Here, too, a distinction must be made between installations on the ground and installations on buildings:
In Germany, for plants on the ground applies that the income from electricity generation is generally subject to income tax. However, there is now an exception for systems up to 10 kWp: The Federal Ministry of Finance created a simplification rule for small photovoltaic systems in its letter dated October 29, 2021 (GZ IV C 6 - S 2240/19/10006 :006, DOK 2021/11171604). According to this, the tax office assumes without further examination that there is a hobby business that is irrelevant for income tax purposes if the operator declares in writing that he wishes to make use of the simplification rule and meets the requirements for this. The declaration is also effective for subsequent years. If you make use of the simplification rule, the otherwise possibly required, time-consuming forecast calculation is no longer necessary and you no longer have to prepare a profit determination - even for already existing installations. See in more detailMicrosoft Word - Merkblatt - Anpassung Einheit (bayern.de) .
As a result of the Annual Tax Act, investments related to the building are largely exempt from income tax. In detail, the following applies according to Section 3 No. 72 of the German Income Tax Act (EStG):
"Tax-exempt income and withdrawals related to the operation of
(a) photovoltaic systems installed on, at or in single-family dwellings (including outbuildings) or non-residential buildings with a gross installed capacity of up to 30 kW (peak) according to the market master data register; and
b) of photovoltaic systems existing on, at or in other buildings with an installed gross capacity according to the market master data register of up to 15 kW (peak) per residential or commercial unit,
a total of no more than 100 kW (peak) per taxpayer or co-entrepreneur. If income is generated pursuant to section 2(1), first sentence, number 2, and if the total income generated from this activity is tax-exempt pursuant to sentence 1, no profit shall be determined."
In practice, this means that almost all smaller solar plants are tax-exempt and no profit has to be determined; in contrast to open land, there is no right to choose here.