Tax barriers holding back German solar expansion on farmland – energy industry association

The expansion of solar farms on Germany's agricultural land should not be held back by tax barriers, energy industry association BDEW said in a position paper. According to the lobby group, farmers face significant burdens as fields leased to ground-mounted photovoltaic (PV) systems are no longer classed as agricultural assets for tax purposes, which risks the loss of inheritance and gift tax benefits.

“For farmers, this can result in significant tax burdens in the event of inheritance or gifting – in some cases even higher than the total lease income over the lifetime of a solar park,” said BDEW head Kerstin Andreae.

Land should still qualify as an agricultural or forestry asset during its temporary use for solar power production, BDEW argued, as the areas are not permanently diverted from agricultural use. The current inheritance law provisions complicate lease agreements and create uncertainty, slowing down the expansion of large-scale solar farms, it added. Solar farms should be classified “as temporary, public-interest special use” and granted partial relief from inheritance tax, BDEW said. Farming industry lobby group DBV backed this position, Tagesspiegel Background reported.

Germany aims to bring the renewables share in power consumption to 80 percent by 2030, with solar and wind power as the main sources. Renewables already provided nearly 56 percent of the country’s gross electricity consumption in 2025. The country aims to expand solar capacity to 215 gigawatts (GW) by 2030 – up from about 100 GW at the end of last year – with a combination of large ground-mounted systems and small-scale rooftop solar. 

Special regulations on inheritance tax already exist for agri-voltaics, where solar power production and agricultural practices are combined. In a 2025 report that considered all types of agricultural land in Germany for solar PV installation, research institute Fraunhofer ISE found that some 500 GW of peak solar power capacity could be installed on Germany’s agricultural land, 100 GW more than the country’s 2040 expansion targets.