Michael McGrath (Cork South Central, Fianna Fail) | Oireachtas source

In my budget address I acknowledged the challenges we face in relation to climate. The finance Bill provides for a number of climate-related tax measures including the enhancements to the tax relief available to qualifying individuals in respect of excess electricity from domestic microgeneration that is supplied to the grid. This tax measure is intended to remove a barrier for entry for those who engage with the clean export guarantee scheme. This is a scheme which introduced an obligation on suppliers to offer the clean export guarantee tariff to new and existing microgenerators so that they will receive payment for excess renewable electricity they export to the grid, reflective of the market value. Section 28 of this Bill 2023 amends section 216D of the Taxes Consolidation Act 1997 to provide that the €200 exemption for income from the microgeneration of electricity will be increased to €400. It also extends the exemption to the 2025 year of assessment.

I should note that the exemption applies automatically. In general, microgeneration of electricity generates relatively small amounts of electricity and the payments from selling this electricity are modest. The purpose of the exemption is to ensure that the administrative burden associated with declaring and paying tax on these modest amounts does not act as a disincentive to participation in the microgeneration support scheme.For PAYE employees, where exempt income from the microgeneration of electricity is their sole source of other income aside from their salary, they will not need to complete a form 12 income tax return. Any income in excess of the €200 or €400 exemption threshold which is earned from microgenerated electricity must be declared by the individual on their annual tax return and will be subject to income tax, USC and PRSI in the normal manner. Given that exempted income is not required to be declared, data is not available on the rate of take-up. New and existing microgenerators who wish to avail of the clean export guarantee scheme will need to have a suitable ESB Networks export grid connection and a smart meter, where available. ESB Networks reports that there are currently more than 70,000 registered microgenerators, with approximately 55,500 of those with a smart meter installed. This information provides some indication on the number of potentially eligible claimants. Therefore, I do not propose to accept the recommendations put forward by the Senators.