Solar panel taxation 2026: income tax, tax return and exemptions

Is solar income taxable?

The answer depends on two factors: the capacity of your system and the self-consumption mode you chose. The French tax code distinguishes three radically different situations, summarised in the comparison grid below.

The key threshold: 3 kWp for a main residence

Article 35 ter of the CGI, introduced by the 2021 finance act, provides a full income tax exemption for households whose photovoltaic system is 3 kWp or less and installed on their main residence. This exemption is unconditional: it applies whatever your other income or tax bracket.

Above 3 kWp: the micro-BIC regime

As soon as the capacity exceeds 3 kWp, or where the article 35 ter exemption does not apply, surplus sale income is classed as industrial and commercial profits (BIC). For households, the micro-BIC regime applies automatically as long as annual income stays below 77,700 €, which is always the case for residential photovoltaics.

The actual BIC regime (declaration of actual expenses, depreciation) is in practice only relevant for commercial or high-capacity installations. For a household with 3 to 9 kWp, you will never need it.

Micro-BIC: the flat-rate 71% allowance

The micro-BIC regime is by far the most advantageous for residential photovoltaic producers. It allows a flat-rate deduction of 71% of gross income without having to justify any expense. Only the remaining 29% is added to your taxable income.

Worked calculation for a 6 kWp system

Take the example of a household with a 6 kWp system in self-consumption with surplus sale. On average, such a system generates about 6,600 kWh/year, of which about 30% (1,980 kWh) is exported to the grid and bought back by EDF OA at the rate of 0.011 €/kWh (surplus buy-back rate set by the CRE, the French energy regulator, Q1 2026).

For a household in the 11% marginal tax bracket, solar panels generate additional tax of about 1 € per year, far less than the savings made on the electricity bill (generally 700 to 1,200 €/year for a system of this size).

How do I fill in the tax return?

Micro-BIC income is declared on form 2042-C-PRO, in the section “Non-professional BIC: micro regime”. You enter the gross amount in box 5KO, that is, the total of the sums received from EDF OA during the tax year, before any allowance.

The annual EDF OA production statement is generally sent by post or email in January or February. It summarises the total amount paid for surplus sales in the previous year. Keep it with your tax documents for 3 years (limitation period).

VAT and the exemption threshold

Contrary to a common belief, selling surplus photovoltaic electricity involves no obligation to charge and pay over VAT for households. This favourable regime is called the franchise en base de TVA (VAT exemption threshold).

How does a household compare with the threshold?

For a 9 kWp system, one of the most powerful in residential settings, surplus sale income is at most about 44 €/year (40% export rate and surplus buy-back rate of 0.011 €/kWh). That is about 0.1% of the exemption threshold of 36,800 €. Even by combining several systems, a household never reaches this threshold.

What this means in practice

• You do not have to register for VAT or obtain an intra-EU VAT number.
• You do not charge VAT on the sums paid by EDF OA.
• You file no VAT return (monthly CA3 or annual CA12).
• In return, you cannot recover the VAT paid when your panels were installed (20% or 5.5%). This recovery is only possible by opting for the actual VAT regime, which makes no economic sense for a household.

Pure self-consumption: zero tax

Pure self-consumption means using all of the electricity generated by your panels, without exporting anything to the public grid. In this case, no income is received, so there is nothing to declare and no tax to pay.

Difference from self-consumption with surplus sale

Most residential systems run on self-consumption with surplus sale: you use the electricity generated first, and the excess is exported to the grid and bought by EDF OA. It is this surplus sold that generates taxable income; self-consumption itself is never taxable.

Plug-and-play and balcony kits (no export)

Small balcony or window kits (300 to 800 W), plugged into a household socket, run in full self-consumption with no grid export. The output is immediately absorbed by the appliances plugged in (fridge, TV, chargers).

• No tax declaration needed (no income generated).
• No contract with EDF OA (no grid export).
• No right to the self-consumption bonus (prime à l’autoconsommation): it is reserved for systems that export to the grid.

Property tax: impacts and possible exemptions

Property tax is calculated from the property’s cadastral rental value. Installing solar panels can, in theory, increase this rental value if the panels are building-integrated (BIPV). In practice, the impact is negligible for standard on-roof installations.

Possible temporary exemption: art. 1383-0 B CGI

Local authorities (municipalities and EPCI, the inter-municipal bodies) can vote a temporary 2-year exemption from the municipal share of property tax for renewable energy installations (art. 1383-0 B CGI).

• This exemption covers only the municipal share: the departmental and regional shares remain payable.
• It is optional: not all municipalities apply it.
• To benefit, submit a request to your local tax office (centre des finances publiques) with your Enedis (the grid operator) commissioning certificate, before 1 January of the year following installation.

Building-integrated vs on-roof panels

• On-roof panels (mounted on the existing roof): generally do not significantly affect the cadastral rental value. The impact on property tax is almost nil.
• Building-integrated panels (BIPV) (replacing tiles or slates): may be taken into account in a cadastral reassessment. The impact remains marginal, in the order of a few euros a year.

How to declare your solar income: the 5 steps

Declaring solar income is a simple process that only takes a few minutes during your annual tax return. Here are the 5 steps to follow, from receiving the EDF OA statement to checking your tax assessment notice.

Step 0: Notify Enedis of your installation (if > 3 kWp)

For any system above 3 kWp, you must notify Enedis of your project using Cerfa form no. 15523*02 at least 1 month before commissioning. This step is mandatory to obtain the purchase obligation contract (COA, contrat d’obligation d’achat) with EDF OA, without which you cannot sell your surplus.

Step 1: Get your EDF OA statement

Every January, EDF OA (the EDF feed-in tariff scheme) sends you a summary statement showing the total amount paid for surplus sales in the previous tax year. This is your only supporting document for the declaration. Keep it.

Step 2: Check your regime

Check whether you are eligible for the article 35 ter exemption of the CGI (French General Tax Code): system ≤ 3 kWp on a main residence. If so, you have nothing else to do. If not, move on to step 3.

Step 3: Enter the gross amount in box 5KO

On impots.gouv.fr or on the paper form 2042-C-PRO, go to the section “Non-professional BIC: micro regime” and enter the gross amount in box 5KO.

• To enter: the gross amount received from EDF OA during the year (before any allowance).
• Not to do: do not apply the 71% allowance yourself; the tax authority calculates it automatically.

Step 4: The allowance is automatic

The tax authority automatically applies the flat-rate 71% allowance to the amount declared in box 5KO. The taxable base is therefore 29% of your gross income. You have no calculation to make.

Step 5: Check your tax assessment notice

When you receive your tax assessment notice (summer of year N+1), check that the non-professional BIC line appears with a consistent amount (∼ 29% of your EDF OA income). If anything looks wrong, contact your local tax office through the secure messaging service on impots.gouv.fr.

Special cases

1. Agricultural buildings

Photovoltaic installations on agricultural buildings may qualify for a reduced VAT rate of 10% under certain conditions. Consult the DGFiP (the French tax authority) or an accountant to check your eligibility.

2. Co-ownerships

For a collective installation in a co-ownership, income is shared among co-owners in proportion to their share. Each co-owner declares their share in box 5KO of form 2042-C-PRO.

3. Installations in the French overseas departments (DOM)

The applicable VAT is 8.5% in Guadeloupe, Martinique, La Réunion, French Guiana and Mayotte (instead of 5.5% to 20% in metropolitan France). EDF OA buy-back rates are generally higher than in metropolitan France, and some local authorities offer additional aid.

Frequently asked questions about solar taxation