Tax Credits & Financing For Renewable Energy Projects.
To read a summary of the Tax Credit system operated by the French Government for Renewable Energy projects please click on the link below. This information was originally published in our April 2009 newsletter.
For a more detailed insight please click on the link below for a translation of the French Finance Act relating to this area:
Tax Credits - English Translation.
Tax Credits and other benefits in France for Home Energy Conservation:
Tax Credits are available for certain types of heating and energy saving works for your French home.
You do not necessarily have to pay tax in France to obtain the Tax Credit and if the amount of Tax Credit is more than you actually pay in tax, then the taxman will send you a cheque for the balance!
In fact, if you pay no tax in France but are still eligible under the requirements of the scheme you could receive a cheque for the total amount of Tax Credit.
It is available to anyone who occupies a property in France as their principal home. The eligible works includes most types of home energy conservation, provided the installation meets agreed performance standards of energy efficiency.
You do need to check with your installer to make sure the products comply with the efficiency requirements and regulations.
In most cases, the tax credit is only available for the product costs , however the products MUST BE supplied and installed by the same company who must be registered to supply and install such equipment.
It is worth noting that the Tax Credit is available for the “ttc” (including TVA / VAT) product cost.
Tax credits are not available for DIY projects. In fact, it can actually work out lower cost if you have a system professionally installed as in many cases you may also benefit from reduced rates of TVA (VAT) also. TVA is generally charged at 19.6%, however, subject to certain criteria this is reduced to 5.5%.
An example:
DIY Solar Hot Water System
Product cost €4650 HT (excluding TVA)
TVA at 19.6% is €911.40
Grand total is €5561 ttc.
For the same system professionally installed:
Product cost €4650 HT (excluding TVA)
Installation cost at say €2000 HT
Assuming TVA at 5.5% is €365
Pre Tax Credit total is €7015 ttc.
Post Tax Credit total is less €2453 (50% of the ttc product total) giving a final total of €4562 ttc
All types of residential property are eligible for the tax credit, although in relation to thermal insulation and condensing boilers the property must be at least two years old.
The scheme was due to end on 31st December 2009 but has now been extended until 31st December 2011 – however – the percentage of Tax Credit may also be reduced from 1st January 2010. The maximum amount of Tax Credit is €8000 for one person, and €16,000 for a couple, which is increased by €400 for each additional person in the household.
The Eco Prêt
Tax credits are also available with an interest free loan known as the “eco prêt” which is generally available for similar energy efficient equipment.
The eco prêt is an interest free loan of up to €30,000 and is non means tested – however- it is a requirement that at least two types of energy efficient systems are installed, i.e. a Solar Hot Water System and a Solar PV Electricity system for example. It is also only available for those with an income of less than €45,000 per annum.
Other assistance
In some Departments there are even more financial grants available so do check with your Mairie and so on to see just what is on offer.
Summary
The Tax Credit scheme is generous and, if you qualify, something that you must take advantage of.
Your supplier should be able to help but do just check that the system they propose is eligible and don’t forget the same company MUST both supply and install the equipment in nearly all cases.
We are pleased to offer advice on tax credits and other finance options wherever possible.
For further information or to discuss the possibilities please call or email us at anytime.
Email info@ecopower.eu.com
Telephone +33 (0) 553 01 20 44