Investment deduction for photovoltaic systems with significant self-consumption
On December 2, 2025, the Fiscal Court of Kassel clarified (Case No.: 10 K 1622/24) that photovoltaic systems significantly used for private self-consumption do not qualify for an investment deduction under § 7g para. 1 EStG.
Requirements for the investment deduction
According to § 7g para. 1 EStG, the investment deduction allows for a tax-preferential treatment of planned business investments under certain conditions for small and medium-sized enterprises. A key criterion is that the acquired asset is used exclusively or almost exclusively for business purposes. The legislator requires a business use of at least 90 percent.
Decision of the Fiscal Court of Kassel
In the case to be decided, the plaintiff installed a photovoltaic system and claimed an investment deduction. At the same time, the plaintiff used a portion of the generated electricity for private purposes. The use of the self-produced electricity exceeded the threshold of merely minor private withdrawal.
The Fiscal Court rejected the recognition of the investment deduction. The decisive factor was that the share of privately consumed electricity was not merely of subordinate importance. The court emphasized that if more than 10 percent is used for private self-consumption, the requirement of almost exclusive business use and therefore deductibility lapses.
Insignificance threshold of private consumption
The court clarified that minor private use of photovoltaic systems can be harmless, provided it does not exceed 10 percent of the total electricity generation. If this threshold is exceeded, the required almost exclusive business use is lacking. Consequently, the claim for the investment deduction is excluded.
Implications for system operators
The decision of the Fiscal Court of Kassel has far-reaching implications for operators of photovoltaic systems who do not use the produced electricity exclusively for business feed-in or use. If self-consumption of the generated electricity exceeds 10 percent, there is a risk that investment deductions under § 7g EStG cannot be claimed.
As the ruling of the Fiscal Court of Kassel is not yet final and a possible follow-up in the revision process remains possible, there remains a certain uncertainty regarding the final legal situation (Source: urteile.news/FinG-Kassel_10-K-16224).
Individual consultation
Given the complex tax regulations, it is advisable to thoroughly examine and legally secure the individual situation with regard to planned investments and their business use. For further questions on the tax treatment of photovoltaic systems or the investment deduction, the attorneys of MTR Legal are available for legal advice in tax law.
