The world of agricultural photovoltaics is gaining traction, offering farmers a way to generate clean energy and potentially boost their income. But let’s be honest, the tax side of things can seem a bit daunting. It’s not always straightforward, and the rules can change depending on your setup. Things like who you are as a producer, how much money you’re making from selling electricity, and even the size of your solar panels all play a role in how you’re taxed. This guide aims to break down agricultural photovoltaic taxation so you can make informed decisions for your farm.

Key Takeaways

• The tax treatment for agricultural photovoltaic projects hinges on your producer status, the revenue generated from electricity sales, and the installation’s power capacity.
• Income from selling electricity can often be integrated into your farm’s agricultural profits (Bénéfices Agricoles – BA) under specific conditions, particularly regarding revenue thresholds and the type of installation.
• For companies and agricultural corporations, Corporation Tax (Impôt sur les Sociétés – IS) applies to photovoltaic revenues, with specific rates depending on turnover.
• While agricultural activities are generally exempt from the Territorial Economic Contribution (CET), the electricity production component of a photovoltaic installation may be subject to CFE, often at a minimum rate.
• Photovoltaic installations on roofs are typically exempt from Property Tax (Taxe Foncière) and Development Tax (Taxe d’Aménagement), whereas ground-mounted systems are generally subject to these taxes.

Understanding the Tax Regimes for Agricultural Photovoltaic Taxation

Installing solar panels in the agricultural sector raises important questions regarding taxation. The tax regime applicable to income generated from electricity sales depends on several key factors. It is therefore essential to understand these mechanisms to optimise the profitability of your solar project.

Determining the Tax Regime Based on Producer Status

The status of the farmer is the primary criterion determining the tax regime. Whether you are an individual farmer, an SCEA, a GAEC, an EARL, or a GFA, the tax rules can vary. It is important to know if you are subject to an actual regime (simplified or normal) or a micro-enterprise regime. This distinction directly influences how income from electricity production is declared and taxed.

Impact of Turnover on Regime Choice

The amount of your annual turnover from the sale of solar electricity plays a decisive role in choosing the tax regime. For installations exceeding 3 kWc, two main options are generally available: the micro-enterprise regime, applicable below certain income thresholds, or the simplified actual regime. The latter allows for the deduction of expenses and depreciation, and offers the possibility of recovering VAT on the investment. It is also possible to opt for a micro-enterprise if revenues do not exceed €72,500.

Influence of Installation Power

The power of your photovoltaic installation, measured in kilowatt-peak (kWc), also has a significant impact on your taxation. Small installations, generally up to 3 kWc, can benefit from a total income tax exemption, provided they are not used in a professional context. Beyond this threshold, income is taxed differently. For example, installations with a total power not exceeding 100 kWc may be exempt from certain taxes.

It is crucial to carefully analyse your specific situation, taking into account your status, the power of your installation, and your projected income, in order to choose the most advantageous tax regime. A preliminary study can help you anticipate the tax implications and maximise the gains from your solar project. Do not hesitate to consult the information available on the contract with EDF OA to better understand the electricity sales mechanisms.

Here is an overview of the tax regimes according to status and power:

Producer Status	Installation Power	Type of Tax	Rate / Conditions
Individual	Up to 3 kWc	Income Tax	Non-taxable (mandatory declaration)
Individual	More than 3 kWc	Income Tax	Micro-enterprise Option or Actual Regime
Company / Corporation	Variable	Corporation Tax	Normal IS rate

It should also be noted that land rental for solar panels generates rental income that must be declared as such, as stipulated by the rules concerning agricultural land rents.

For businesses and corporations, the taxation of photovoltaic income follows the rules of Corporation Tax (IS). Local authorities must also master these tax frameworks for the integration of solar projects.

Taxation of Income from Electricity Sales

The income you derive from selling electricity produced by your photovoltaic installation is subject to tax. How this income is declared and taxed primarily depends on your status, the amount of your turnover, and the power of your installation.

