Tax exemption in solar energy

During 2019, the solar energy industry experienced some changes regarding the tax exemption of equipments used for these purposes. Prior to March 2019, Article 38 of Law 7447 on the Regulation of the Rational Use of Energy (1984) stipulated a list of just over 20 tax-exempt goods for the use of solar energy. As of that month it was reduced to seven items or products which play a leading role in solar systems for water heating and electricity generation. Here is the list of tax exemption in solar energy in Costa Rica:

  • Solar Water Heaters
  • Photovoltaic Modules (known as solar panels)
  • Micro and mini hydroelectric generators
  • Mini wind generators
  • DC/AC inverters for photovoltaic systems and mini hydroelectric generators
  • Batteries for photovoltaic systems and mini hydro and wind generators
  • Battery charge controllers for photovoltaic, wind generated or hydroelectric systems.

All other components of a system that are not mentioned in the above list do not enjoy tax exemption. One example is the aluminum structure used to hold the solar modules or panels to the roof structure where they are anchored. Another example is the solar cable, which is also not exempted. These two goods were included in the previous exoneration but not in the new one of March 2019.

Another relevant change is that in July 2019 the Law for the Strengthening of Public Finances came into effect, stipulating that services would not be tax exempt; in the case of solar energy the maintenance service, installation and others start with the 13% tax rate.

Therefore, in Costa Rica the industry operates with these modifications and unites to protect the interests of Costa Ricans, in order to make it increasingly easier and more accessible to use clean energy and be part of this regenerative lifestyle for our planet.

Written by: Adriana Zeledón, Operations Director of greenenergy®.