Is development in energy technology eligible?

Yes, if the behaviour of a plant or component was open before the first test run. This holds for solar, wind, hydrogen, storage and grid control alike — 25 % of the assessment basis, 35 % for SMEs; for contract research commissioned after 27 March 2024, 17.5 % or 24.5 % of the fee before the additional flat rate.

Energy & Cleantech R&D Tax Credit 2026

In the energy sector the scope of the project decides, not the output of the plant.

The certification office does not assess how large a storage system or electrolyser is, but whether a technical question was open beforehand and answered systematically. A plant builder rarely loses an application on the technology; usually it is lost because the construction and operation of a series plant sit in the same project as the development of the concept behind it.

Rates, costs and limits

The essentials on the research allowance in energy technology

Funding rate: 25% of the assessment basis, 35% for SMEs. For projects started after 31 December 2025, a 20% flat rate increases the assessment basis (Section 3 (3b) FZulG); the EUR 12 million cap still applies (Section 3 (5) FZulG).
Eligible: Novel cell and stack concepts, storage chemistry, power electronics, grid control algorithms and pilot plants. Building and operating a plant to a fixed concept is not R&D; developing a new plant concept is. What matters is novelty, technical risk and systematic approach.
What counts: The employer gross salary of development, simulation and test engineers for the hours spent on the project. Since 2024 also the depreciation of movable assets used exclusively for the project, such as a test rig. Material for the prototype or the pilot plant itself is not eligible.
Ceiling: Assessment base of EUR 12 million per financial year, maximum research allowance EUR 4.2 million.
Contract research: 70% of the cost of commissioned development work is eligible (Section 3 (4) FZulG): Fraunhofer institutes, testing laboratories, university institutes, external simulation providers.
Stacking & retroactive: Applications for closed financial years from 2022 are possible — for 2020 and 2021 the four-year assessment period has expired (§ 12 FZulG in conjunction with § 169 AO). Combining with BMWK programmes, KfW funding or EU funds is permitted, as long as the same costs are not funded twice.

Which activities in energy technology are eligible?

The industry does not decide eligibility. The certification office checks every project against three criteria: novelty, technical risk, systematic approach. If one fails, the application fails. Below are the activities we encounter most often at energy and cleantech companies, with the verdict we expect.

Boundary case: eligibility depends on the specific project.

Cells, stacks & storage chemistry

New bipolar plate geometry with integrated cooling channel and new coating for a PEM electrolyserEligible
Eligible. Novelty: No stack concept available on the market achieves the required degradation rate at the intended current density. Technical risk: Whether degradation stays below 2% per 1,000 operating hours at 3 A/cm² is not known before the long-term trial and coating test. Systematic approach: Design, coating trials, test rig, cell sensors, measurement series across several revisions, documented by test rig protocols.
New electrode formulation or catalyst coating with an open efficiency targetEligible
Eligible. Efficiency, service life and material cost are in conflict and measurable. That makes the technical risk quantifiable, one of the strongest starting positions an application can have in this sector.
Scaling a proven cell to a larger active areaBorderline
Borderline. Routine as long as current distribution and thermal balance scale linearly. It becomes eligible when hotspots or uneven current density demonstrably occur at the new size and a new cooling or distribution concept has to be developed.
Cell manufacturing under a licensed process without own adaptationNot eligible
Not eligible. Recipe, equipment and test criteria are prescribed by the licensor. The result is known before production starts; the company bears no technical risk of its own.

Power electronics, control & grid integration

Own control strategy for grid stabilisation under highly volatile feed-in powerEligible
Eligible. Anyone who designs a controller because standard controllers cannot achieve frequency or voltage stability at the required feed-in profiles must explain why. That names the state of the art. Keep the rejected controller structures and their measurements; that is the decisive evidence later.
State estimation or sensor fusion for a battery management system under new load profilesEligible
Eligible. Whether the state of charge and ageing of a cell can be reliably estimated at all with the available signals is open beforehand. Measurement series showing estimation quality over iterations are systematic approach and technical risk in one.
Retrofitting an existing plant with a new control system or inverter technologyBorderline
Borderline. Eligible if the interaction between the legacy plant and new control is unresolved and worked out in testing. Routine if manufacturer documentation and a parameterisation guide prescribe the way.
Parameterising standard inverter firmware to the manualNot eligible
Not eligible. Intended use of the device platform. Only when the platform demonstrably cannot map the requirement and a separate method is developed alongside it does an open technical question exist.