Attaching Ancillary Income to Agricultural Profits

For a farmer, income from electricity sales can be considered ancillary income to your main activity. This means that it can be integrated into your Agricultural Profits (BA) under certain conditions. Article 75 of the General Tax Code (CGI) specifies that these revenues can be attached to BA if they do not exceed €100,000 and represent less than half of your overall agricultural income. If these thresholds are exceeded, it may be necessary to consider another form of taxation for these specific revenues.

Conditions for Integrating Revenues into Agricultural Profits (BA)

Integrating income from electricity sales into BA is an interesting option to simplify your taxation. To benefit from it, you must respect the aforementioned ceilings: an annual turnover not exceeding €100,000 and these revenues not representing more than 50% of your total agricultural income. If your installation is small, for example up to 3 kWc, you could even be exempt from tax on this income, in accordance with Article 35 ter of the CGI. For larger installations, beyond 3 kWc, you have the choice between the micro-enterprise regime or the simplified actual regime.

Turnover Thresholds for the Micro-enterprise Option

If you opt for the micro-enterprise regime for your photovoltaic income, be aware that there are turnover thresholds not to be exceeded. For electricity sales, these thresholds are generally aligned with those for service provision. Currently, your annual revenues must not exceed €72,500. Under this regime, you declare a percentage of your turnover (often 29% for electricity sales) which will be added to your taxable income. This is a simple option, but it does not allow you to deduct your actual expenses. If you sell your surplus electricity, EDF OA is a potential buyer that offers regulated tariffs for installations under 100 kWc, providing some income stability over 20 years sell surplus electricity.

It is important to carefully assess whether the micro-enterprise regime is the most advantageous compared to your actual expenses. Sometimes, the simplified actual regime, although more complex, allows for better tax optimisation through the deduction of costs and the recovery of VAT on the investment.

Agricultural Photovoltaic Taxation and Corporation Tax (IS)

For agricultural holdings that choose to generate income through the sale of solar electricity, opting for Corporation Tax (IS) is a path to consider, particularly for structures such as agricultural civil companies or businesses. This tax regime applies to income derived from the production and sale of electricity.

Application of IS for Businesses and Companies

When your photovoltaic activity is carried out within the framework of a business or company, the profits made are subject to Corporation Tax. The tax rate depends on the amount of annual turnover generated by the electricity production activity. It is important to clearly distinguish between income from the main agricultural activity and that from energy production.

Tax Rate on Photovoltaic Income

Companies are generally taxed at the normal IS rate. For the year 2024, this rate was 28% for profits up to €500,000 turnover, and 31% beyond this threshold. These rates may change, so it is advisable to stay informed of the latest tax provisions.

Case of Agricultural Civil Companies

Agricultural civil companies (such as SCEA, GAEC, EARL) may also be subject to IS for their ancillary income, including that from electricity sales. If the agricultural holding is subject to an actual tax regime, photovoltaic income can be integrated. It is essential to check the specific conditions for applying IS to your structure, particularly regarding the attachment of ancillary income to agricultural profits, which is possible within certain limits, such as not exceeding €100,000 in revenue and half of the overall agricultural income. Good management allows for the recovery of VAT on the investment, a significant advantage for the total cost of the installation.

It is crucial to clearly distinguish the nature of income to apply the correct tax regime. Agricultural income and electricity production income are not always taxed in the same way, and incorrect classification can lead to tax adjustments.

The Territorial Economic Contribution (CET) and Agricultural Photovoltaics

The Territorial Economic Contribution (CET) is a local tax levied on businesses. It consists of two taxes: the Business Property Tax (CFE) and the Business Added Value Contribution (CVAE). For agricultural photovoltaic installations, how these taxes apply depends on several factors, including the nature of the activity and the power of the installation.

CFE is calculated based on the rental value of real estate used by the business. CVAE, on the other hand, is based on the added value produced by the business. In the agricultural sector, the distinction between the main agricultural activity and the electricity production activity is important for determining liability for these taxes.

