FAQ

You can find all the details about financing your photovoltaic installation and current subsidy programmes on our subsidy simulator.

Yes, it is applied directly to the invoice. Please note that this is worth, under the terms of the grand-ducal regulation of 23 December 2022 amending: 1° the grand-ducal regulation amended on 21 December 1991 determining the limits and application conditions of the reduced, super-reduced and intermediate rates of value added tax; 2° […], not only for the photovoltaic (or hybrid) solar panels, but also for the thermal solar panels. “The thermal functioning solar panels installed after 31 December 2022” no longer come under the scope of application of the “housing VAT”.

The necessary explanations are provided by bulletin No 812 issued by the Registration Duties, Estates and VAT Authority. This bulletin deals with the temporary reduction of the different rates, but in the end, the reduction of VAT from 17 % to 3 % for the solar panels is to be considered alike.
By way of additional information, here are some examples below.

Deliveries of goods, other than new modes of transport, and provisions of services

There is reason to distinguish between deliveries and services performed in the B2B/B2G sector and those made in the B2C sector.

A. For deliveries of goods/provisions of services relating to B2B (Business to Business, i.e. the customer is subject to VAT) and B2G (Business to Government, i.e. the customer is a legal person not subject to VAT), there is an obligation to issue an invoice for the delivery / service performed as well as for the instalment payments.

Attention: the customer to whom the work is invoiced that can benefit from the super-reduced VAT rate as part of the said “housing VAT”  is, even if this relationship appears to be B2C (business to consumer), for the purposes of the “housing VAT” only provisions considered as being subject to VAT.

If a delivery is made, the applicable rate of VAT is that in force:

• on the 15th day of the month following the delivery of goods / provision of service;
• on the day when the invoice is issued, if it is issued before this date.

If instalments are paid, the applicable rate of VAT is that in force:

• on the day the instalment paid is received;
• on the day when the invoice is issued, if it is issued before the instalment is received.

As a result, the following cases may apply:

• the goods are delivered / the service is performed in 2022 and invoiced in 2022: rate of 17 %
• the goods are delivered / the service is performed in December 2022 and invoiced in 2023: rate applicable in 2023 up to 15 January, thus of 3 %
• the goods are delivered / the service is performed in 2023 and invoiced in 2023: rate of 3 %
• an instalment for the delivery / service not yet carried out is invoiced in 2022 and paid in 2022: rate of 17 %
• an instalment for the delivery / service not yet carried out is invoiced in December 2022 and paid in 2023: rate of 17 % (date of the invoice)
• an instalment for the delivery / service not yet carried out is paid in 2022 and invoiced in 2023: rate of 17 % (date of receipt)
• an instalment for the delivery / service not yet carried out is invoiced in 2023 and paid in 2023: rate of 3 %

B. For the deliveries and services performed in the B2C sector (business to consumer, the customer is neither subject to VAT, nor a non-taxable legal person), there is no obligation to issue an invoice either for the delivery / service itself (only exception, certain sales called “distance sales”, or for an instalment paid before the delivery / service has been performed.

If a delivery / service is performed, the applicable rate of VAT is that in force on the day when the delivery / service is performed (completed) (operative event).
If instalments are paid, the applicable rate of VAT is that in force on the day the instalment paid is received.

As a result, the following cases may apply:

• the delivery / service is performed in 2022 (and invoiced  in 2022): rate of 17 %
• the delivery / service is performed in December 2022 (and invoiced² in 2023): rate of 17 %
• the delivery / service is performed in 2023 (and invoiced in 2023): rate of 3 %
• an instalment for the delivery / service not yet carried out is (invoiced² in 2022 and) paid in 2022: rate of 17 %
• an instalment for the delivery / service not yet carried out is (invoiced² in December 2022 and) paid in 2023: rate of 3 % (date of receipt)
• an instalment for the delivery / service not yet carried out is paid in 2022 (and invoiced² in 2023): rate of 17 % (date of receipt)
• an instalment for the delivery / service not yet carried out is (invoiced² in 2023 and) paid in 2023: rate of 3 %.

Taking into account the instalment(s) when delivering goods or providing services

As far as taking into account the instalment when solar panels are installed:

A simple accounting reversal of the instalment has no influence on the rate that was applicable at the time when it was received or invoiced (according to the cases listed above). The only way of “reversing” the VAT due because of an invoiced/received instalment would be to reimburse the amount received to the customer.

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^{1 Annex B, points 21° and 22°, of the law amended on 12 February 1979 regarding value added tax and the grand-ducal regulation of 30 July 2002 regarding the application of value added tax on the allocation of housing for use as the principal dwelling and to original and renovation work carried out in the interest of the affected housing for use as the principal dwelling and fixing the conditions and execution methods relating to this}

^{2 Commercial invoice, without impact relating to VAT.}

The provision for the super-reduced rate limits its application based on the type of building equipped with solar panels. It applies to private residences, housing, and public or other buildings used for activities of general interest, as well as those in close proximity to such buildings.