Materials & coatings

New membrane or coating for an aggressive medium with open service lifeEligible
Eligible. Whether a new membrane achieves the required ion transport while maintaining sufficient chemical resistance over the target operating life cannot be determined in advance. The trial series across material variants and operating conditions is your evidence of systematic approach.
Process optimisation on an existing coating or manufacturing lineBorderline
Borderline. Eligible as soon as a target value is required that the known process demonstrably fails to reach, and the cause is unclear beforehand. Without that measurement the certification office reads only a demanding requirement, and demanding is not a criterion of the FZulG.
Variant design for operating conditions outside the previous approval rangeBorderline
Borderline. Eligible is the part for which no validated design exists and which is resolved in testing. Not eligible is adapting known variants within the approval framework, even if it takes weeks.
Material or supplier change with run-in to an approval protocolNot eligible
Not eligible. Even elaborate run-in remains commissioning. The way is documented, the result predictable.

Prototype, pilot plant & commissioning

Pilot plant at MW scale to validate a new storage or electrolysis concept, with measurement plan and abort criteriaEligible
Eligible. The clearest case in this group. Whoever defines in advance what is measured and when the trial counts as failed has already documented systematic approach and technical risk before the certification office asks.
First commissioning of a pilot plant at the real siteBorderline
Borderline. Eligible is the share in which behaviour not previously mastered is worked out on the real grid or process, documented by change states and measurements. Acceptance to the approval decision is delivery.
Building and operating a series plant to an approved, fixed plant conceptNot eligible
Not eligible. The technical concept is decided; what follows is construction and operation. Necessary and often capital-intensive work, but no gain of knowledge in the sense of the FZulG.

Digitalisation & grid operation

Physics-based load forecasting or grid state model with own modellingEligible
Eligible. Whether a model predicts grid state or load with sufficient accuracy is open beforehand. Comparing model and measurement over several iterations is the evidence.
Connecting legacy plants with unclear signal and data quality to an energy management systemBorderline
Borderline. Eligible if it is documented that the available signals do not support the required statement and own methods for conditioning had to be developed. Pure wiring, protocol mapping and dashboards are integration.
Introducing a standard control system or EMS to manufacturer specificationNot eligible
Not eligible. Even demanding integration work remains integration. The tools are built for exactly this purpose, the way is documented, the result predictable.

What is regularly rejected

Building, operating and maintaining a plant to an approved plant conceptNot eligible
Not eligible. The most common reason for rejection in this sector. Construction and operation execute a fixed concept; they are not research. Eligible is exclusively the upstream development of the new concept.
Approval procedures, CE conformity, technical documentationNot eligible
Not eligible. Mandatory work in the course of plant approval whose result is settled. The test protocols created along the way can, however, serve as evidence for an eligible project.
Series ramp-up, acceptance, training, maintenance contractsNot eligible
Not eligible. Necessary and often laborious work, but no gain of knowledge in the sense of the FZulG. You hand over a result that is technically settled.
Maintenance and spare parts procurement for existing plantsNot eligible
Not eligible. The result is fixed beforehand: the same functional scope, restored. Occasionally submitted by advisers along with everything else, and then it drags the whole project into scrutiny.

Your project is not listed or sits between two lines? That is the normal case; eligibility is decided on the specific facts, not on the heading. Describe the project to us and we will tell you where it stands.

What evidence does the BSFZ expect in energy technology?

Energy and cleantech companies practically never introduce an additional system for the research allowance; they have the evidence already. We evaluate what exists and assign each source to the criterion it supports.

What evidence does the BSFZ expect in energy technology?
Source	What it proves	Criterion
Test rig and trial protocols	Aborted runs and measurement series date what was tried when and what it was measured against. A failed run is no blemish; it is proof of an open outcome.	Systematic approach · Technical risk
Cell measurement data · stack and battery cycling	Charge, discharge and ageing curves across cycles and temperatures show whether a target value was achievable or only became achievable through iteration.	Systematic approach · Technical risk
Simulation reports · thermal, flow and grid simulation	Calculation reports with boundary conditions, convergence studies and comparison against measurement show that the target value was not trivially achievable.	Technical risk
Grid connection measurements · feed-in and load profiles	Measurements before and after a control change document the difference between parameterisation to the manual and working out previously unknown grid behaviour.	Scope
Operating data from pilot plants	Operating hours, incidents and re-tuning of a pilot plant document the path from idea to a robust concept, clearly separated from later regular operation.	Systematic approach
Change requests · design decisions	Change histories name the rejected solutions, exactly the information with which the state of the art can be demonstrated.	Novelty
Time recording · project hours	For the tax office application the hour counts. We map an existing time recording onto the projects instead of introducing a parallel system.	Cost side
Standard tests · certification reports	Tests to IEC and DIN EN standards document the experimental character when they reflect iterations up to passing, not just the final approval test.	Systematic approach

The most common mistake in assisted applications is a development process constructed after the fact with phases that never existed at your company. Your real test rig protocols and operating data are the better evidence; they provide a complete, dated record of the procedure.