CFE Taxation for Electricity Production Activity

The agricultural activity itself generally benefits from a CFE exemption. However, if a farmer develops a photovoltaic electricity production activity, this new activity may be subject to CFE. In practice, the rental value of assets used for electricity production (such as solar panels) is often very low, or even zero. Consequently, CFE taxation is frequently based on the minimum amount provided by law. This means that even if the rental value is low, a minimum amount of CFE will be due. It is important to note that if the farmer rents their building or land to a third party for the installation of solar panels, it is the third-party operator who will be liable for CFE for this specific activity, while the farmer retains their exemption for their main agricultural activity.

CFE Exemption for Main Agricultural Activity

The main agricultural activity of a farmer remains exempt from CFE. This exemption applies even if photovoltaic installations are present on the site. It is only the distinct activity of electricity production that may be subject to CFE. If the total power of the photovoltaic installations does not exceed 100 kWc, or if the farmer opts for total individual self-consumption, additional exemptions may apply. It is always advisable to check the specific conditions with local authorities or a tax advisor to ensure that all possible exemptions are claimed. CVAE, for its part, is generally less impactful for small agricultural installations, as it is proportional to the added value, which may be limited in this context. For total electricity resale installations, it is possible to refer to the eligibility conditions for the sale of photovoltaic surplus.

It should be noted that CFE is due from 1 January of the year following the connection of the installation to the grid. The amounts may vary depending on the commissioning date of the solar panels.

Property Tax Applied to Agricultural Photovoltaic Installations

Property tax, a local tax, can apply to agricultural photovoltaic installations, but its treatment depends on their nature and location. It is important to understand the rules to anticipate this financial impact.

Property Tax Exemption for Rooftop Installations

For photovoltaic installations that are integrated directly onto the roofs of agricultural buildings, the general rule is exemption from property tax. These installations are often considered as ancillary elements of the main building and do not change its primary purpose. This means that the farmer will not have to pay this tax for the solar part of their operation, provided the installation is indeed on the roof.

Property Tax Liability for Ground-mounted Installations

Conversely, when solar panels are installed on the ground, on agricultural land, the situation is different. These installations are generally subject to property tax on undeveloped properties. The calculation is based on a fraction of the cadastral rental value of the installation, multiplied by the rates voted by local authorities. It is therefore essential to inquire about local specificities.

Calculation of Property Tax for Agricultural Assets

The calculation of property tax for ground-mounted installations takes into account the cadastral rental value of the installation. A percentage of this value serves as the taxable base. For example, if the cadastral rental value of your ground-mounted installation is €1,000, the calculation base could be €500. If the local tax rate is 10%, the tax due would then be €50.

It is important to note that the presence of ground-mounted solar panels can potentially increase the cadastral rental value of the land, which may have an impact on the amount of property tax due.

Here is a summary table of common situations:

Type of Installation	Property Tax Liability
Panels on agricultural building roof	Exempt
Ground-mounted panels on agricultural land	Subject (calculation based on cadastral rental value)

It is always advisable to check with local tax services to find out the precise terms of application of property tax in your specific situation, especially if you are considering significant solar projects. Analysing the tender selection criteria can also provide indications of additional costs to anticipate.

Development Tax and Agricultural Solar Panels

Development tax is another point to consider when discussing agricultural photovoltaic taxation. It specifically concerns installations that require planning permission, such as a building permit or a prior declaration of works. It is important to note that this tax only applies to ground-mounted photovoltaic installations. Solar panels fixed to the roofs of agricultural buildings are generally exempt. This is a key distinction to remember to fully understand the financial implications.

Conditions for Applying Development Tax

Development tax applies as soon as planning permission is required for the installation. For agricultural solar panels, this primarily concerns large-scale projects installed directly on the ground, which alter the appearance of the land and require validation by the local planning departments. The purpose of this tax is to contribute to the financing of public facilities necessary for the development of the municipality.

Tax Exemption for Rooftop Installations

Good news for many farmers: solar panels installed on the roofs of agricultural buildings benefit from a total exemption from development tax. This measure aims to encourage the use of already built surfaces for renewable energy production, without increasing the tax burden on projects that do not directly impact the ground or landscape significantly. However, the installation must be well integrated into the roof and not change the main purpose of the building.

