Tax exemptions for electricity microgeneration are among the climate-related tax measures announced by Minister for Finance Michael McGrath as part of Budget 2024.

“I am… doubling the tax disregard in respect of personal income received by households who sell residual electricity from microgeneration back to the national grid,” Minister McGrath said in his budget statement to the Dáil today (Tuesday, October 10).

Minister McGrath said that from January 1, 2024, an income disregard of up to €400/year will apply to profits or gains arising to a qualifying person from the microgeneration of electricity.

“This will provide relief from income tax, USC (Universal Social Charge) and PRSI (Pay Related Social Insurance),” he said.

Electricity microgeneration

Electricity microgeneration is the small-scale production of electricity by consumers who generate electricity at their own homes for their own consumption and sell the excess electricity produced.

In Budget 2024, for electricity microgeneration, there will be an increase from €200 to €400 in the exemption from income tax, USC and PRSI for certain profits arising to a qualifying individual who generates energy from renewable, sustainable or alternative energy sources for their own consumption.

The exempted profits from these taxes are those arising from the domestic generation of electricity which is supplied to the national grid.

Farms and households are all eligible for support through schemes that have already installed solar panels on 70,000 buildings across the country, according to the minister.

Climate-related tax measures

McGrath said that the government would demonstrate its commitment to climate action with the establishment of the Infrastructure, Climate and Nature Fund.

“€14 billion will be put aside in the Infrastructure, Climate and Nature Fund by 2030 to allow for sustained levels of investment in infrastructure in the event of economic downturns and to support climate and nature related projects,” he said.

“I am extending the accelerated capital allowances scheme for energy efficient equipment for a further two years,” Minister McGrath added.