This article analyses the profitability of investments in private photovoltaic (PV) modules (hereinafter 'PV modules') in Germany. Investments in private PV modules have been promoted through governmental programs since the early 1990s. Promotion has been extended in 2000 and 2004 in the form of guaranteed market price exceeding fixed fees for electricity produced by private PV modules. In addition to these programs, there are several preferred tax treatments and special debt financing programs for such investments. However, we show that profitability based on the net present value (NPV) under consideration of taxation depends on various assumptions. Despite the intensive subvention in terms of fixed fees, low interest rates on debt, and additional write-off possibilities for tax purposes, the results of the investigation advise private investors to be careful with investments in rooftop PV modules under the current parameter situation.
Intertax