Calculation of Tax for Ground-mounted Installations

For ground-mounted installations subject to development tax, the calculation is based on several elements. It takes into account the taxable area of the installation, which corresponds to the footprint of the panels. A flat rate value is applied per square metre, set at €10 for photovoltaic installations. To this is added an overall tax rate, defined by local authorities (municipality and department). This rate varies depending on the municipality. For example, a ground-mounted installation of 40 m² in a municipality with an overall rate of 5% would incur a development tax of €200 (40 m² * €10/m² * 5%). It is therefore advisable to inquire at your local council to find out the applicable rate in your area. The amount of the development tax can be paid in one or two instalments depending on the municipality. It is also possible to benefit from an additional exemption in certain specific areas, such as rural revitalisation zones (ZRR) or for certain types of agricultural buildings, so it is always useful to check with local planning services. Ground-mounted installations may also be subject to a tax of €10 per square metre, as mentioned in the information on the tax per square metre.

It is important to clearly distinguish between ground-mounted installations and rooftop installations, as the tax rules, particularly for development tax, differ considerably. A good understanding of these distinctions allows for anticipating costs and optimising the taxation of your agricultural photovoltaic project.

The Flat-rate Tax on Network Companies (IFER)

The Flat-rate Tax on Network Companies, better known as IFER, is a tax that applies to certain types of businesses, particularly those active in the energy sector. It was introduced to contribute to the financing of local authorities and local public establishments. For photovoltaic installations, its application depends on several factors, including the power of the installation.

Establishment and Objective of IFER

IFER was created by the 2010 Finance Act. Its main objective is to generate tax revenue for local authorities, by targeting businesses that benefit from specific infrastructures or networks. It concerns various sectors such as energy, telecommunications, and rail transport. In the energy sector, it particularly targets electricity producers.

Application of IFER to Photovoltaic Power Plants

IFER applies to photovoltaic power plants whose power exceeds a certain threshold. For agricultural installations, it is important to note that exemption is possible if the total power of the installation is less than 100 kW. Beyond this threshold, the tax becomes due. It should be noted that the rate of this tax has been revised, decreasing from €7.65/kW/year to €3.254/kW/year for the first twenty years of operation, which represents a significant relief for agrivoltaic projects.

IFER Amounts According to Commissioning Date

IFER amounts can vary depending on the date on which the photovoltaic installation was commissioned. For example, a rate of 3.542 euros per kilowatt of installed electrical power applies on 1 January of the tax year for power plants [5560]. It is therefore essential to check the specific conditions related to the commissioning date of your installation to correctly calculate the amount of this tax. Grid connection costs can also be a factor to consider, although mechanisms such as the 60% reduced purchase tariff since March 2022 aim to mitigate their impact for photovoltaic professionals [ab8a].

It is important to fully understand the power thresholds and commissioning dates to anticipate the amount of IFER.

Value Added Tax (VAT) in the Agricultural Photovoltaic Sector

Value Added Tax (VAT) is a serious consideration when discussing agricultural photovoltaic installations. It affects both the purchase of equipment and the income generated from electricity sales.

Applicable VAT Rates for Agricultural Installations

VAT rates vary according to several criteria, including the power of the installation and the commissioning date. For agricultural installations, the rates can be as follows:

• 10%: Generally applied for installations with a power not exceeding 3 kWc, if they are installed on a dwelling built more than two years ago.
• 20%: This rate applies to installations with a power greater than 3 kWc.
• 5.5%: A reduced rate is provided for installations up to 9 kWc intended for self-consumption, applicable from October 2025, under certain conditions. The addition of a storage battery can also allow you to benefit from this reduced rate.

It is important to note that these rates may change, so it is advisable to stay informed of the latest regulations.

Possibility of VAT Recovery on Investments

For farmers subject to VAT, it is often possible to recover VAT on expenses related to the photovoltaic installation. This includes the purchase of panels, inverters, mounting structures, and installation work. For this, the installation must be directly linked to the taxable agricultural activity. If the electricity production activity is considered a distinct and professional activity, the VAT recovery rules apply normally. Farmers who are not subject to VAT cannot recover this tax. You must carefully check your specific situation with the tax authorities or a professional to understand the recovery procedures. Businesses investing in solar can find useful information on the French photovoltaic market.