What comes out of it?

Two calculated cases for projects that started after 31 December 2025, once at the SME rate of 35%, once at the standard rate of 25%.

Storage start-up, 40 employees · SME

Employer gross, 10 development and test engineers: EUR 800,000. Ten development and test engineers, R&D share documented via project hours, plus a testing contract placed with a Fraunhofer institute

R&D personnel costs (employer gross)EUR 400,000

Contract research, 70 % of EUR 50,000+ EUR 35,000

Overhead flat rate 20 %+ EUR 87,000

Eligible expensesEUR 522,000

Funding rate35 %

Research allowance per yearEUR 182,700

Per year. Applied for retroactively over three open financial years: around EUR 0.45 million, without the overhead allowance, because the project started before 2026.

Grid operator, 500 employees

Employer gross, 25 developers: EUR 2,250,000. Twenty-five developers working on grid control algorithms and storage integration, not an SME. Standard rate 25%, contract research with a university institute

R&D personnel costs (employer gross)EUR 1,237,500

Contract research, 70 % of EUR 150,000+ EUR 105,000

Overhead flat rate 20 %+ EUR 268,500

Eligible expensesEUR 1,611,000

Funding rate25 %

Research allowance per yearEUR 402,750

Per year. The assessment base is capped at EUR 12 million, a maximum of EUR 3.0 million allowance at the standard rate, EUR 4.2 million as an SME.

As a rule of thumb: a development engineer with an employer gross of EUR 80,000 who spends half of the time on eligible projects yields around EUR 16,800 research allowance per year (SME rate, with the overhead allowance — the project starts after 31 December 2025). The whole is capped at an assessment base of EUR 12 million and an allowance of EUR 4.2 million per year. Go to the calculator

Guide: R&D tax credit for energy and cleantech companies
The eligibility rules separating development from plant operation, the sources of evidence and a template for the project description, as a PDF.

What energy and cleantech companies ask us most often

Can the FZulG be combined with other energy funding programmes?+

Yes, in principle a combination with BMWK programmes, KfW funding or EU funds is possible. However, the rule applies that the same costs must not be funded twice: if a cost block is already subsidised through another programme, it drops out for the research allowance. NOVARIS evaluates the exact split before the application is filed.

Are pilot plants and demonstrators eligible for funding?+

Yes, provided the pilot plant serves experimental development and does not already constitute commercial series production. A pilot project to validate a new storage or electrolysis concept at MW scale can be fully eligible; what matters is the technical objective of gaining new knowledge, not the later regular operation.

Does the FZulG apply to hydrogen and Power-to-X projects?+

Yes. Hydrogen electrolysis, methanation, synthetic fuels and fuel cell systems are, to the extent technical risk exists, typically eligible R&D activities. Here too what matters is whether the cell or plant behaviour was open before the start.

Where is the line between plant operation and developing a new plant concept?+

Building and operating a plant to a fixed, approved concept is not an eligible project, regardless of investment volume or technical complexity. Eligible is the upstream development: if a new cell, storage or control concept had an open technical outcome before the first test run, exactly that development share is separable and claimable.

Are material costs for building a pilot plant eligible?+

No, direct material expenditure for prototypes and pilot plants is not provided for as its own cost category under the FZulG. Eligible are the personnel costs of the engineers involved, 70% of commissioned contract research under Section 3 (4) FZulG, and since 2024 the depreciation of movable assets used exclusively in the project, such as a test rig.

Can grid operators and municipal utilities use the research allowance?+

Yes, provided they themselves perform development work, for example on grid control algorithms, load forecasting models or the integration of decentralised generators. Pure operation of the existing grid using established procedures is not eligible; developing new control or forecasting methods for it is.

How far back can energy companies apply?+

Applications for closed financial years from 2022 are possible; the assessment period of the respective year is decisive. For many energy companies a substantial amount lies precisely in these earlier years, because several technology generations sit there unclaimed. Retroactive application

How much effort arises in our energy development department?+

For a typical energy sector project we reckon with two to four hours on the part of the head of development: a technical conversation in which we take up the project, and one approval round on the finished project description. We take over the evaluation of test rig protocols, operating data and time recording as well as both applications.

