IAB for Photovoltaics: How Germany's Investitionsabzugsbetrag Works (with Calculator)

The Investitionsabzugsbetrag (IAB, investment deduction under § 7g EStG) removes up to 50% of a planned PV investment from taxable profit, years before the system exists. For a company with a high tax burden it is the most effective lever in the entire PV tax toolkit. The IAB calculator delivers your personal figure in 60 seconds, no sign-up required.

The mechanics in one paragraph

You are planning a PV system for €300,000. In the planning year you deduct 50% of that, €150,000, from profit outside the balance sheet. At a marginal tax rate of 42% this saves around €63,000 in tax, immediately, on an investment that does not have to happen for up to three years. On acquisition the IAB is reversed, increasing profit, and at the same time deducted from the acquisition cost; the tax burden is therefore not merely deferred, it falls permanently over the depreciation years if the marginal tax rate in the deduction year is higher.

The limits: three numbers, one deadline

Add the usage requirement: the asset must be used at least 90% for business purposes and must remain in the business until the end of the financial year following acquisition. A commercial PV system whose electricity covers on-site consumption and whose surplus is fed into the grid regularly meets this; whether your specific setup qualifies is covered by the IAB checklist.

The photovoltaics special case: § 3 Nr. 72 EStG

Since 2022, income from small PV systems (up to 30 kWp on certain buildings) has been exempt from income tax. That sounds like an advantage, but it rules out the IAB: where no taxable income arises, there is nothing to deduct. The IAB is therefore an instrument for commercial systems above these thresholds, precisely the segment of commercial rooftops from around 50 kWp.

The IAB is the start, not the end

The full tax toolkit has three stages that build on each other:

1. IAB before the investment: up to 50% upfront, as described.
2. Special depreciation under § 7g Abs. 5 EStG on acquisition: 40% of the acquisition cost (reduced by the IAB), freely distributable over five years. Details, including the combination with the declining-balance depreciation of the Investitionsbooster, are in the article Special depreciation and Investitionsbooster 2026.
3. Regular depreciation over the useful life: straight-line or, within the Investitionsbooster window, declining-balance; the overview is at Depreciation for photovoltaics.

Worked example, rounded: €300,000 investment. IAB of €150,000 in the planning year. On acquisition, a depreciation base of €150,000, of which 40% special depreciation = €60,000. Within the window, €210,000 of €300,000 has been claimed for tax purposes, 70% of the investment, with the rest following through regular depreciation. The exact allocation belongs with your tax advisor; the order of magnitude shows why family businesses and professional practices with high tax burdens often justify PV projects on the tax effect alone.

From tax lever to project

The IAB requires a concrete investment intention and a real system within three years. The sequence is therefore: first clarify the feasibility of the property (solar roof check with official data, grid connection, economics), then place the IAB in the right year. NEXA delivers the project-side foundation: potential, yield forecast and financing structure per property, as the numerical basis for your tax advisor. Starting point: the IAB calculator for the tax side, start an analysis for the project side.