Impact of VAT on the Total Cost of the Installation

VAT represents a significant portion of the cost of a photovoltaic installation. A 20% rate can considerably increase the initial investment. However, the possibility of recovering this VAT for professionals subject to it can reduce this impact. For installations benefiting from reduced rates (10% or 5.5%), the acquisition cost is even more advantageous. It is therefore essential to anticipate this financial aspect when planning your solar project. Understanding the different tax rules, including those relating to VAT, is crucial for optimising the profitability of your project, and it may be wise to consult local planning guidelines for any potential constraints.

Aid and Grants for Agricultural Photovoltaic Taxation

To encourage the development of renewable energies in the agricultural sector, several aid and grant schemes are available. These financial supports aim to reduce the initial cost of installations and improve their profitability. It is important to fully understand the eligibility conditions and how they can be combined to optimise your project.

The Self-consumption Grant and its Conditions

The self-consumption grant is aid paid by EDF OA (Obligation d’Achat – Purchase Obligation) for self-consumption installations with surplus electricity sales. Its amount is calculated based on the power of the installation and is paid over a period of five years. To be eligible, the installation must be carried out on an agricultural building, by an RGE (Recognised Environmental Guarantor) certified professional, and its power must not exceed 100 kWc. This grant is a significant boost for farmers who wish to produce and consume their own electricity.

Combining Aid and Grants with Other Schemes

It is essential to check the compatibility of different aids. The self-consumption grant, for example, is generally not cumulative with other national aids such as MaPrimeRénov’ or Energy Savings Certificates (CEE) when they directly concern the photovoltaic installation. However, specific aids for the energy renovation of agricultural buildings could be compatible. It is therefore advisable to inquire precisely with the funding bodies to avoid any unpleasant surprises.

Eligibility for Aid for Agricultural Installations

Eligibility for aid depends on several factors specific to each agricultural project. In addition to the power and type of installation (on building or ground-mounted), geographical location and the farmer’s status can play a role. For example, some aids may be conditional on installation on agricultural sheds or livestock buildings. It should also be noted that ground-mounted installations may have different eligibility conditions from rooftop installations. For a complete overview of the schemes, consulting information on agricultural photovoltaic installations can be useful.

It is crucial to anticipate the administrative procedures related to aid applications. Rigorous preparation of files guarantees a better chance of obtaining funding and optimising the overall profitability of your solar project.

Administrative Procedures and Tax Optimisation for Farmers

Once your agricultural photovoltaic project is up and running, it’s time to think about administrative formalities and how to optimise your tax situation. This is a rigorous step, but one that can make a real difference to the profitability of your installation.

Obligation to Declare Photovoltaic Income

It is important to know that income from electricity sales, whether from a total sale or a surplus sale, must be declared. How they are declared will depend on the tax regime chosen for your agricultural operation and how you have chosen to attach this income. For example, if you opt for attachment to Agricultural Profits (BA), certain conditions must be met, particularly turnover thresholds. If these conditions are not met, or if you prefer, this income can be declared in the micro-BIC category, with a specific allowance.

• Attachment to Agricultural Profits (BA): Possible if ancillary revenues do not exceed either 50% of agricultural revenues or €100,000. Micro-BA operators cannot opt for this attachment.
• Micro-BIC Option: Allows a 71% allowance on photovoltaic production revenues.
• Actual Regime: Revenues are integrated according to the rules of accrual or cash accounting depending on the regime (simplified or normal).

Tips for Optimising Agricultural Photovoltaic Taxation

Tax optimisation is not about evading tax, but about using legal provisions to your advantage. For agricultural photovoltaic installations, this can involve several points:

1. Choice of tax regime: Carefully analyse whether attachment to BA, the micro-BIC option, or an actual regime is most advantageous based on your turnover and expenses. This choice can be changed annually.
2. VAT management: If you are subject to VAT, recovering it on the initial investment can significantly improve cash flow. You need to fully understand the deduction rules.
3. Anticipation of taxes: Be aware of taxes such as CFE or IFER and understand how they apply to your situation to avoid unpleasant surprises.
4. Exploiting exemptions: Know which installations or activities can benefit from exemptions, for example for CFE on the main agricultural activity.

