Do You Pay Tax on Solar Panel Income in Ireland?

For almost every Irish home with solar panels, the answer is no — you pay no tax on the money you get for exporting electricity to the grid. Revenue exempts the first €400 of microgeneration profit per person, per year, from Income Tax, USC and PRSI. That exemption runs to the end of 2028. Only the part of your export income above €400 in a calendar year is taxable, and on a typical home system you would have to be on one of the highest export rates before you ever crossed that line.

The €400 Microgeneration Tax Exemption

When you fit solar panels and export your surplus to the grid, your supplier pays you for it under the Clean Export Guarantee. That payment is income, and in principle income is taxable. But under section 216D of the Taxes Consolidation Act 1997, Revenue exempts a set amount of microgeneration profit each year.

For the tax years 2024 to 2028, that exemption is €400 per year. It was €200 in 2022 and 2023, raised to €400 by Finance (No. 2) Act 2023, and then extended for a further three years — out to the end of 2028 — by Finance Act 2025. The exemption covers Income Tax, the Universal Social Charge (USC) and PRSI, so the first €400 of export profit reaches you completely untouched.

Who Qualifies

The exemption is for individuals generating electricity at their own home. Revenue's conditions are specific:

• The electricity is generated from a renewable or alternative source — solar panels qualify.
• It's generated at your sole or main residence (including the grounds), for your own consumption, with the surplus exported.
• You must be named on the electricity bill for the property. You don't have to own the home — a rented main residence counts.

One detail that catches people out in a good way: where more than one person is named on the bill, each named person can claim the full €400 — the exemption isn't split between them. A couple jointly named on the account effectively has an €800 combined tax-free allowance for the household's export income.

One important limit: the exemption is not available to companies or corporate entities. It's a personal exemption for individuals at their home. (You may see other sites say the €400 covers “farms and businesses” too — that conflates the income-tax exemption with the wider Microgeneration Support Scheme. Revenue's rule for this €400 tax break is individuals at their main residence.)

When You Actually Owe Tax

You only owe tax if your microgeneration profit for the year goes over €400 — and then only on the excess. The first €400 stays exempt; the part above it is added to your income and taxed at your marginal rate (20% or 40%), plus USC and PRSI in the normal way.

Here's Revenue's own worked example:

Will a Normal Home Ever Go Over €400?

For most households, no. A typical 4 kWp system exports in the region of 1,400 kWh a year. What that's worth depends entirely on your supplier's export rate:

Even on the best standard rate, a typical home system stays comfortably under €400. You'd generally only cross the line with a larger array, an unusually high export fraction, or a premium first-year tariff — and even then it's only the slice above €400 that's taxed. The tax has never been the thing that makes or breaks the case for solar in Ireland.

How to Declare the Excess (If You Have Any)

If your export profit stays at or under €400, there's nothing to do — you don't need to declare exempt profit, and it doesn't force you to file a return if you wouldn't otherwise have to.

If you go over €400, the excess is declared as income for that year:

• PAYE taxpayers declare the excess on a Form 12 (via Revenue's myAccount).
• Self-assessed taxpayers include it on their Form 11.

The profit is assessed under Schedule D Case IV for an ordinary domestic generator. Keep your annual supplier statements showing the Clean Export Guarantee credits — that's your record of the income.

Frequently Asked Questions