Austrian energy min wants to abolish VAT on solar systems

Austria's energy minister Leonore Gewessler this week proposed that the value-added tax (VAT) on the purchase of solar photovoltaic (PV) systems should be abolished to further incentivise the deployment of solar energy.

Gewessler has already submitted the proposal to the Ministry of Finance, she said at a press conference on Tuesday.

Gewessler's initiative was welcomed by the solar industry association PV Austria which urged the government to implement the proposal rapidly. According to the association's head, Herbert Paierl, the VAT exemption for PV systems is long overdue. Other countries such as Germany have already taken this step and it has been received positively, Paierl said in a statement.

The association called on finance minister Magnus Brunner to examine Gewessler's proposal seriously as it could relieve end-consumers, electrical engineers and the country's funding agency significantly.

If adopted, Austria will follow the example of neighbouring Germany which introduced a VAT exemption for the purchase of solar systems including battery storage as of January 1, 2023.

At the press conference, Gewessler also presented the programme of the Climate and Energy Fund which has a budget of EUR 581.15 million (USD 625.95m) for 2023 to support funding programmes, initiatives and demo projects that aim to ensure Austria's energy supply, strengthen its position as a business location and protect the climate. Almost EUR 228 million of the total will be spent on projects targeting the expansion of renewable energy, the development of innovative energy and storage technologies and the heat transition.

Overall, Austria has significantly raised its support for solar energy. In 2023, the government will allocate EUR 600 million to subsidise solar system installations which is almost EUR 200 million more than the amount provided in 2022.

(EUR 1 = USD 1.077)

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