Financial support for installing solar panels in Spain has changed considerably compared with what many people still have in mind. The major direct grant programmes financed by European Next Generation funds, which covered up to 40% to 50% of installation costs, closed their application periods at the end of 2023 in most autonomous communities. This does not mean that government support for solar panels has disappeared, but rather that it is now divided into three different categories: national tax deductions, occasional regional grant programmes and municipal tax reductions. It is worth understanding these properly because they vary considerably from one region to another. In this article, we review which grants are still available in the different regions and what you can do to make sure you do not miss any opportunities.
What types of financial support are available for installing solar panels?
Before looking at each autonomous community, it is important to understand the overall picture, because the same three types of support are available throughout the country, although the amounts and deadlines differ. The first is the personal income tax deduction (IRPF), which applies nationally and allows you to recover between 20% and 60% of the investment through your income tax return, depending on the level of energy efficiency improvement achieved, with a maximum deduction base ranging from €5,000 to €15,000 accumulated. This deduction remains in force for installations completed up to 31 December 2026, following an extension through a Royal Decree Law.
The second option consists of regional direct grant programmes, managed by the energy agency of each autonomous community. These provide a fixed amount per kWp installed and, unlike tax deductions, do not depend on your income tax return but on whether funding is available when you apply. They are the most attractive option when applications are open, but also the least predictable: funds are allocated in order of application and programmes may remain closed for months between funding rounds.
The third option consists of municipal reductions in IBI property tax and ICIO construction tax, which each local council regulates independently. These are usually the most stable forms of support over time, although the amounts vary considerably depending on the municipality.
Solar panel grants by autonomous community
With that general overview in mind, here is what is available in each of the autonomous communities where people most frequently ask about this subject.
Solar panel grants in the Valencian Community
Solar panel grants in the Valencian Community have undergone a similar change to those in the rest of the country. The national Next Generation programme managed by IVACE, which covered up to 40% of the cost for residential installations, closed its application period at the end of 2023. In 2026, IVACE maintained more specific occasional funding programmes for installations in municipal buildings and photovoltaic projects in tourism businesses. However, the application periods for both have already closed, meaning there is currently no general solar panel grant in the Valencian Community open to private homeowners.
What remains available is a specific regional personal income tax deduction, also managed by IVACE through a certificate that can be requested online. However, it is important to know that it is not compatible with the national deduction, so you must choose one of the two. Municipal IBI and ICIO tax reductions are also available. According to the latest report by Fundación Renovables, these are in force in 44 municipalities in the Valencian Community with more than 10,000 inhabitants, including Catarroja, where the reduction reaches 50% of IBI and 95% of ICIO.
Solar panel grants in the Balearic Islands
The most significant solar panel grant programme in the Balearic Islands for private individuals in 2026 was FOTOPAR, managed by the Government of the Balearic Islands with ERDF funding. It offered €600 per kWp installed for individual self consumption, €710 per kWp for collective self consumption and €420 per kWh for lithium batteries associated with a new installation. The 2026 application period was open between 26 January and 30 April of that year and, at the time of writing, is closed, with no confirmed date for a new funding round.
At the same time, there is the FACTOR programme, also managed by the Balearic Government, which remains open for longer but focuses on batteries and charging points rather than the installation of solar panels themselves for private individuals. In terms of taxation, the Balearic Islands also offer their own regional personal income tax deduction for sustainability improvements to primary residences, with a percentage that can reach 50% on a maximum deduction base considerably higher than the national average. However, it is advisable to confirm its exact compatibility with the national deduction with a tax adviser before applying. Municipal IBI reductions, ranging from 40% to 100% depending on the local council, complete the available support.
Solar panel grants in Andalusia
Solar panel grants in Andalusia are managed through the Andalusian Energy Agency, which has restructured its programmes into two main categories following the closure of Next Generation funding. On the one hand, there are direct grants aimed at private individuals to improve residential energy efficiency, which in recent funding rounds have covered up to 40% of the cost, with an approximate maximum of €3,000. On the other hand, there is the INCEA programme, aimed at businesses, which can provide more than €100,000 per project for larger industrial installations. Both categories operate through periodic funding rounds that open and close throughout the year, so the exact status of each programme should always be confirmed when preparing an installation quotation.
