The taxation of photovoltaic electricity resale is based on a power threshold that determines the entire tax treatment: total exemption or mandatory declaration in BIC. The most common confusion revolves around the cumulative conditions for this exemption, often summarized by the sole criterion of 3 kWc, while two other conditions must be met simultaneously.
Cumulative exemption conditions under 3 kWc: beyond the power threshold
The threshold of 3 kWc alone is not sufficient to benefit from the income tax exemption. Three criteria must be met at the same time.
- The photovoltaic installation has a power of 3 kWc or less.
- It is connected to the public grid at a maximum of two points.
- It is not used for the exercise of a professional activity, which excludes installations placed on a commercial premises or an operated agricultural building.
Failure to meet even one of these criteria shifts all resale income into the taxable category. For example, a 2.5 kWc installation connected at three points does not benefit from any exemption.
We observe that most guides focus on power and omit the criterion of the number of connection points, which exposes some producers to an adjustment during an inspection. To delve deeper into this point, the taxation rules on Je Comprends Enfin detail each condition with concrete examples.
Micro-BIC regime and flat-rate deduction on photovoltaic income
As soon as the exemption conditions are not met, the income from electricity sales falls under industrial and commercial profits (BIC). The micro-BIC regime applies automatically as long as the annual revenue remains below the ceiling for the category of goods sales.
The tax administration then grants a flat-rate deduction of 71% on the declared turnover. Only the remaining 29% is subject to the progressive income tax scale, to which social contributions are added.
Declaration under the micro-BIC regime in practice
The income from electricity sales is reported on the 2042 C Pro form, in the section for non-professional industrial and commercial income. The amount to be entered is the gross turnover received during the calendar year, without deducting any expenses: the 71% deduction is calculated automatically by the administration.
A technical point often overlooked: the applicable buyback rate depends on the date of the connection request, not just the date of commissioning. Two installations commissioned in the same year can therefore generate different revenues if the connection requests were submitted in different quarters. This discrepancy directly affects the taxable amount.
Option for the real regime: when it becomes relevant
The simplified real regime allows for the deduction of actual expenses (depreciation of equipment, loan interest, insurance, maintenance) instead of the flat-rate deduction. This choice is only beneficial if the expenses exceed 71% of the income, which mainly occurs during the first years of operation of a high-power installation when depreciation weighs heavily.
The option for the real regime commits the producer for a minimum duration. A return to micro-BIC is only possible at the end of this period, which requires a financial projection over several years before switching.
Business property tax and IFER: the forgotten local taxes
The resale of electricity constitutes a commercial activity in tax terms. It therefore generally generates an obligation for business property tax (CFE). However, installations with a power of 9 kWc or less benefit from a CFE exemption, which covers the vast majority of residential installations.
Beyond 9 kWc, the CFE is due in the municipality of installation. Its amount varies according to the minimum base set by the local authority, making any general estimate unreliable.
Flat-rate taxation on network companies
The IFER concerns photovoltaic installations with an installed electrical power exceeding 100 kWc. This threshold places this tax outside the scope of standard domestic installations, but it affects agricultural rooftop projects or ground-mounted plants operated by individuals through dedicated companies.
IFER is calculated per kW of installed power, and its rate is adjusted annually. It is due regardless of the volume of electricity actually sold, distinguishing it from levies based on revenue.
Self-consumption with surplus sale: actual tax impact
Self-consumption generates no taxation as long as the electricity produced is consumed on-site. Only the fraction sold back to the grid constitutes taxable income, and only if the exemption conditions described above are not met.
In practice, for a residential installation of 3 kWc or less in self-consumption with surplus sale, the annual resale revenues remain modest. The exemption fully applies, and no specific declaration is required for income tax purposes.
The distinction between total self-consumption and surplus sale also impacts VAT. We recommend checking the applicable VAT regime for the contract signed with the obligated buyer, as small power installations benefit from the VAT exemption threshold, while larger installations charge VAT on their sales and can recover the VAT paid on the initial investment.
The choice between increasing self-consumption or selling surplus depends on the contractual buyback rate and the avoided electricity price. This calculation evolves with each quarterly rate revision, making the tax strategy inseparable from the overall energy strategy of the household or operation.
