Dáil Éireann Debate, Thursday - 18 June 2026
253. Deputy John Connolly asked the Tánaiste and Minister for Finance whether the residential solar tax credit is available in respect of solar PV installations in new-build dwellings (details supplied); and if he will make a statement on the matter. [46449/26]
View answerI wish to clarify to the Deputy that there is no tax credit available in respect of solar PV installations for new-build or second-hand dwellings.
There is however a tax exemption for micro-generation of electricity. Micro-generation of electricity 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 to the grid.
Section 216D of the Taxes Consolidation Act 1997 provides that profits of up to €400 per year arising to an individual from the generation of electricity from renewable, sustainable or alternative sources of energy at the individual’s sole or main residence for the individual’s own consumption (referred to as the micro-generation of electricity) is exempt from Income Tax, USC and PRSI.
The exempt amount was increased from €200 to €400 per year in Finance (No.2) Act 2023. The profits which are exempted are those profits arising from the domestic generation of electricity which is supplied to the national grid. The tax exemption was due to expire on 31 December 2025. Finance Bill 2025 extended the exemption from Income Tax, USC and PRSI for householders for certain profits of up to €400 per annum from the microgeneration of electricity, for a further three years, to 31 December 2028.
In addition, as the Deputy is aware following amendments to Annex III of the VAT Directive, agreed in April 2022, the Government introduced a zero rate for the supply and installation of solar panels on private dwellings. This was subsequently extended to the supply and installation of solar panels on schools.
The only other area where Annex III applies some latitude in relation to reduced rates for home energy upgrades is in relation to heat pumps. Whilst a zero rate of VAT cannot be applied there is scope to reduce the VAT rate on highly efficient low emissions heating systems to a reduced VAT rate. In Ireland the reduced VAT rate of 9% was introduced with effect from 1 January 2025 on the supply and installation of heat pumps systems.