The Andalusian Energy Agency also allows these direct grants to be combined with the national personal income tax deduction and municipal tax reductions, provided that the total amount of support does not exceed the overall installation cost. Andalusian local councils apply IBI reductions ranging from 10% to 50%, depending on the municipality, for periods of three to five years. In a region with as many hours of sunshine as Andalusia, these reductions can make a significant contribution to the final profitability of the installation.
Financial support for solar panels in Madrid
Solar panel grants in Madrid have followed the same pattern as in the rest of the country. The regional Next Generation programme, which covered up to 50% of installation costs with a budget of approximately €294 million, closed its application period on 31 December 2023. At present, the Community of Madrid does not have a general direct grant programme open for residential self consumption. This does not mean that there are no new initiatives. Some local councils, such as Alcorcón, have launched their own occasional funding programmes to encourage self consumption within their municipalities. It is therefore worth checking your local council’s website as well as the regional government’s website.
Nowadays, the most stable financial support for solar panels in Madrid comes from combining the national personal income tax deduction with municipal IBI reductions. In municipalities such as Pozuelo de Alarcón, Alcobendas and Las Rozas, these range from 10% to 50% for three to five years. There are also ICIO reductions, which reach 95% in many Madrid municipalities. By combining these three forms of support, a solar installation in a detached house in the region can significantly reduce its effective cost, even though the direct grants available a couple of years ago no longer exist.
Solar panel grants in Castilla La Mancha
Solar panel grants in Castilla La Mancha are mainly provided through funding programmes managed by the Directorate General for Energy Transition, aimed at promoting both self consumption and energy storage in the residential and business sectors. Following the end of the initial European funding programmes, the region usually launches incentives subject to the availability of regional funding, focusing on improving the thermal and electrical efficiency of homes. At local level, cities such as Toledo, Albacete and Guadalajara offer attractive IBI reductions, frequently reaching between 30% and 50% for several years, as well as reductions of up to 95% in ICIO for construction work associated with the installation of photovoltaic systems.
Solar panel grants in Aragon
Solar panel grants in Aragon depend on the Department of Economy, Employment and Industry, through the Foundation for the Development of New Hydrogen Technologies in Aragon or the Directorate General for Energy. Although general direct grant programmes experience periods of closure between funding rounds, Aragon stands out for the widespread availability of tax reductions in its most populated municipalities, such as Zaragoza, Huesca and Teruel. It is common to find IBI reductions of up to 50% for five years and substantial reductions in ICIO construction tax to encourage the energy transition in both rural and urban areas.
Financial support for solar panels in Galicia
Financial support for solar panels in Galicia is usually managed by the Galician Energy Institute (INEGA). Although Galicia has a climate with less intense solar radiation than southern Spain, it still offers enormous potential for energy efficiency. INEGA regularly launches support programmes for self consumption, biomass and battery storage, aimed at private individuals, local authorities and businesses. These grants are complemented by deductions in the regional portion of personal income tax for energy renovation work and favourable municipal regulations that provide IBI reductions in the main Galician municipalities.
Solar panel installation grants in Navarre
Solar panel installation grants in Navarre are managed under the Government of Navarre and its Energy Transition Service. The Chartered Community has traditionally maintained a very active range of incentives focused on the ecological transition. In addition to tax deductions against property tax liabilities and regional personal income tax for investments in renewable energy, local councils in Navarre apply exemptions and flexible reductions in both IBI and ICIO, helping to make the payback period for solar panels one of the shortest in Spain.
Solar panel grants in Murcia
Solar panel grants in Murcia are managed through the region’s Directorate General for Energy and Industrial and Mining Activity. Given its high annual solar radiation, the region periodically promotes direct grants for the installation of renewable heating and electricity systems in homes and businesses. These regional funding programmes are strongly supported by local initiatives. Municipalities such as Murcia, Cartagena and Lorca have tax regulations that reward self consumption with IBI reductions of up to 50% for several years and substantial ICIO reductions, making the region a particularly attractive location for profitable residential photovoltaic installations.
Are solar panel grants taxable on your income tax return?
Yes. This is one of the aspects that causes the most confusion when applying for direct grants. Unlike tax deductions, which simply reduce the amount of personal income tax payable, regional or municipal grants paid as a lump sum are considered capital gains and must therefore be included in the income tax return for the tax year in which they are received.
