Key Takeaways
- 1With electricity prices around €0.25/kWh, most Costa del Sol homes see solar payback in 3-5 years.
- 2The old 'Impuesto al Sol' (Sun Tax) was abolished in 2018 — modern systems are fully legal and incentivised.
- 3Owners in communities (LPH) can usually install panels for personal use even if some neighbours disagree.
- 42026 grants and local tax discounts can cover up to 40% of installation costs for qualifying homes.
The Quick Verdict
With 3,200 hours of sun per year, the ROI for solar in Malaga is typically 3.5—5 years. Homeowners can claim up to 40% deductions on IRPF and get 50% off IBI (Council Tax) in towns like Mijas and Fuengirola.
The Costa del Sol sits on one of the best solar resources in Europe, yet many homeowners still rely 100% on Endesa or Iberdrola for their electricity. In 2025, with high grid prices and generous tax breaks, well-designed solar systems have moved from "nice green upgrade" to aserious financial investment.
This guide walks through the real Endesa bill math, explains how the old "Sun Tax" disappeared, and shows you what ROI to expect in 2025 — including a real case study from a villa in Elviria.
The "Endesa" Problem
Current electricity rates in Malaga typically fluctuate between €0.20 and €0.30 per kWh, depending on your tariff and time of day. For a villa with air conditioning, a heated pool and regular year-round use, that quickly adds up to €3,000—€6,000+ per year.
According to official PVGIS Data, Malaga receives over 1,700 kWh/m² of solar irradiation per year. That means every square metre of well-oriented roof can generate far more energy than it consumes in a typical Spanish home.
- Potencia contratada (Power capacity): The fixed charge for the maximum power (kW) your property can draw at any time. Think of it as the size of your "pipe" to the grid. This is charged per kW per day and does not disappear completely with solar.
- Consumo (Energy use): The variable part based on how many kWh you consume each month. This is where solar has the biggest impact.
Example: Typical Endesa Bill on the Costa del Sol
- Potencia: 5.5 kW × ~€0.13/kW/day ≈ €22—€24 / month
- Consumo: 400—600 kWh at ~€0.25/kWh ≈ €100—€150 / month
- Other charges: taxes, meter rental, etc. ≈ €20—€30 / month
In other words, 60—70% of your bill is pure consumption. Solar attacks this Consumo line directly by generating free daytime electricity.
How Solar Shrinks the Consumo Line
A 5 kW system on the Costa del Sol typically produces around 7,500—8,500 kWh per year. If your home consumes 8,000—10,000 kWh annually, solar can easily cover 60—80% of that usage.
That means your Consumo line — often €120—€180 per month for a full-time villa — can drop to €20—€60. You will still pay Potencia and taxes, but the heavy variable part is dramatically reduced.
The Sun Tax Myth
Many expats still believe Spain punishes solar owners with a special tax, known as the Impuesto al Sol or "Sun Tax". This used to be partly true for certain large installations under older regulations.
Since 2018, that tax has been abolished. Royal Decree 15/2018 and subsequent regulations completely removed the Sun Tax and simplified self-consumption rules. Today:
- Residential systems under 100 kW do not pay any extra fee for self-consumption.
- You can connect your system legally with your supplier (Endesa, Iberdrola, etc.) and receive bill credits for surplus energy (compensación de excedentes).
- There is no requirement to install an expensive second meter just to be "taxed" on your own production.
Any installer still mentioning the Sun Tax for residential systems is either using outdated information or trying to scare you into making a rushed decision. The "Sun Tax" was officially abolished in 2018 by Real Decreto 244/2019, which guarantees your right to legal self-consumption and simplified compensation for surplus energy.
3. Living in a Community (LPH): Can Neighbours Block Solar?
If you own an apartment or townhouse in a Comunidad de Propietarios, the roof is usually a common elementregulated by Spain's Horizontal Property Law (Ley de Propiedad Horizontal, LPH).
