Question: We recently installed solar panels on the roof of our home. My house is completely separate from our family farm, located a few miles down the road. Between the fine weather and the fact that I am away working the land for most of the day, the house is exporting a massive amount of electricity back to the grid per my app. I requested my electricity supplier to send me a few cheques as it’s a lot compared to what we use, and it looks like it could add up to a handy few hundred euros over the year. Am I taxed on this, and do I have to declare it?

Answer: This is an excellent question that affects a growing number of families who have solar panels and are not on a solar Targeted Agriculture Modernisation Scheme (TAMS).

The short answer is this income is technically taxable in Ireland. However, there is a specific tax break introduced limited to €400 by the Government to reward households for feeding green power back into the national grid.

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Rules of the €400 exemption

The way this works is that Revenue provides an automatic tax exemption on the first €400 of profit you make from selling electricity back to the grid. The downside is you cannot deduct the capital cost of buying or installing the panels against this income, your ‘profit’ is effectively just the total amount of Clean Export Guarantee (CEG) credits that show up on your utility bills over the calendar year.

  • The good part of this first €400 of export income is that it is completely exempt from Income Tax, the Universal Social Charge (USC), and PRSI. It reaches your utility account entirely untouched.
  • The exemption is per person, tied to the individual/s named on the electricity bill. This is a major benefit for household budgets. If both you and your spouse are named on the home utility account, you can each claim the €400 exemption, effectively doubling your household’s tax-free limit to €800 per year.

    Some suppliers have limits to the number of names and there can be issues with settling income on minor children.

  • The exemption only applies to a ‘qualifying residence’, meaning your sole or main family home. Because your house is a separate domestic property away from the main farm holding, it qualifies perfectly. Any solar arrays installed on your commercial farm sheds or out-farms on a business meter cannot use this specific household relief.

    • There is a specific tax break introduced limited to €400 by the Government to reward households for feeding green power back into the national grid. \iStock

    ‘Cliff edge’ versus ‘excess’ rule

    A common worry with household tax breaks is that if you go even one euro over the limit, the whole relief is wiped out.

    Fortunately, this exemption does not have a ‘cliff edge’. If your domestic solar panels are highly efficient and you end up earning €500 in export credits over the year, you do not lose the tax break. The first €400 remains completely free from tax, USC, and PRSI. You are only subject to tax on the excess amount – in this case, the remaining €100.

    That excess is taxed at your standard marginal rate (20% or 40%), plus the normal USC and PRSI cuts.

    Must I declare it on Form 11?

    For a standard PAYE worker, Revenue explicitly states there is no requirement to declare microgeneration income if the total stays at or below the €400 limit.

    However, because you operate a farm business, you are already registered for self-assessment and filing an annual Form 11 return by 31 October.

    The practical side of this is very straightforward:

  • If you stay under the limit (€400 per year for a single bill, €800 for a joint bill), you do not need to record these credits in your farm business books or include them on your annual Form 11 tax return. Because the house is on its own separate domestic meter away from the farm, the income sits completely outside your business affairs.
  • If you exceed the limit, you are legally required to declare the excess amount over the threshold. It must be entered on your annual Form 11 under Case IV (miscellaneous income), where it will be taxed normally.

    • Marty Murphy is head of tax at ifac.

    The verdict

    The current €400 exemption has been extended in the tax code to run until at least 31 December 2028. For a typical household with a standard domestic solar setup, annual export credits usually land somewhere between €150 and €350, meaning most families stay comfortably inside the tax-free bracket.

    Keep your residential electricity statements safe in a folder so you can verify the exact export total received each year.

    Marty Murphy is head of tax at ifac, the professional services firm for farming, food and agribusiness.