Helios Capital'You need at least €200,000 in equity' — this rule of thumb circulates in the market; it is a rough simplification and it is wrong in practice. For a €300,000 direct investment in a battery storage system the equity actually required — after bank financing and IAB tax refund — typically sits in the low single-digit percent of the nominal volume. An investor in the top tax bracket with access to project-typical bank financing funds the bulk from sources that do not touch their own bank account.
This article walks through the calculation line by line — and identifies the taxable-income threshold above which the structure unfolds its full leverage.
The misleading rule of thumb
The rule of thumb runs like this: investment volume €300,000, so €200,000 or more must sit in the account. That calculation equates the nominal investment amount with the equity required — and ignores the two largest funding sources of the structure. First, the asset largely carries itself: battery storage projects are typically financed with 60–75 % bank debt, secured against the system. Second, the IAB tax refund — 23.75 % of the investment volume at a 47.5 % marginal rate — arrives before or with closing and is available for the acquisition. What actually leaves your own account is the remainder after both positions — far below the nominal amount.
Three sources fund the investment
- Bank financing (project-typical 60–75 %) — secured against the asset, long-term fixed rate.
- IAB tax refund (47.5 % × 50 % = 23.75 % of investment) — arrives before or with closing.
- Equity — the remainder.
Example: €300,000 — what's left as equity?
| Source | Share | Amount |
|---|---|---|
| Investment volume | 100 % | €300,000 |
| Bank financing (70 %) | 70 % | €210,000 |
| IAB tax refund (year 0) | 23.75 % | €71,250 |
| Effective equity | 6.25 % | €18,750 |
The debt ratio is the biggest lever in this calculation. The same investment at three market-typical ratios:
- 60 % debt: €48,750 effective equity (16.25 % of volume).
- 70 % debt: €18,750 (6.25 %).
- 75 % debt: €3,750 (1.25 %).
Deliberately not included: Sonder-AfA and regular depreciation reduce the effective outlay further in the following years — in the example the Sonder-AfA alone adds another €28,500 in tax effect. They still do not appear in the year-0 calculation because they only become cash-effective from the acquisition year onwards. The table therefore shows the conservative case: what actually has to leave your own account on the day of closing.
Why the top tax rate is the lever
The IAB is not a subsidy but a profit reduction: 50 % of the planned acquisition cost — €150,000 in the example — is deducted from taxable income. The cash effect is therefore simple: €150,000 × marginal tax rate. At 42 % that is €63,000, at 45 % already €67,500, at 47.5 % (the 45 % top rate including solidarity surcharge) €71,250. Between the lower and the upper end lie €8,250 — for an identical investment, identical project, identical risk. That is exactly why the structure is aimed at top-bracket incomes: every percentage point of marginal rate adds €1,500 to the refund.
From which income threshold it works
The structure becomes worthwhile from a taxable annual income of roughly €120,000–150,000: at that level your income sits reliably in the top tax bracket, so the IAB's profit reduction works at a consistently high marginal rate. The full 47.5 % leverage unfolds from the Reichensteuer threshold of around €278,000 in taxable income. Repeatability matters too: anyone earning income of this order year after year can form a new IAB annually — how that builds an investment portfolio over several years is shown in Using the investment deduction every year: building a portfolio over multiple years.
What we show in the first conversation
This calculation is not a standard sheet but individual: we produce an equity calculation for every investor based on real taxable income, the target investment size and the project's actual financing — including an open breakdown of all costs, as described in Transparent costs: which fees a direct investment involves — and which ones are hidden. The calculator on the homepage gives a first impression; the tax mechanics behind it are explained in the foundational article IAB under §7g EStG: example calculation for battery storage. In a non-binding first call we walk through your numbers together.