The law was updated to make energy-efficiency works easier. In most cases:
- For individual self-consumption (panels that only feed your apartment), communities cannot simply block you because a few neighbours "don't like the look".
- The community must allow access to common roofs, provided the installation is safe, respects technical limits and does not seriously affect the building's structure or other owners.
- A majority vote is usually required to formalise the use of common space and the distribution of any surplus production.
Important: Every building has its own statutes and layout. Always ask your administrator and, if needed, a specialist lawyer before signing an installation contract. But in broad terms, if you are installing panels for your own use, Spanish law is now on your side.
Case Study: 4-Bed Villa in Mijas
Real Numbers from a Mijas Family Home
- Property: 4-bedroom villa used as a main residence.
- System: 5 kW inverter with battery storage.
- Net Cost (after grant): €8,000.
- Annual Saving on Bills: approximately €3,660 per year.
- Simple Payback: around 2.1 years.
After the payback point, the owners effectively generate thousands of euros of electricity every year for the remaining life of the system, with only minor maintenance costs.
2025 IBI Reductions in Malaga
Each Town Hall sets its own rules, but the following table summarises typical IBI discounts currently available for certified residential solar systems in parts of Malaga province:
| Municipality | Typical IBI Discount |
|---|---|
| Marbella | 25% discount for 5 years |
| Mijas | 50% discount for 3 years |
| Fuengirola | 50% discount for 3 years |
| Malaga City | 15% discount for 3 years |
These figures change over time and may depend on system size and administrative deadlines, so always confirm the current ordinance with your local Ayuntamiento before signing a contract.
The 3 Hidden Savings (2025 Tax Rules)
The headline saving is obvious: lower monthly bills. But in 2026 there are three additional layers of savings available to many Costa del Sol homeowners:
- NextGen / Regional Grants: You can apply for subsidies covering up to 40% of the installation costvia the Agencia Andaluza de la Energía. These programmes open in waves and are often handled directly by reputable installers.
- IRPF Deductions: Certain energy-efficiency works allow you to deduct up to €3,000 from your income tax (IRPF) over several years, provided the works are properly certified and reduce your primary energy consumption.
- Local IBI / ICIO Discounts: Many municipalities offer reduced Impuesto sobre Bienes Inmuebles (IBI) and reduced ICIO construction tax for solar projects, directly cutting your annual running costs.
When you layer these incentives on top of bill savings, it is common to see effective payback times drop below 4 years for full-time residences.
7. Do You Need a Battery? (Especially for Holiday Homes)
Batteries are no longer a niche add-on, but they are not mandatory for a good ROI. Whether you need one depends mainly on how you use the property:
- Full-time homes: A battery usually makes sense, shifting excess daytime production into the evening when AC, cooking and lighting demand is highest.
- Holiday homes: If the property is often empty, you may prefer a simple grid-tied system without batteryand rely on surplus compensation instead.
- Rental villas: Batteries can smooth out guest consumption and protect you from peak pricing.
For many occasional-use homes, it is smarter to start without a battery and add one later once you have 12 months of real production data.
8. Frequently Asked Questions (2025)
Do I need a battery for a holiday home?
Not necessarily. If your Costa del Sol property is empty for long stretches, a battery may not charge and discharge efficiently enough to justify the cost. A standard grid-tied system without storage still reduces your bills when you are there and lets you benefit from surplus compensation the rest of the year. Many owners choose to add a battery later once they see real usage patterns.
How do I claim the IBI tax reduction in Marbella?
Marbella Town Hall currently offers IBI discounts for certified solar installations, but you must apply proactively. After your system is legalised and registered, your installer or gestor should provide the documentation. You then submit the application at the Oficina de Atención al Contribuyente(tax office) or via the online Sede Electrónica, usually before 31 December for the discount to apply to the following year's bill.
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Written by
Miguel Angel
Energy Engineer at CostaTrades
Expert contributor covering home maintenance, renovation, and property management on the Costa del Sol. Helping expats navigate Spanish construction and property ownership.