It is often wise to carry out simulations to compare different tax scenarios before making a final decision. Taxation can be complex, and good planning is key.

Importance of Consulting Experts

Given the complexity of tax regulations and the specificities of the agricultural sector, it is highly recommended to seek advice from professionals. An accountant specialising in the agricultural sector or a tax advisor can help you to:

• Choose the most suitable tax regime for your situation.
• Correctly complete your declarations and optimise your income.
• Understand the impact of different taxes (CFE, IFER, Property Tax) on your activity.
• Benefit from available aid and grants, such as the self-consumption grant, by respecting the eligibility conditions, particularly those set by decree s17.

Getting support from the start of the project can help you avoid costly mistakes and ensure smooth management of your photovoltaic installation. Good administrative and financial preparation is essential for the successful execution and profitability of your project, as highlighted by the importance of good financial planning and administrative procedures for commissioning.

For farmers, managing paperwork and paying less tax is important. We help you see things more clearly and make the right choices for your farm. Come and find out how on our website!

Conclusion: Photovoltaic Taxation, an Asset for Your Solar Project

In summary, the French tax framework for agricultural photovoltaics aims to encourage the energy transition. With schemes such as exemptions for small installations, adapted VAT rates, and potential aid, producing your own electricity becomes more accessible. However, it is important to fully understand the steps to follow, correctly declare your income, and choose the tax regime that best suits your specific situation. By staying informed and anticipating, you can make the most of the advantages offered by photovoltaic taxation for your agricultural operation. You are now better prepared to approach your solar project with greater peace of mind, thanks to clearer and potentially advantageous taxation.

Frequently Asked Questions

What are the main taxes that concern solar panels on a farm?

The main taxes to be aware of are income tax or corporation tax for gains from electricity sales, Property Tax for ground-mounted installations, the Territorial Economic Contribution (CET) such as CFE, and sometimes Development Tax. VAT also applies, but it can often be recovered.

Is solar activity on a farm always taxed?

No, not always. If your installation is less than 3 kilowatt-peak (kWc) and is roof-mounted, you generally don’t have to pay income tax. However, you still need to declare it to the tax authorities. For larger or ground-mounted installations, taxation may apply.

How is income from solar electricity sales taxed?

Income from electricity sales can be added to your agricultural profits if you meet certain rules, such as not exceeding a certain turnover. Otherwise, it is often considered as industrial and commercial profits (BIC) and taxed under a special regime (micro-enterprise) or an actual regime, depending on your turnover.

Do solar panels on a farm roof pay property tax?

Generally, no. Solar panels installed directly on the roof of an agricultural building are considered part of the building and are not subject to property tax. This is different for ground-mounted installations.

What is the Territorial Economic Contribution (CET) for a farmer with solar panels?

The CET includes CFE (Business Property Tax) and CVAE. Agricultural activity itself is often exempt from CFE. If you produce electricity, this activity may be subject to CFE, but often on a minimum basis, especially if the panels are on the roof.

Can I get aid for installing solar panels on a farm?

Yes, there are aids such as the self-consumption grant if you consume part of the electricity produced and sell the surplus. These aids have conditions, for example, the installation must often be carried out by a recognised professional and be on a building.

Do I have to declare my solar income even if I am exempt from tax?

Absolutely. Even if you don’t have to pay tax thanks to an exemption (for example, for small rooftop installations), you must still declare the income you have derived from electricity sales. This is a simple information declaration.

What is the main difference between installing solar panels on a roof or on the ground for a farmer?

The major difference concerns taxation. Rooftop installations often benefit from exemptions for property tax and development tax. Ground-mounted installations, on the other hand, are more likely to be subject to these taxes, as they are considered distinct constructions.