France reduces VAT to 5.5% for solar up to 9 kW

The French Senate has approved France's 2025 Budget Law, cutting the value-added tax (VAT) to 5.5% for PV systems up to 9 kW from October 2025. Industry professionals say the delay might prompt homeowners to postpone installations to secure the lower rate.

The French Senate has approved the 2025 Budget Law, which reduces the VAT for PV systems up to 9 kW to 5.5%. Previously, only systems under 3 kW could claim a preferential VAT rate of 10%, leading many homeowners to limit the site of their installations, rather than face the higher 20% rate.

Groupement Des Particuliers Producteurs D'electricite Photovoltaique (GPPEP), a French association of small power producers, has campaigned for years to align the VAT rate with that in the construction sector, supporting larger residential installations.

It claims that a 5.5% VAT, the same as for building and energy improvement work, aligns better for installers and craftsmen. GPPEP President Joël Mercy called it an opportunity to curb “eco-delinquency,” claiming that a lower VAT would help prevent VAT recovery scams.

The application of the new measure remains unclear and awaits another ministerial decree, due by Oct. 1, 2025. This decree will ensure installations maximize self-consumption, meet energy efficiency goals, and adhere to environmental performance standards.

While the measure is welcomed by industry groups such as Enerplan, which has advocated for it, the delayed implementation raises concerns. The VAT reduction won’t take effect until Oct. 1, 2025, leaving an eight-month gap that could lead professionals and homeowners to delay projects.

Industry professionals are calling for quick clarification of the VAT application terms and the introduction of transitional measures to avoid an economic slowdown. Enerplan has said that it is actively engaged with the ministry to help define the details of the decree and secure the sector’s future.