The Swedish government is considering reducing the subsidy for solar installations and removing the income tax reduction for households and businesses that micro-produce renewable.
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"Sweden has been the fastest growing market in the Nordics for a while thanks to this subsidy," said Andreas Thorsheim, founder of Norwegian solar energy platform Otovo. "It
Today, those who install solar cells receive a tax deduction of 20 percent. As of July 1 next year, the government and the Sweden Democrats are lowering the level to 15 percent, as part of the budget proposals for 2025.
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The Swedish government is considering reducing the subsidy for solar installations and removing the income tax reduction for households and businesses that micro-produce renewable electricity. Svensk Solenergi, Sweden’s leading solar association, has criticized the proposals.
There are two main subsidies, the Green Deduction (grön teknik) and ROT. Generally, one can avail of either the grön teknik or the ROT deduction, but not both. In the case of solar roof installations, it's possible to utilize both the ROT and grön teknik.
It also plans to scrap the tax reduction for the micro-production of renewable electricity. The ministry said in a statement on the government’s website that installations have increased sharply, which is why there is no longer a need to subsidize solar cells.
If agreed upon, the reduced subsidy for solar cells would come into force on July 1, 2025, while the removal of the micro-production tax reduction would occur at the start of 2026. The ministry said the policy changes will help to increase tax revenue by up to SEK 880 million ($86.7 million) in 2026.
After that, the company asks for a refund from the tax authorities. So, you don't have to handle the deduction yourself. To be eligible for the ROT deduction on a solar panel installation, the installation must be carried out by a company that is registered for F-tax (a Swedish corporate tax).
These changes could reshape the landscape for green energy investments in Sweden, a country renowned for its ambitious renewable energy targets. Critics of the proposal argue that reducing incentives for green energy could slow down the progress towards Sweden’s renewable energy goals.
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