Since the adoption of the Kyoto Protocol in 1997, recognizing the impact on the climate due to the emissions of some gases, obligations and measures have been developed to mitigate the harmful effects of human activities on our biosphere. These obligations and other enviromental protection initiatives have been adopted at state level by all the countries that have signed the Protocol. These obligations have gradually been transformed into measures to promote energy saving, reduction of polluting emissions and the penetration of renewable energies in energy generation.

In order to encourage this last point, the European Union has developed several Action Plans over the last two decades and disbursed a large amount of funds to encourage institutions, companies and citizens by giving them easier access to energy from renewable sources.
In Spain, the Institute for Energy Diversification and Saving (IDAE) is the public entity in charge of distributing these funds in different programs, either directly or through other administrations.

At Grupo DAC we are always on the lookout of this type of aid because it represents a magnificent opportunity to achieve a renewable energy installation at a really low cost.

In the Canary Islands, regular aid is announced both at regional and island level. However, we must bear in mind that this aid can also be found at municipal level, either in the form of direct aid or, for example, indirectly through a reduction in the property tax.

Right now in Tenerife there are 14 municipalities with bonuses between 20% and 50% of their IBI quota (Property tax) for years, for the fact of installing solar energy systems.

On the other hand, on a fiscal level, both individuals and legal entities can declare the expenditure on investments of this type in order to obtain bonuses on income tax or corporate tax.

For example, for companies, there is a fiscal instrument which is the Reserve for Investments in the Canary Islands (RIC), which tries to stimulate business investment in the Canary Islands through its own resources, in other words, the self-financing of companies which carry out their activity in the islands. This incentive makes it possible to self-finance investment in renewable energies as these technologies contribute to the improvement and protection of the environment. In general, a maximum of 90% of the company's undistributed profits can be allocated to such investments, so that whatever is allocated to the reserve will reduce the tax base deductible for corporation tax. To take advantage of this instrument, we recommend obtaining specialized tax advice.

Documentation

• Royal Decree-Law 15/2018 of 5 October on urgent measures for energy transition and consumer protection
• Royal Decree 244/2019, of 5 April, regulating the administrative, technical and economic conditions for the self-consumption of electrical energy