How it affects you: The amount received is added to the general taxable income base, so its final tax impact will depend on the personal income tax bracket applicable to the taxpayer.
Exceptions: Tax deductions, both national and regional, are not declared as income because they act directly as a reduction in the taxes payable, making it easier to recover the investment without subsequent tax charges.
From a tax perspective, personal income tax is a national tax that has been partially devolved to the autonomous communities, so the general rule of declaring direct grants as capital gains is the same throughout Spain. The real differences between autonomous communities are not in how the grant itself is taxed, but in the specific deductions each region applies to its portion of personal income tax and their compatibility with national regulations.
Step by step: How to apply for grants and regional requirements
Applying for financial support for solar panels requires following a strict process to avoid losing your entitlement to a grant or tax deduction. Although the general procedures are similar throughout most of Spain, each autonomous community introduces its own administrative requirements that you need to consider.
1. The general application process
Initial planning: Before installing a single panel on your roof, make sure you check which direct grant programmes are officially open in your autonomous community. If the funding programme is closed, you will need to focus your savings on the personal income tax deduction and municipal tax reductions.
- Installation by an authorised installation company: Most regional authorities require the installation to be carried out and legally registered by an authorised installation company that provides the corresponding Electrical Installation Certificate (CIE) and the low voltage installation or modification documentation for the self consumption register.
- Submitting the application online: Once the work has been completed and you have an itemised invoice and proof of bank payment, you must access the electronic office of the relevant autonomous community or energy agency to complete the grant application or tax deduction certificate request online. This requires a digital certificate or Cl@ve identification.
2. Specific requirements by autonomous community
In communities with straightforward application procedures, such as Andalusia or Murcia: Direct grants are awarded strictly in the order in which applications are submitted until the available budget is exhausted. This means you should have all the necessary documentation ready before the official application period opens.
In communities with their own regional tax deductions, such as the Valencian Community or the Balearic Islands: You do not apply for an upfront cash grant. Instead, you obtain a digital certificate through the relevant regional agency, such as IVACE in Valencia, so that the deduction can be applied directly to your income tax return for that year. You must check whether the autonomous community allows this deduction to be combined with the national personal income tax deduction.
At municipal level, common to all regions: Applications for IBI and ICIO reductions are not processed through the regional department of industry, but directly through your local council, either through its finance department or electronic office. Therefore, the deadlines, often linked to the building permit application or completion of the work, depend exclusively on the tax regulations of each local council.
How to find out which grants are currently available in your region
The main problem with financial support for solar panel installations is not that it has disappeared, but that the application calendar is irregular. A regional funding programme may open in January, exhaust its budget in March and not reopen until the following year. Meanwhile, municipal tax reductions tend to remain stable from one year to the next because they are established through local tax regulations. That is why, before requesting a quotation for an installation, it is worth checking three specific sources: the Official Gazette of your autonomous community, where regional energy agency funding programmes are published; the electronic office of that same agency, which usually maintains an updated list of open and closed programmes; and your local council’s tax regulations, available on its website, where current IBI and ICIO reductions are listed.
In practice, an installer with experience in your area will usually already know which funding programmes are available and which combinations of grants are compatible with one another. This avoids wasting time applying separately for programmes that ultimately prove incompatible. Whenever you decide to proceed, it is worth starting there before finalising your installation quotation, as the additional savings can make a real difference to the payback period of your solar panels.
Final overview: Maximise your solar panel grants with a smart strategy
Understanding the current landscape of solar panel grants means moving away from the idea of the former large direct payment programmes and adopting a combined strategy instead. Although the general European funding programmes have ended, real savings today are based on three complementary pillars: the national personal income tax deduction, specific funding programmes in each autonomous community, with their own regional deductions or tax incompatibilities, and the stable municipal IBI and ICIO tax reductions.
Whether you live in a region with regularly changing regional incentives or in an area where local support plays a much greater role, the success of your investment depends on following a strict process: checking the available funding programmes in official gazettes before starting work, using authorised installers to handle online applications and remembering that direct grants are taxed as capital gains on your income tax return. Planning each of these steps and coordinating compatible financial support will ensure that you reduce the payback period of your photovoltaic installation as much as possible from day one.
