Department of Finance officials have warned that attempts to tax homeowners generating solar electricity could lead to people thinking it was “not worth the trouble”.
A submission to Minister for Finance Paschal Donohoe pointed out that the cost of collecting the tax would also have been disproportionate to what Revenue would actually net from householders. It also recommended that householders, who will be able to sell excess electricity back to the national grid from September, should be given a €200 tax break or “disregard”.
Officials also argued there would be a “signalling” benefit from a tax relief scheme on microgeneration. This they said would demonstrate the commitment of Government to meet its renewable and wider climate obligations. Another point raised was that any tax break should only apply to bill-paying occupants of principal private residences and should not apply to trading income.
The officials recommended a three-year “sunset period”, so that it could be reviewed in 2024 to see if it was effective.
Minister for the Environment Eamon Ryan has said it could be expected that people would start installing more solar power in the future. In support of the tax disregard he said, “The average kW [kilowatt] installed in the next 10 years can be expected to be nearer to 4kW, with electric vehicles that would be expected to charge at home, absorbing a lot of kWs,”
LSL News.