Selling solar power to the grid: the tax-free limit

Up to €400 a year from selling home-generated electricity to the grid is free of income tax, USC and PRSI to 2028. Budget 2027 raises the limit to €600.

Say you have solar panels or a small wind turbine at home and sell surplus electricity to the grid. Your supplier pays you, usually as a credit on your bill. That payment is income, but most households pay no tax on it because of a specific exemption.

The exemption

Profits of up to €400 a year from microgeneration are exempt from income tax, USC and PRSI for the years 2024 to 2028. It was €200 in 2022 and 2023. Budget 2027 raises the limit to €600; the change takes effect when Finance (No. 2) Bill 2026 is enacted.

To qualify:

• you are an individual, not a company
• the electricity comes from a renewable source, such as solar or wind
• it is generated at your sole or main residence, including its grounds, mainly for your own use
• the exempt profit is from electricity supplied to the national grid

You don't have to own the home.

Working out the profit

The profit is what you are paid for exported electricity, less running costs incurred wholly and exclusively in generating it. The cost of buying and installing the panels can't be deducted, and no capital allowances (writing the cost off over several years) are available.

Do you need to declare it?

Exempt profits don't need to go on a tax return, and having them doesn't mean you have to file one. If your profit is above the limit, only the excess is declared and taxed in the usual way. That is on Form 12 if you are an employee, or Form 11 if you are self-assessed.

Check your electricity bills for the year's export credits; that is usually the figure to start from. Revenue's guidance on the exemption is in Tax and Duty Manual Part 07-01-44.

Work it out

• Tax on side income →

Sources

• Department of Finance: Budget 2027: Tax Policy Changes (checked 25/10/2026)

General information, not tax advice. HeyPenny is not a tax agent.