, you will not be entitled to a tax credit for the work.
The availability of the tax credit has also encouraged some unscrupulous professionals to secure a health profit margin on the supply of solar panels, so do make sure you research the market for alternative prices.
Interest Free Loan
As we pointed out in a recent Newsletter, the government has introduced a tax free ‘eco’ loan of up to €30K.
As always, there is plenty of small print in the regulations to consider, but it can be used for the installation of solar panels, provided it is also accompanied by other works of energy conservation.
The housing renewal agency ANAH, also offers a grant for energy conservation works, although eligibility to this grant is means tested.
You will need planning permission if you install the panels on the roof of your property, although no formalities of any sort are required if they are installed on the ground.
However, if you do install them on the ground, beware of the risk of damage from wild animals, and (sometimes) wild adults!
Nigel Howard runs the web store mysolarshop.co.uk, with offices in Southern France. He advises, ‘Make sure your installer has the necessary French accreditations and insurance. You will not get the substantial tax credit available if you do not use an accredited company, and you may also end up with a leaky roof for which no one will accept responsibility!’
‘If you don't want to integrate the panels in your roof, or you want to take the DIY route and put the panels in the garden, then hang fire! There's a good chance the electricity buyback rate is going to change soon, so the cost may be the same for non integrated and integrated systems".