How to record the income from solar power generation

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If you have installed solar panels on your property primarily for personal use, FiT payments are generally not taxed. However, if your solar panel system was installed with the primary purpose

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6 Frequently Asked Questions about “How to record the income from solar power generation”

How do solar panels earn money?

A large portion of potential solar panel earnings comes from the government's generation tariff, which is part of the Feed-In Tariff (FIT) scheme. Under the generation part of this scheme, you receive a fixed rate of income for each kWh of electricity you generate.

How can I maximise my solar panel earnings?

To maximise your solar panel earnings, it can be more efficient to try to use as much of the electricity that you generate during the day as possible – by running washing machines, tumble dryers and dishwashers during daylight hours, for example.

Are solar panels taxed?

If you have installed solar panels on your property primarily for personal use, FiT payments are generally not taxed. However, if your solar panel system was installed with the primary purpose of generating income, you may need to declare these earnings to HM Revenue & Customs.

Do I have to pay income tax if I generate electricity?

Where the generation tariff is received by an individual, other than in a business capacity, and it is not chargeable as miscellaneous income, no Income Tax liability will arise. This will usually be the case where an individual generates electricity mainly for use in their own home.

Do solar panels save money on energy bills?

Energy bill savings are a key part of any potential solar PV earnings, as they are guaranteed for the life of your system. A large portion of potential solar panel earnings comes from the government's generation tariff, which is part of the Feed-In Tariff (FIT) scheme.

How much do you get paid if you generate electricity?

Under the generation part of this scheme, you receive a fixed rate of income for each kWh of electricity you generate. The rate varies depending on the size of your system, the type of technology you use and the date of installation. Payment ranges between 7.1p/kWh for the largest systems and 16p/kWh for smaller ones.

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