Investing with the §7g Advantage
The investment deduction (IAB) under §7g EStG lets you bring planned solar and storage investments forward for tax purposes – we explain the process neutrally and clearly.
The Investment Deduction Explained Clearly
The investment deduction (IAB) under §7g of the German Income Tax Act (EStG) allows up to 50% of the anticipated acquisition costs of a planned investment to be claimed as a profit-reducing item in advance. One condition is that the business's profit does not exceed €200,000.
For investments in solar plants and battery storage, the IAB can bring the tax effect forward into the planning year and create liquidity. In the year of acquisition, an additional special depreciation of 40% can be used; the straight-line depreciation of a PV plant runs over 20 years.
Bright & Green explains the mechanism neutrally and provides a model calculation via the IAB calculator. We do not provide tax advice – the individual assessment is carried out by your tax adviser.
- Deduct up to 50% of costs in advance
- Profit threshold of €200,000
- 40% special depreciation in the acquisition year
- Straight-line depreciation over 20 years
What You Will Find Here
Everything you should know about the IAB in the context of renewable investments – prepared neutrally.
The IAB Explained Clearly
We explain the investment deduction under §7g EStG in clear, neutral language.
- Core principle
- Legal framework
Process & Conditions
We set out the statutory conditions and the typical timeline of an IAB.
- €200,000 profit threshold
- Deadlines & process
Investing in Solar
We outline how the IAB can be considered in the context of a planned solar plant.
- Planned acquisition
- 20-year straight-line depreciation
Investing in Battery Storage
We explain how the IAB can be applied to planned storage investments.
- Planned acquisition
- 40% special depreciation
Support & Delivery
We support the realisation of the investment – from planning through to commissioning.
- Project delivery
- On-schedule construction
Calculator & Model Calculation
With the IAB calculator, we provide a neutral model calculation for orientation.
- Interactive calculator
- Non-binding orientation
A tax benefit and a real asset in one investment
The investment deduction under Section 7g of the German Income Tax Act combines a tax effect with a real stake in renewable generation.
How the Section 7g IAB works
The investment deduction allows up to 50% of the planned investment costs to be deducted in advance, reducing taxable profit – provided the business profit does not exceed 200,000 euros. In addition, a special depreciation of 40% is possible in the investment year.
This mechanism can pull tax relief forward into the current financial year and free up liquidity. The precise effect depends on your individual situation; this is not tax advice.
- IAB of up to 50% of investment costs
- Profit ceiling of 200,000 euros
- Special depreciation of 40% (not tax advice)
Investing in solar and storage
Behind the tax benefit sits a real asset: a solar or battery storage plant that generates or markets renewable power for years. This ties the tax effect to an ongoing yield from the asset itself.
With our IAB calculator you can run through the tax order of magnitude without obligation. For a binding assessment of your situation, please involve your tax advisor.
- A real asset in solar or storage
- Ongoing yield from renewable generation
- IAB calculator for an initial estimate
From idea to participation
Six steps from a first estimate to an ongoing investment – the tax assessment remains the responsibility of your tax advisor.
- 01
Initial talk and goal
We clarify your investment goals and assess whether an IAB approach fits in principle.
- Goal clarification
- Initial fit assessment
- 02
Calculator and order of magnitude
With the IAB calculator we model the tax order of magnitude using the Section 7g values, without obligation.
- IAB calculator
- Non-binding estimate
- 03
Project selection
We select a suitable solar or storage project as the real asset behind the investment.
- Project selection
- Asset review
- 04
Tax alignment
The concrete tax assessment is made with your tax advisor – we provide the project basis.
- Project documentation
- Alignment with tax advisor
- 05
Investment and delivery
The participation is contractually closed and the underlying project is delivered.
- Contract closing
- Project delivery
- 06
Operation and yield
The plant goes into operation and generates renewable power and yield over its lifetime.
- Commissioning
- Ongoing yield
Why the IAB Can Be Relevant
A statutory instrument for managing liquidity and the timing of investment.
Create Liquidity
The advance deduction can shift the tax burden and free up liquidity.
Tax Deferral
The tax effect is brought forward in time – a deferral, not a subsidy effect.
Planning Certainty
A clear statutory framework under §7g EStG as the basis for your planning.
Combination with Special Depreciation
An additional special depreciation of 40% is possible in the acquisition year.
Common Questions on the IAB
Try the IAB Calculator
Get an initial overview with our neutral model calculation – and talk to us about realising your investment.