How does your documentation become an application?

Your test rig and your test field already document everything the certification office wants to see, just in a different language. Here is the same set of facts in four registers, from the test rig protocol to the application sentence.

In the test field — What gets written anyway

PEM electrolyser EL-220, series 1
Degradation 8.1% / 1,000 h at 3 A/cm²
  // target < 2%, hotspots at the bipolar plate

- cell sensors ........ 24 pcs
- cooling channel .... model v2
- series 3 ........... 1.7% / 1,000 h ok

In conversation — What the team says about it

"After a few hundred hours at full current density we get hotspots at the bipolar plate, the cells age unevenly. We put cooling channels in, that already helped a lot, but only with our own coating and cell control were we durably under two percent."

Technically complete and worthless as application text. There is no reference to the state of the art or to the measured variable.

At the BSFZ — What is actually examined

Novelty
Technical risk
Systematic approach

For each of the three criteria the application must contain a verifiable statement. What is described is not the finished electrolyser but the knowledge gained on the way there.

In the application — What we formulate from it

"For PEM electrolysers at the required current density of 3 A/cm² no stack concept existed whose degradation had been demonstrated below the target of 2% per 1,000 operating hours. Whether the local heating at the bipolar plate could be compensated far enough through integrated cooling channels and a new coating could not be determined in advance. The project established this in three measurement series against a defined target."

This is the work. The same facts, four formulations, and only one of them is an application. This translation is our actual service: building, from what your test rig produces anyway, the statement the certification office can examine. Not writing more beautifully. Writing differently.

Why do applications fail in energy technology?

Rejected projects from the energy sector rarely fail on their technology. They fail on five recurring patterns, and we see them in self-submitted applications just as in externally assisted ones.

The state of the art is missing

The application describes what was built, not why it could not be done with available cell, storage or control concepts. Without named competitor solutions or standard values the certification office cannot establish novelty. This is the most common reason in our own mandates.

How we do it. We specifically name the concepts, materials and processes that were examined and rejected, each with the technical property on which they fail.

Plant operation is submitted as the project

Building and operating a plant to a fixed concept is not R&D, even if the plant is new and capital-intensive. An application covering "the pilot plant" as a whole forces the certification office to assess development and execution together.

How we do it. We scope the project to the development of the plant concept and cleanly separate approval, construction and regular operation.

Project risk instead of technical risk

Financing, approval timelines and supply chain are not technical risks. Anyone arguing this way describes a management or market problem and gets it decided as such.

How we do it. We phrase the risk as an open technical question: which property of the cell, the converter or the control was not predictable before the start.

The prototype or pilot plant is described as a product

The application reads like a data sheet: efficiency, capacity, output. The certification office is looking for the way there, the trials that did not work and the measurement that proves the difference.

How we do it. We derive the systematic approach from your own artefacts: layout in the calculation report, trial in the test rig protocol, decision in the change request.

Cost side and facts do not match

The BSFZ certifies the project, the tax office checks the costs. Anyone who claims material costs for the pilot plant, or hours that contradict the project description, loses in the second step, after the certificate has already been issued.

How we do it. We run project description, time recording and research allowance application (ELSTER) against the same scope from the start. The cost side is not created afterwards.

If you already have a rejection, the first step is analysing the decision: which of the five points carries it. That determines whether objection or new application is the right way.

Which other industries use the research allowance?

The sector never decides eligibility — Section 2 FZulG does. These pages show the same three criteria against the activities of each field.

Mechanical engineering — Design, testing, commissioning
Automotive — Drivetrain, battery, driving function
Medical technology — Operating principle, SaMD, pre-approval
Pharma & life sciences — Compound, formulation, bioprocess
Construction — Methods, materials, component tests
Aerospace — Structure, propulsion, avionics
Agriculture & FoodTech — Process, formulation, field trial
Software & IT — Algorithm, model, architecture

Send us a measurement protocol, not a questionnaire

In the first consultation we talk about your cell, your storage system or your control loop, not about your legal form. After thirty minutes you know which part of your development is eligible, in what order of magnitude, and whether a retroactive application is worthwhile. The first consultation is free; 30 % of the fee falls due with the BSFZ decision, 70 % only after the allowance has been paid out.

Book a first consultation

Official sources

Read on

Max Nodes

Founder and Managing Director of NOVARIS Consulting. Specialised in the German R&D tax credit (FZulG) since 2021; 25 of 25 accompanied BSFZ applications approved (as of 09/2026). Max Nodes

R&D tax credit for energy and cleantech: cell, storage, grid control

Energy: stabilize feed-in