Luxembourg encourages more people to engage in solar power generation with tax cuts

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Luxembourg encourages more people to engage in solar power generation with tax cuts

This initiative is supposed to boost the entire sector and fuel the renewable transition of the Grand Duchy.

Yesterday, the Luxembourg Ministry of Energy and Spatial Planning announced a new policy to help small solar energy producers, with the aim of promoting more renewable energy across the country. Under the new rules, income from the sale of solar energy from photovoltaic installations not exceeding 10 kWp (kilowatt-peak) will be exempt from tax. The new rules will apply retroactively to January 1, 2021.

In addition, the government has launched the fourth tender for large-scale solar power plants, representing around 55 MW. This is the equivalent of the consumption of 35,000 inhabitants. They announced five lots for the redevelopment comprising industrial sites, building envelopes and water basins.

Targeted growth of small producers

According to the Ministry of Energy and Regional Planning, in 2020, solar energy production in the Grand Duchy could meet the needs of 120,000 people. Over the past six years, the efforts of local authorities have pushed Luxembourg’s power generation capacity by around 70%, from 110 MW to 187 MW.

The government has put 609 photovoltaic installations into operation in 2020 alone and they want to be even more active. This is what motivated the widening of the tax exemption for small installations.

Finance Minister Pierre Gramegna explained that thanks to fiscal flexibility, more people will have the opportunity to actively participate in the renewable transition in Luxembourg.

Minister Turmes explained that solar energy plays a major role in the country’s transition and its goal of achieving 25% renewable energy production. Solar energy is a key part of the plan to reduce greenhouse gas emissions by 55% by 2030 compared to 2005.

Minister Turmes continued: “By allowing more players, whether they are individuals installing small photovoltaic panels, or owners of large surfaces, to benefit from advantageous conditions, we hope to convince more of the population than the Photovoltaic energy is not only good for the climate but also profitable. and lucrative investments. “

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