For “private housing”, this refers to buildings of which at least three quarters of the total surface area is dedicated for residential purposes. The same rule applies to housing, public buildings, and other structures used for activities of general interest: at least 75% of the total surface area must be reserved for these specific uses. 

A definition of this is provided in the amending regulation "Règlement grand-ducal du 23 décembre 2022": 1° the grand-ducal regulation amended on 21 December 1991 determining the limits and application conditions of the reduced, super-reduced and intermediate rates of value added tax; 2° […], and the following explication is provided by bulletin No 816 issued by the Registration Duties, Estates and VAT Authority: “private housing and buildings used by public authorities not subject to tax for activities carried out as such or used by those subject to tax for activities of general interest exempt from VAT without the right to deduct input tax (notably hospitals, schools, children’s nurseries, youth hostels and retirement homes)”. The provision of cultural services have been added to the latest list.

The delivery and installation of photovoltaic solar panels near the types of housing or buildings mentioned above still qualify for the super-reduced 3% VAT rate, provided they are installed on adjoining or nearby properties. These properties must be close to private residences, housing, or public buildings used for activities of general interest, and the solar panels must be connected to the thermal and/or electrical network of the relevant housing or buildings.

The grand-ducal regulation of 23 December 2022 amending: 1° the grand-ducal regulation amended on 21 December 1991 determining the limits and application conditions of the reduced, super-reduced and intermediate rates of value added tax; 2° […] defines in the context of the reduction of the VAT rate the “delivery and installation of solar panels” as follows: “work on a property consisting of the delivery of solar panels and their installation”.

As a result, all the parts necessary for this installation and its operation also come under the super-reduced rate, which implies the following parts of the photovoltaic solar panels: photovoltaic panels (or hybrid solar collectors), fixing rails, DC and AC electric cabling connected directly to the photovoltaic installation, inverter, electrical protection devices, bidirectional meter; and for the thermal solar panels: thermal solar collectors, fixing rails, insulated pipework, solar storage reservoir, calorimeter, peripheral equipment (power feed, regulation, heat exchangers); as well as, of course, the costs of installation.

For the photovoltaic solar panels, a storage installation (battery) is therefore not involved.

It is also important to note that the super-reduced rate only applies to such installation work on a solar power plant. Bulletin No 816 issued by the Registration Duties, Estates and VAT Authority defines this notion of “work on a property” as follows: “Therefore, there is reason for understanding this new provision not as the delivery of solar panels or the installation of such panels carried out separately, but as work on a property that consists of a delivery of solar panels with installation”.

The approved energy adviser is responsible for:

• carrying out on-site energy consulting;
• drafting the "conclusive report" (a comprehensive inventory of the property in question, the content of which must include a description of the property, the date of the site visit, the energy performance certificate prior to the retrofit and an integral energy renovation concept);
• checking the conformity of the offers to the measures proposed in the above-mentioned energy retrofitting concept;
• checking the conformity of the implementation on site with the measures proposed in the energy retrofitting concept;
• drafting a final report that must be attached to the request for payment of financial aid; 
• completing the forms for the request for an agreement in principle and for the payment of financial aid.

The quality assurance system for approved energy advisers within the meaning of the Klimabonus subsidy scheme includes the following:

• verification of the basic qualifications of the energy adviser;
• verification of any additional qualifications of the energy adviser;
• checking and approval, prior to certification, of an energy consultation report for a retrofitting project;
• a timely and regular quality control system, including: 
  • quality control of the services provided by energy advisers;
  • checking compliance with the conditions associated with the ongoing training of energy advisers, and
  • implementation of a customer evaluation system.

Since January 2017, energy advisers have been able to obtain certification by submitting an approval application to the Environmental Administration. Approval is conditional on membership of the OAI (architect or engineer in accordance with the Law of 13 December 1989) or an authorisation in accordance with the Grand Ducal Regulation of 10 February 1999 on the approval of natural or legal persons, private or public, other than the State, for the performance of technical study and control tasks in the field of energy, as amended.

From 15 December 2018, approved energy advisers will have to join a quality assurance system in the field of energy and sustainability consultancy for residential buildings with a body contracted for this purpose by the Ministry of Sustainable Development and Infrastructure. 

Benefit from financial support of up to 50% of the investment cost!

Under Article 4(h) of the Law of 31 May 1999, as amended, establishing a fund for the protection of the environmental, municipal administrations, municipal associations and public bodies under the supervision of the municipalities may receive aid covering up to 50% of the investment cost for projects for the rational use of energy and the promotion of new and renewable energy sources. This financial aid is accessible to all municipalities, regardless of their commitment to the climate pact.