Key Takeaways
- 1Andalucia gets over 320 days of sun per year.
- 2ROI for a standard system is now typically 4-5 years.
- 3You can sell surplus energy back to the grid (Compensación).
Quick Verdict
Yes, solar is absolutely worth it in 2025. With electricity prices at €0.20-€0.30/kWh and ROI periods dropping to 4-5 years, a solar installation on the Costa del Sol is one of the safest financial investments you can make. You can expect a 15-20% annual return on investment.
With electricity prices stabilizing but still high, and new EU grants available, 2025 might be the tipping point for solar adoption on the Costa del Sol. If you have a roof in Andalucia, you are sitting on a goldmine of potential energy.
The Numbers Don't Lie
The cost of solar panels has dropped significantly in the last decade. A typical 3kW to 5kW system for a villa costs between €5,000 and €8,000 installed.
With current energy prices, most households save €1,000-€1,500 per year on their bills. This means the system pays for itself in just 4-5 years. After that, you are essentially generating free electricity for the remaining 20+ year lifespan of the panels.
Selling Back to the Grid
Spain's "Compensación de Excedentes" (Surplus Compensation) allows you to sell the excess energy you produce during the day back to your energy provider. While they won't pay you cash, they will deduct this value from your bill, often reducing it to near zero (you still pay the fixed access charges).
For even greater independence, consider adding a battery system. While this increases the upfront cost, it allows you to use your solar power at night, further insulating you from price hikes.
Grants and Tax Breaks
There are still incentives available in 2025:
- IBI Reduction: Many town halls (like Marbella and Estepona) offer a reduction in IBI tax (up to 50% for 3 years) for homes with solar panels.
- ICIO Reduction: A reduction in the construction tax for the installation works.
- NextGen Funds: EU subsidies are still available but are often oversubscribed. It's best to check with your installer.
Ready to switch to solar? today.
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.
